Fifth largest drop in the stock markets opens new opportunities

When markets hit record highs they turn jittery and corrections follow. This week we saw what some count as the fifth largest drop in stock market values ever. The portfolio has not been helped by a cooling of the interest in the ever expanding range of cryptocurrencies. More than 90 major cryptocurrencies quoted lower this week. For most cryptos, we may already be seeing a slow decline, reason why I decided to cut losses on NEO, XLM and BCH and may close Ethereum and Bitcoin soon: . I will also try to open more short positions in cryptos in addition to the short position on $BTC.


Because of market volatility I have been setting tighter stop losses on profitable positions, leading frequently to positions closing with small profits, followed by re-opening similar long positions at marginally lower prices. This has helped to lock-in profits from the likes of Aareal Bank AG / ARL, Aixtronic SE / AIXA, Alibaba Ltd / BABA, Davide Campari SPR / CPR, Cellectis SA / CLLS, Hella AG / HLLE, Leoni AG / LEO, Siltronic AG / WAF, Solvay SA / SOLB, as well as minor short trades in Paypal Inc / PYPL and and Petrofac / PFC.


A trade war?

Much of the steel dumped by China is generic and low grade. Despite some job losses in western steel mills, western consumers have been benefiting from cheaper steels and aluminium going into tins for food and drink and cheaper construction steel for factories, supermarkets and bridges. In turn much American produce and crops are sold overseas at lower prices than in their home market, thereby giving Chinese farmers cheaper pork and chicken feed and consumers cheaper food. Consumers throughout the world have been benefiting from increased competition through growing international trade. There is a chance that the American administration wants to direct their trade negotiation with the Chinese towards extracting greater respect for Intellectual and an opening of their market for Foreign Direct Investment. As far as the EU as the world’s largest consumer market is concerned it has much leeway in trade talks, I don’t expect the USA to start a trade war with the EU and our portfolio reflects that.


US stocks tend to have stretched price to earnings ratios. Our portfolio contains more EU shares than most on eToro. I expect the value our portfolio of shares in excellent and promising businesses to grow over the coming days and weeks, as pressure on the US administration increases to calm markets.


The market correction is probably worrying for the copy trader. However, if you share my optimism in the recovery of stocks like Santander SA / SAN, ThyssenKrupp AG / TKA, Unilever plc / ULVR, Inditex SA / ITX et al, then now is an optimal moment to copy my trades on eToro:

New DAX Stocks on eToro

eToro has  finally added a few more CFD options in the German stock market.

The British foreign secretary Boris Johnson, who read Classics and is married to a barrister, once claimed that German chancellor Angela Merkel, who holds a Ph.D. in quantum chemistry  and is married to a full professor in that subject, to be ‘jealous of British tech‘. On a similar occasion Johnson contrasted the British economy to Germany’s as excelling “not in the old industries in which, of course, Germany still excels. Not in metal bashing …”.  So if you believe ultra Brexiteer Boris Johnson, you don’t need to read on. But if you consider him a serial liar anyway, as some people have suggested, you might want to find out more about German tech stocks less well known than Daimler, Volkswagen or Siemens.

Among the new German CFD options on eToro, I find the following interesting:

Aareal Bank AG, Aixtron AG, Dialog Semiconductor, Drillisch, Evonik Industries AG, Evotec,  Gea Group AG, Gerresheimer, Hella GmbH & Co KGaA and Kion AG.

I have opened a long CFD in the international real estate bank Aareal Bank AG (ARL / DE0005408116) headquartered in Wiesbaden (near Frankfurt) at €39.18 and I a position in “metalorganic chemical vapour deposition (MOCVD) equipment” maker Aixtron AG (AIXA / DE000A0WMPJ6) at €16.30.

Hella has the complex German structure of a GmbH & Co KGaA, keeping the company under family control. It is among the top 50 global automotive suppliers, employing around 33,700 people at more than 125 locations in over 35 countries, with more than 7000 engineers and technicians working in research and development. Hella (HLE, DE000A13SX22) is a welcome addition to eToro – I opened at €54.60. Most analysts see $HLE.DE stock rising to above €60.

I am observing the smallish, German-British fabless Dialog Semiconductor plc (DLG), which could become subject of a take-over. I have no orders yet on telecommunication and internet service provider Drillisch (DE0005545503 / DRI) – also known for it’s brand 1&1;  specialist chemical maker Evonik Industries AG (EVK / DE000EVNK013);  the very speculative pharmaceutical research company and CRISPR-Cas9 licensee Evotec AG (EVT / DE0005664809) of Hamburg;  engineering company Gea Group AG (G1A / DE0006602006);  specialist glass maker Gerresheimer (GXI / DE000A0LD6E6) or leading forklift and supply-chain solutions business Kion Group AG (KGX / DE000KGX8881).

If you invest in German stocks may be influenced on where you think Germany stands in its economic cycle and if how big you think the downside risks to German car making are. For the medium term I think German industry will keep growing, despite the current hiccups emanating from the Trump-administration in the USA…