Stock Trading Volume in NYSE and NASDAQ From 2001 To 2010

Posted by David Hunkar on 8 August 2012, 6:03 pm

Trading volumes in both the New York Stock Exchange (NYSE) and NASDAQ (NAS) have increased since the start of the 21st century.Some of the the reasons for the rise in trading volumes include high volatility in the markets, investor anxiety, high-frequency trading (HFT), short-term trading by hedge funds, etc.While dramatic fall in share prices in the past few years have to be taken into account when analyzing trading volumes, that is not a major factor for the rise in trading.

In 2001, there were 4,109 companies listed on the NASDAQ. By the end of the decade the figure decreased to just 2,784. On the NYSE, the number jumped from 2,798 to 3,923 during the same period. But this jump was mostly due to the takeover of Amex by NYSE which added about 600+ companies in 2009.

In 2001, about 307 billion shares were traded on the NYSE. By 2010 this number jumped to 444 billion (or) an increase of about 45%. Over at the NASDAQ, the total share trading volume was about 471 billion in 2001. This figure jumped to 552 billion in 2010 representing an increase of about 17%. In terms of the value of shares traded, the dollar amount increased from $10.4 Trillion in 2001 to $11.9 Trillion in 2010 at the NYSE. Currently the average daily volume on the NYSE and the NASDAQ are over 3.0 and 1.8 billion respectively.

The following graph shows the change in trading volume at NYSE vs. NASDAQ from 2001 to 2010:

Click to enlarge

Data Source:

New York Stock Exchange, Inc; American Stock Exchange LLC; The NASDAQ Stock Market, Inc; Securities Industry and Financial Markets Association;
via 2012 Financial Services Fact Book 2012 by Insurance Information Institute and Financial Services Roundtable.

While trading volumes have soared, the duration of stock holding stocks periods in the US has declined sharply in the past few decades.This situation does not bode well for the long-term strength of the US equity markets.

Related ETFs:

SPDR S&P 500 ETF (SPY)

PowerShares QQQ (QQQ)

Disclosure: No Positions

Update:

Source: Where Has All the Stock Trading Gone?, Bloomberg BusinessWeek

Why Invest in U.S. Coal Companies?

Posted by David Hunkar on 7 August 2012, 12:39 am

Coal remains the major source of power generation in the U.S. Just over 42% of total power generated comes from coal-powered plants.With the rise of renewal energy and the use of natural gas for power production, the demand for coal is projected to decline slightly next year.However coal will continue to be the main fuel for electricity generation for many years to come.

Outside of the U.S., some countries rely heavily on sources other than coal for their electricity needs.One reason these countries avoid coal is that burning of coal pollutes the environment. Despite the pollution issue, power producers in the U.S. prefer coal since it is very cheap and is readily available in huge quantities.Unlike China or India, the U.S. does not need to import coal from other countries.In an innovative marketing move, the coal industry has even started calling the regular, black and dirty stuff as “Clean Coal” to imply that coal is somehow “clean”.

Brazil produces produces most of its electricity from renewable sources.According to a report, an astonishing 88.8% of power produced there in 2011 came from renewable sources. Brazil is also a net exporter of electricity to neighboring countries. Among the developed countries France produces 78% of its electricity from nuclear energy. Coal contributes just 3.9% of the total French power production compared to over 42% in the U.S. Our neighbor Canada generates 60% of power from hydro power.

The chart belows shows the U.S. electricity generation by fuel type:

Click to enlarge

Source: Short-Term Energy Outlook. U.S. EIA, January 2012

Since 2004 the use of coal for power production has declined by about 8%.

Some of the top U.S. coal companies that investors can consider are Arch Coal(ACI), Alpha Natural Resources (ANR) and Peabody Energy Corporation (BTU).

Another easy way to invest in coal is via the Market Vectors Coal ETF (KOL). Currently the fund has an asset base of about $174 Million.

Disclosure: No Positions

U.S. Defense Spending Relative to GDP, Population

Posted by David Hunkar on 6 August 2012, 7:08 am

The current population of U.S. is about 314 million or about 5% of the world’s total population. The 15.0$ Trillion U.S. economy is the largest in the world and accounts for nearly one-fourth of the world’s total GDP.

Though the U.S. is separated from the rest of the world by oceans on two sides, an peaceful ally in the North and a failed state in the South, the country spends the most on military than any other country in the world including the other military superpower Russia. In 2010, the U.S. defense expenditures totaled $698 billion representing an 81% increase over the previous decade. Despite rising social and economic problems domestically, as the world’s policeman the U.S. is forced to allocate a large chunk of precious resources for the military.

Though having only 5% of the world’s population, the U.S. spent about 42% of the global military spending as shown in the following chart:

Click to enlarge

Source: CFR

From the 1999 article “A Manifesto for the Fast World” in the New York Times by Thomas L. Friedman:

“The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies to flourish is called the US Army, Air Force, Navy and Marine Corps.”

Kazakhstan is Very Rich in Mineral Resources

Posted by David Hunkar on 5 August 2012, 5:04 pm

Here is an interesting chart showing all the mineral resources present in the country of Kazakhstan:

Click to enlarge

Source: The attractiveness of the Kazakhstan Market, BNP Pribas

In a post last year I noted:

Unlike other natural resources-based economies, Kazakhstan is unique in that 99 of the 110 elements in the Periodic Table of the Elements are present in the country. Oil, gas, uranium, zinc, tungsten, barium, silver, lead, chrome, copper, fluorites, molybdenum, and gold are some of the resources that are currently being extracted from the land. In fact, the country’s vast mineral resources is estimated to be valued at over US$46.0 Trillions.

The Complete List of Kazakhstan GDRs

Disclosure: No Positions