$4billion fine to Six banks in currency probe

Each day $5 trillion is traded in the global currency market. London has a huge part in it. Forex rate touches various part of economy: outsourcing cost, export price, price of imported goods, company earnings and many investments held by pension funds and others.


HSBC (HSBC),  RBS (RBS), Citibank (C), JPMorgan Chase (JPM) and UBS (UBS) will collectively pay $1.4 billion to the U.S. Commodity Futures Trading Commission and about £1.1 billion ($1.75 billion) to the U.K.'s Financial Conduct Authority. UBS will also make a payment in Switzerland.
In total it's $4.33 billion in fines to global regulators to resolve allegations that these six banks attempted to manipulate foreign exchange rates. The British regulator is imposing such huge fines for the first time. It is still investigating possible manipulations at Barclays (BCS). British regulators said 36 banks that operate in the foreign exchange market, including the five fined Wednesday, will be required to participate in a program to change banking culture and ensure management take more responsibility.

According to the U.S. Office of the Comptroller of the Currency said Bank of America (BAC), Citibank and JPMorgan Chase will pay a combined penalties. It's been said that it's $950 million in penalties.

CFTC's director of enforcement, Aitan Goelman said,"The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world."

Between 2008 and 2013, traders shared confidential information and worked with their counterparts at other institutions in an effort to fix rates and increase profits. Traders were working for the profit of banks rather than their client. Regulators said they used private online chatrooms to execute deal to shift currency prices in their favor. These traders called themselves "the players", "the 3 musketeers" and the "the A-team." They try to manipulate the so-called 4 p.m. fix, a 60-second snapshot of afternoon trading in London that forms the basis of a widely-used benchmark.

The banks and traders behaved unacceptably and it could go further o investigation. The banks and individual employees might also face criminal charges in both the U.K. and U.S. over attempts to manipulate the rates. The Federal Reserve is also anticipated to be investigating banks' conduct in the currency market.

UBS was also penalized by Swiss regulators. It will pay a total of $800 million. Citibank will pay the second largest total fine at $668 million.

The CFTC said it has fined more than $3.34 billion relating to the manipulation of global benchmarks since June 2012.

Berkshire's earnings takes hit, but Buffett is still surpassing the expectation

Buffett’s personal wealth notched up by about $55 million

Berkshire Hathaway (BRKA) had a huge hit on earnings during the third quarter. Even then the earnings were better than anticipated. The investment company took a massive $678 million charge for its investment in Tesco (TESO). Tesco admitted to overstating its profit forecasts.

Berkshire A shares hit a new 52-week high. It crossed the $200,000 mark for this first time this summer and finished regular trading Friday at $214,970 a share. Later it hit $215,925 in intra day trading. On the other hand, Berkshire’s B shares finished the day up slightly at $143.61 and raised few cents higher after the bell. They are worth 1/1500th of their pricier counterparts and they were flat in after-hours trading.


The portfolio of Berkshire is still ahead for the year. It earned $4.6 billion, or $2,811 per Class A share during the third quarter. There was expectation operating earnings of $2,593.85 per Class A share.It's down by 8.6% from the same period last year, that's better than Wall Street 's expectation. Operating profit rose to $4.72 billion, or $2,876 per class A share, from $3.66 billion, or $2,228 a class A share. Revenue rose to $51.2 billion from $46.5 billion. Profits for the first nine months of the year are more better than that of 2013. Next quarter is not expected to go well. Berkshire lost big money late last month on shares of Coca-Cola (KO) and IBM (IBM, Tech30). These companies delivered disappointing earnings.The investment firm took a $1 billion hit on Coke (KO), which fizzled 6% after the company reported earnings that didn't live up to expectations of investors. Worsening the situation, Coke said it doesn't expect a much better 2015.

Berkshire Hathaway's one of the largest investment is Coke. It holds 400 million shares and his son Howard sits on the beverage company's board.

IBM (IBM, Tech30), another top holding, caused Warren Buffett a loss of $1.3 billion as the stock plunged. The company is looking for a revitalization after reporting disappointing earnings and shedding its chip unit at a major loss.  Buffett's company, Berkshire Hathaway holds over 70 million shares.

Today's Range	142.87  -  143.99		EPS Due Date	3/3/2015 Est
52-Week Range	108.12  -  143.99		EPS % Chg (Last Qtr)	29%
Price % Chg. YTD	21.13%		3 Year EPS Growth Rate	14%
Price % Chg. Last 4 Weeks	4.76%		EPS Est % Chg (Current Yr)	7%
50-Day Avg. Volume	3,784,400		Annual ROE	7.39%
Shares Outstanding	1181.9 Mil		Sales % Chg (Last Qtr)	10%
Float	1170.0 Mil		3-Year Sales Growth Rate	12%
IPO Date	N/A		Debt %	33%
Investment Bank	Salomon Smith Barney		Market Cap	$354.22 Bil
% Mgmt Owns	0.4%		Profit Margin	12.1%
PE Ratio	22		Sector	Misc
Dividend Yield	NONE		Industry Group Rank	77
Alpha	0.03		Industry Group	Diversified Operations
Beta	0.92

U.S. stocks fall as Fed ends 6-year effort to stimulate economy, Facebook down by 6.1%

The unemployment rate is now 5.9%, its lowest mark since QE began. There are over 8.5 million more people employed now than in November 2008, according to the Bureau of Labor Statistics

Federal Reserve confirmed that it will end it's asset-purchase program due to stable growth path of U.S. economy. It caused stocks decline in U.S.  The decision provides a strong base on how much the economy has improved since the recession. This decision ignited a down rate in U.S. stock market.

Facebook dropped 6.1 percent to $75.86, the most since March. 

Facebook Inc. predicted the slowest revenue growth since the first quarter of 2013 and it lost 6.1 percent after that prediction. Facebook dropped 6.1 percent to $75.86, the most since March. The owner of the largest social-media website projected fourth-quarter sales that missed the highest of analyst estimates. Facebook also said spending would increase 50 percent to 70 percent next year as the company hires more and invests in newer products.

The Standard & Poor’s 500 Index (SPX) slipped 0.1 percent to 1,982.30 at 4 p.m. in New York, trimming an earlier slide of 0.8 percent. The Dow Jones Industrial Average lost 31.44 points, or about 0.2 percent, to 16,974.31. About 7.3 million shares traded hands on U.S. exchanges.

"It's in response to the Fed acknowledging the improvement in the economy, the improvement in the labor market and the diminished risks on the inflation side of things," says Greenhaus. Dan Greenhaus is a chief strategist at market research firm BTIG in New York.

S&P 500 down 7.4 percent from an all-time high of 2,011.36 in mid-September through Oct. 15 because of huge concerns that Europe will be going into recession just as Fed bond buying ends. But there is still positive part as well.

60 percent of the S&P 500 companies have surpassed revenue projections and 80% have beaten the estimated earnings.

GlaxoSmithKline's shares rose 4% after its third-quarter results slides it's way beyond expectation and announces to return an additional £4billion to shareholders by a special share scheme. GSK is one of the world's biggest drug manufacturer and now it is on rise. The UK pharmaceuticals giant published a pre-tax profit of £548m till the end of September for three months. It is way more below than £1.4 billion a year ago. Even then,the results beat analyst forecasts.

U.S. Steel (X) advanced 5.1 percent to $40.08. Company reported more than estimated earning with the help of the quadrupling of flat-rolled steel sales.earnings.

GlaxoSmithKline on rises after profits beat forecasts

The firm is expecting it's core earning to be "broadly similar to 2013".

GlaxoSmithKline's shares rose 4% after its third-quarter results slides it's way beyond expectation and announces to return an additional £4billion to shareholders by a special share scheme. GSK is one of the world's biggest drug manufacturer and now it is on rise. The UK pharmaceuticals giant published a pre-tax profit of £548m till the end of September for three months. It is way more below than £1.4 billion a year ago. Even then,the results beat analyst forecasts.

Richard Hunter from Hargreaves Lansdown,said the results can be "a turning point". Hargreaves Lansdown plc is a financial service company based in Bristol that sells funds and shares and related products via its website and through the post to retail investors in the United Kingdom.He added,"The drive towards containing costs is also in evidence, whilst the company anticipates significant savings as a result of the restructure. In the medium to long term, Glaxo is also predicting a potentially lucrative pipeline, which should underpin prospects."

GlaxoSmithKline's shares have fallen by 14% over the past three months. It has been accused of allegations of bribery in China and it is even obliged to pay a fine of nearly $500m. GSK's US business was down due to price issues on it's key asthma drug Advair. There is even impact due to high strength of pound.

Now, the manufacturer is up with cost saving strategy. GSK is targeting £1bn of annual cost savings over the next three years and it's  "refocusing" the business. It also said it would consider a possible flotation of ViiV Healthcare. It is a division focusing on treatment for HIV.

The firm is expecting it's core earning to be "broadly similar to 2013".

Andrew Witty, Chief executive of GSK said,"We have continued to make strategic choices to create value from assets held in the group and to respond to the pressures we are facing in our operating environment."

Warren Buffett loses $2 billion in two days

IBM and Coke may be losing money, but Buffett's largest position, Wells Fargo, has raised 11% this year. 

Warren Buffett has lost $2 billion this week. Mr Buffett is known for making most likely estimation about established companies rather than investing in riskier stocks. Buffett is known for focusing on the long-term performance of his investments.

Berkshire Hathaway investment house portfolio includes huge parts of  Coke and IBM, both of which have decline in profits in the past two days. The investment firm took a $1 billion hit on Coke (KO), which fizzled 6% on Tuesday after the company reported earnings that didn't live up to expectations of investors. Worsening the situation, Coke said it doesn't expect a much better 2015.

Berkshire Hathaway's one of the lasgest investment is Coke. It holds 400 million shares and his son Howard sits on the beverage company's board.

On Monday,IBM (IBM, Tech30), another top holding, caused Warren Buffett a loss of $1.3 billion as the stock plunged. The company is looking for a revitalization after reporting disappointing earnings and shedding its chip unit at a major loss. The stock dropped 7% on Monday after then news was made public and slid again on Tuesday. It is off nearly 13% so far this year, and Buffett's company, Berkshire Hathaway holds over 70 million shares.

Buffet has been actively quoted a lot this year for his misses. Berkshire Hathaway's investment on British grocery chain Tesco (TSCDY) has also been a loss, with maximum drop: nearly 47% this year.

On the other hand, there's silver lining and it's more vivid, investors are supporting the company. Berkshire stock climbed slightly on Monday and Tuesday, and is up more than 17% this year.

IBM and Coke may be losing money, but Buffett's largest position, Wells Fargo, has raised 11% this year. And eventhough the market goes down, Buffett is adding more stocks to his portfolio.He said in an interview  "the more stocks go down, the more I like to buy."

Warren Buffett-Selling 245 million Tesco shares

245 million shares of Tesco is sold by Berkshire Hathaway investment company.

245 million shares of Tesco is sold by Berkshire Hathaway investment company. Berkshire's holding is below 3% after the sale.Berkshire Hathaway firm owned a 3.7% stake in Tesco at the end of 2013, a stake worth about £1bn. Berkshire Hathaway is Warren Buffett's investment company. He is also known as the "the Sage of Omaha."

Earlier this month he told on CNBC,"I made a mistake on Tesco. That was a huge mistake by me."

The supermarket's sales are declining and in addition to that share price has fallen to an 11-year low this year.The supermarket's share price has plunged more than 50% over the last 52 weeks after falling sales and there was unrest among investors because of  accounts mis-reporting.

Similar to Berkshire Hathaway, Blackrock, also began selling down its 5% Tesco stake in September.

Mr Buffett is known for making most likely estimation about established companies rather than investing in riskier stocks.Berkshire Hathaway's portfolio consist names like Coca-Cola, IBM and American Express and it started to include Tesco in 2006 and by 2012 owned more than 5% of the business.

Tesco has seen declining sales amid increased competition. The discount retailers like Aldi and Lidl are in the in the market and Marks & Spencer and Waitrose are providing high end offerings to attract customers.

Tesco says  Financial Conduct Authority (FCA) has been notified it that it is under investigation following its admission last week that it overstated its half-year profit guidance by £250m.
The supermarket giant will co-operate fully with the FCA and other relevant authorities.

CSX-Union Pacific stock trading, which one will outperform other?

CSX has risen 16 percent since March 23,2011

New investors are attracted to CSX as CSX’s coal shipments show signs of stabilizing.The number of coal carloads CSX transports was up 3 percent for the week ended Oct. 4 from same period a year ago after years of contraction.

Since March 23, 2011,CSX has risen 16 percent, compared to Union Pacific’s 119 percent gain. Even though the  stock-price ratio is close to the lowest since 1981, it’s up 0.8 percentage points this month, the biggest increase in a month. The point is whether investors will start putting more capital into this trade now that it’s at a multidecade low.

“Fewer coal-related headwinds have been the overarching driver”said Ben Hartford, an analyst with Robert W. Baird & Co. in Milwaukee.

Based on Jacksonville, Florida,CSX is generating 24 percent of total 2013 revenue transporting coal and is more dependent on this commodity while Nebraska-based Union Pacific generates 19 percent.
CSX stock lagged behind Union Pacific because of declining the price of natural gas which made it cheaper alternative for utilities.

Union Pacific hauls primarily Powder River Basin type coal, which is cheaper than CSX’s Appalachian variety, so it's volumes declined less.

 CSX stock could “narrow the gap” with Union Pacific as coal becomes a “less significant headwind” for CSX, Hartford said.

Jim Stellakis, founder and director of research at Technical Alpha Inc. in Greenwich, Connecticut, said that the pair-trade ratio could “move sideways” for a few months before there’s a clear sign that a possible downtrend in place since 2011 has broken. If ratio goes up overcoming a recent high in January 2014 -- “that’s a good sign there’s a switch under way, as investors are starting to see more value in CSX relative to Union Pacific.”

Investors like Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC in New York, does not follow the bet because his company currently hols Union Pacific. CSX has been plagued by congestion on its East Coast rail network, Ghriskey said. The company increased hiring and capital spending to alleviate this. Also that it relies more on the export market for coal, specifically China, where demand has been weak.
Still, the performance gap between these two stocks could reverse, as it has in the past, said Hartford, who maintains a neutral recommendation on Union Pacific and an outperform on CSX.

Driven largely by it's higher margin, CSX outpaced Union Pacific, between 2002 and 2008.
CSX is scheduled to report third-quarter results Oct. 14, followed by Union Pacific on Oct. 23. The implied one-day stock-price move after the announcement is about 3.5 percent for CSX.
Ghriskey said “pair trade is certainly something to watch,” even for investors with a position in only one of these stocks,

BP's share highly under performing due to Western sanctions on Russia

Sanctions against Russia is viewed as an obstacle for BP to keep it's business at normal pace. BP just posted a rise in second quarter profits. BP has around a 20% stake in Russian energy giant Rosneft and the sanctions against Russia due the Ukraine crisis can affect BP in future. BP said, "Sanctions could adversely impact our business."

BP is worried about the impact of sanctions and relationship with Rosneft. The crisis may affect the level of income, production and reserves as well as BP's investment and reputation. The company's second quarter profits is $3.2bn (£1.9bn), up from $2.4bn in the same period last year. For the second quarter, BP said higher oil production in higher-margin areas such as the Gulf of Mexico had boosted its profits. But for third quarter, the production is not expected to be high as second quarter due to the seasonal maintenance in Alaska and the Gulf of Mexico as well as the planned major turnaround.

BP has around a 20% stake in Russian energy giant Rosneft and the sanctions against Russia due the Ukraine crisis can affect BP in future.

If the sanctions become more intense, there could be prohibition of exports of technologies used in the Russian Oil sector.

BP's share price is affected along with political conflicts as BP is more exposed to political situations in Russia than any of its competitors. Analysts are seeing BP's share hugely under-performing. BP's share price had risen by 2% since early June, while Royal Dutch Shell, Exxon Mobil and Chevron had each increased by more than 9%.

On Tuesday, BP shares were up during early trading, but later fell 1.6% to 489p because of the impact on western sanctions on Russia and it's still going down.

Five Traits of a Successful Trader

Traders make the whole market move. The make it go up or go down.

"I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms." - Paul Tudor Jones.

Success is not always luck, it could be sometimes but becoming successful in every trade a trader makes is a beautiful art and art always needs mastery. Here's a list of traits that a successful traders have. They are:

1. Emotionless:Trade and act like a doctor does in an operation room.(Handle their motions)

Emotions makes us alive. They help us to show with others how to feel and perceive certain happenings. Emotions makes the communication with people around us. In addition to that it changes how we feel. If we feel that others are worried about a particular stock we are holding and if we start to worry too, then it's certain that we might be missing something in it. The logic.

  "The markets are unforgiving, and emotional trading always results in losses." - Alexander Elder

2. Willingness To learn:

 A person who never made a mistake never tried anything new: Albert Einstein
Learn from the mistakes. This even applies to life's other aspects too. Mistakes are always good teachers. Successful traders always learn, they learn from mistakes, they learn from books, they learn from news papers. They are always updated about the market. They read, listen, talk and learn about the market before they step in and apply what they have learnt.

Being ignorant is not so much a shame, as being unwilling to learn: Benjamin Franklin

3. Discipline:
"No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation." - Robert Rhea

Discipline provides balance in any area. That could be the main reason successful people are not losing discipline no matter which field they are involved in. Trading demands discipline because being slow or being aggressive will guarantee you loses. A trader may earn large amount of money in a particular trade, but if the trader loses his/her discipline then it's certain that the trader will lose all of it. They even balance work and family life.

4.Appropriate Decision Maker:

Most of the millionaires are excellent decision maker. They know when to hold on and when to loose. They are the players in the game. They know when to procrastinate the decision so that they could gather information about the deal. If there is possible situation of loss then they decision to choose the strategy that will minimize their loss and optimize it.

Successful Traders are decisive and they are carefully decide where to focus their energy. They are aware about their state and body conditions. They decide what will happen to them. They have high locus of control.

5.Successful Trader are like other successful people, They find Mentors, ALWAYS: 

It's not that mentors come to start ups, but start ups find their mentor. When people are willing to learn they all are about to find someone who could teach them. This happens in trading too. There are successful traders out there who always have someone whom they could talk if there is any doubt. Successful traders always search for their mentors.

Candlestick Chart: Why Candlestick Chart is used in stock market?

Candlestick Chart: Information about emotions.

Munehisa Homma (Japanese) in 1700s, who traded the futures market discovered that emotions are always involved during trading in the market. There was impact of supply and demand but the trader's emotion was also an important factor to be considered.

Homma found that if he could understand the emotions of traders in the market, he could be able to predict what would happen next in future. The next thing to find was difference between buying price and value of rice he used to trade. This difference is still considered during trading in stock market. All these are based on Candlestick Chart analysis.

Even though there are various rule and indications about when you should sell your stock, Candlestick Chart gives the emotional reason to that question.
We have no bull or bear in the chart. But we have fear and greed in the chart. These information are always vital because they are the basis for trading. In the chart, greed means many people what to purchase the same stock and price goes up which is bullish market trend and if people fear about the decline in price they sell at some amount shorter than opening amount and bearish market trend is seen. So information is vital for traders whether it's regarding emotion or trend, the whole point is to find the best price to sell and purchase.

The small greed pattern normally indicated that traders are willing to purchase the stock or anything that the chart represent. Greed for stocks make them to purchase with the anticipation that stocks might go up.

In case of fear, people are careful with the profit margin. They do not want to reduce the profit margin so they now start to sell even if small red candle are seen in the cart. They all are conscious about reducing the opportunity loss as well. They do have rules or they follow someone's rule while trading stocks.

Information is main element for stocks traders.

If  bees know that people are watching their beehive and they are planning to make smoke and steal the honey they make, would they still be making honey without thinking anything else? They will sift to a secure location. Same thing happens with us. A simple information can be valuable for making a profitable trade in future. The value of information is so high that at times people even neglect the fundamentals and focus only one prevailing information. This might cause the dis-balance in the system. What ever the information is, we do not make profit on loses and we do not make money on poorly backed financial securities. The main focus always should be the information and it's validation.

Nepalese stock traders are all in the same track next to the international stock traders. Everyone is trying to make money from buying and selling. They purchase at high price and sell at low price. Sometimes all the factors that causes change in the stock price are seen and heard clearly. The vividness is bold and people know what is causing sudden spike and what's causing sudden depletion of the share price. A little and legal information can make you thousand in various cases. They are like gold mines and people are trying to utilize the information on the map to get the gold. Sometimes it helps to make profit of thousands and sometimes it puts traders in loses.

Let's say a trader is ready to be updated to the latest information about institutions he is targeting for trading stocks. What's next? Next move is the subscription of various articles, channel, newsletters,magazine and newspapers. These are the resources for finding information need for us. In Nepal we have, Arthik Abhiyan, Sharesansar, Nepal share market,mero lagani and many more. These sites provide information about various contemporary market situations. The use of these information determines whether to make profit or to stay doing nothing in the stocks market. The habit of reading financial medias is always a necessity for a trader in any scenario.

Now, a trader know about what's likely to happen. The next thing to do is to validate the information and predict the possible changes that is going to occur at certain time in future. If we know that two banks are going into merger then after merger their capital is merged and they operate as a single bank and this will increase the price of the stock of the bank. So, information is vital for stocks traders.

Being Emotional Could Be Costly

If you choose to earn your living by doing something that you don't want to do then it will start to make you feel bad for doing it. So the only thing that you need to do is to find out about things that you really want to do. If you are interested in buying and selling shares then being a stock trader can be so much interesting and fun for you. The real part that makes the game of buying and selling stocks is handling the emotions that any traders goes through during the over all process.

It's always emotion that wins in most of the decision we make. Why should you know about it?

Knowing about emotional decisions we make every day is a key factor while making money in purchase or sell of anything. It will provide us the direction of our path, whether we are making profit or we are going to lose in a particular matter. The basics is always the same, putting some logic to whatever we do; there's only one thing that's different. It's the way we think.

Normally we react according to the environmental factors we are exposed to. While so many people around us are selling the stock because they are anticipating that stock's price will go down soon, a rational mind thinks about the reasons for depletion in stock price. Some random prediction can make people feel that there are risk involved, but logical explanation always provides strong base for proper decision.

It's always important to understand that emotions are need while we survive and interact with other people and at the same time when there are situation where decision should be based on logic, it's best to avoid emotional part and think rationally.  Logic never make arbitrary decision, it makes precise and powerful decisions which will not make you poor.