I know I blogged about it recently but one of my mates had some success with Binary Options yesterday so I thought I'd add his feedback here so that you can make your own decisions.
He basically elected to use the Justrade.com platform and he committed 300 bucks. In two hours of trading he managed to turn it into R670 so he's pretty pleased with it. In terms of the stocks he traded he had REM, FSR and ASA
Apparently he got very lucky in the auction though with a lot of the profits coming from FSR in a last minute trade which made his main profits.
His main concern though was there were insufficient market participants and basically he scalped the market maker at the end. Hopefully this will change as the offering goes along...
... heck maybe I'll even sign up for them one of these days.
He did grumble that the contracts were dated a little too far in advance for such an illiquid market - i.e. the strikes were too far out to generate trade in them - think he said they were priced a week in advance - but a nice profit meant he wasn't moaning too much... plus I think he said the trades were something ridiculous like R1.50 a match which seems really cheap - but if it floats your boat then I guess you can take it...
Anyway that's my public service announcement for the day....
Saturday, February 28, 2009
Thursday, February 26, 2009
SW
It's Friday and I thought I would stir the pot a pit... On one of the trading boards one of the posters posted a graph of the Smith & Wesson share price since November 2008...
The share has moved from US$1.50 to US$3.66 (yesterday).
Is this a hint that people are stocking up on guns since the financial crisis started to bite?
The share has moved from US$1.50 to US$3.66 (yesterday).
Is this a hint that people are stocking up on guns since the financial crisis started to bite?
Wednesday, February 25, 2009
Shopping list
A bit of income is coming into my account again at the end of this month and I'm going to be using some of that cash to add some more shares to my portfolio.
As things stand at the moment, I'll be adding the following shares
PSG: Jannie Mouton continues to buy up these shares left, right and centre. I've previously blogged on why I think PSG remains a good buy and Mouton has been good at returning value to shareholders so I'm going to rely on his judgement here.
Capitec: As far as banking offerings going, Capitec remains one of the most exciting in the sector from a growth perspective. At a time when consumers are looking for the most cost-effective offerings around, Capitec would fit the bill and I wouldn't be surprised if they pick up customers in these tough times.
Altron Preference shares: I indicated in previous posts that I think preference shares are going to be a handy asset class in the coming months and combined with the demand for power related projects, I think it makes sense to add some of the Altron Prefs to the ordinary underlying shares in the portfolio as well.
Growthpoint: Income remains key to growing my portfolio and an investment in a blue chip property offering like Growthpoint will hopefully boost this aspect of my portfolio.
Milkworx: My cheap and nasty turnaround punt. I promised myself I would add a few more of these at 3c so I would be able to participate further in the rights issue.
Beige: Again I've blogged on this company before but my argument was that it trades at a nice discount to NAV and keep tucking a few of them away....
As things stand at the moment, I'll be adding the following shares
PSG: Jannie Mouton continues to buy up these shares left, right and centre. I've previously blogged on why I think PSG remains a good buy and Mouton has been good at returning value to shareholders so I'm going to rely on his judgement here.
Capitec: As far as banking offerings going, Capitec remains one of the most exciting in the sector from a growth perspective. At a time when consumers are looking for the most cost-effective offerings around, Capitec would fit the bill and I wouldn't be surprised if they pick up customers in these tough times.
Altron Preference shares: I indicated in previous posts that I think preference shares are going to be a handy asset class in the coming months and combined with the demand for power related projects, I think it makes sense to add some of the Altron Prefs to the ordinary underlying shares in the portfolio as well.
Growthpoint: Income remains key to growing my portfolio and an investment in a blue chip property offering like Growthpoint will hopefully boost this aspect of my portfolio.
Milkworx: My cheap and nasty turnaround punt. I promised myself I would add a few more of these at 3c so I would be able to participate further in the rights issue.
Beige: Again I've blogged on this company before but my argument was that it trades at a nice discount to NAV and keep tucking a few of them away....
Sunday, February 22, 2009
Asian Currencies
A while back we blogged on the subject of the dollar and whether Asian currencies such as the Singapore dollar were in line to become increasingly important in the global economic picture.
I picked up this story off Bloomberg:
Asia Agrees on Expanded $120 Billion Currency Pool
Japan, China, South Korea and 10 Southeast Asian nations agreed to form a $120 billion pool of foreign-exchange reserves that can be used by countries to defend their currencies amid the deepening global recession.
Read the complete article here...
The US has been so busy trying to stimulate its own local economy that it hasn't been able to defend its dollar and I'm wondering if this isn't a hint that w're one step closer to seeing the dollar replace.
I picked up this story off Bloomberg:
Asia Agrees on Expanded $120 Billion Currency Pool
Japan, China, South Korea and 10 Southeast Asian nations agreed to form a $120 billion pool of foreign-exchange reserves that can be used by countries to defend their currencies amid the deepening global recession.
Read the complete article here...
The US has been so busy trying to stimulate its own local economy that it hasn't been able to defend its dollar and I'm wondering if this isn't a hint that w're one step closer to seeing the dollar replace.
Saturday, February 21, 2009
US$1000 gold
US$1000 gold - fanbloodytastic!
Well sort of.... South Africans have always had an affinity with gold and when it starts hitting records, the gold bugs start jabbering.
Considering that the mining industry in general is down in the doldrums, a surging gold price may help to stave off some of the unemployment we could be facing in the next few months
Yesterday gold hit US$1007 an ounce before retreating to US$993 in US trade... There has also been a bit of a decoupling with the rand weakening while the gold price is going up which is contrary to recent history where the rand has strengthened when gold has gone up.
While it is great for the gold miners - As we've warned before on this blog - when gold spikes it has tended to pre-empt further equity market sell-offs... gonna be interesting to see what happens here and how the gold shares end up reacting.
Well sort of.... South Africans have always had an affinity with gold and when it starts hitting records, the gold bugs start jabbering.
Considering that the mining industry in general is down in the doldrums, a surging gold price may help to stave off some of the unemployment we could be facing in the next few months
Yesterday gold hit US$1007 an ounce before retreating to US$993 in US trade... There has also been a bit of a decoupling with the rand weakening while the gold price is going up which is contrary to recent history where the rand has strengthened when gold has gone up.
While it is great for the gold miners - As we've warned before on this blog - when gold spikes it has tended to pre-empt further equity market sell-offs... gonna be interesting to see what happens here and how the gold shares end up reacting.
Friday, February 20, 2009
It's a slaughterhouse...
Thursday and Friday were just a sea of red on the JSE... Before I get into the reasons and try and pick my way through the carnage, I thought I should post the following picture to try and put some sense of humour into the story:
I think that's the closest I could come to Mr Market giving you the middle finger if you were tempted to go long.
Friday saw our markets rocked by some shocking news from Anglo American as they announced another 9000 job cuts and declined to pay a dividend. Ferronews.com has more info. The miner was down over 15% and some serious questions are going to be asked about the amount of debt the company is carrying... Don't be surprised if this isn't the last bad news to come into the market from this company.
On the financials side, Old Mutual got caned again and between Thursday and Friday they came down over 16%. The company managed to recover a couple of percent late in the day but it was really one way traffic. I remember calling Old Mutual as a R5 company and sure enough we got down to the R5.60 level so I think I'll take that one....
Basically this is how the indexes played out on Friday:
ALL SHARE 19403 -3.28 %
TOP 40 17464 -3.41 %
INDUSTRIAL 14800 -3.31 %
FINANCIAL 4826 -5.15 %
GOLD 2906 1.59 %
The US didn't get any better and gold spent a lot of US time above the $1000 an ounce levels. Remember I'm looking at levels of around 6500 - 6800 on the Dow in the next few months before I expect selling pressure to abate.
The Dow closed 100 points down at 7365 but had been down around the 7230 level...
Warning
Rumour mongering isn't really my thing but I think that there are some investors out there who will try and take some high risk positions simply because "Things can't go any lower..."
We are in a really bad economic situation at the moment - don't take unnecessary high risk positions that you don't need to take.
Two companies in particular I'd warn to steer clear of.
IFCA - I noticed the company traded down from 10c to 1c before somebody came into the market and bought 100 shares at 1c to boost it back to a 10c share.... steer clear
Super Group - I've been hearing some very bad things about this business beyond what is in the press and I believe an asset sale is on the cards. Basically their financial wellbeing sits with a banker deciding whether or not to process a high risk loan and we know what the lending environment is like at the moment.
I think that's the closest I could come to Mr Market giving you the middle finger if you were tempted to go long.Friday saw our markets rocked by some shocking news from Anglo American as they announced another 9000 job cuts and declined to pay a dividend. Ferronews.com has more info. The miner was down over 15% and some serious questions are going to be asked about the amount of debt the company is carrying... Don't be surprised if this isn't the last bad news to come into the market from this company.
On the financials side, Old Mutual got caned again and between Thursday and Friday they came down over 16%. The company managed to recover a couple of percent late in the day but it was really one way traffic. I remember calling Old Mutual as a R5 company and sure enough we got down to the R5.60 level so I think I'll take that one....
Basically this is how the indexes played out on Friday:
ALL SHARE 19403 -3.28 %
TOP 40 17464 -3.41 %
INDUSTRIAL 14800 -3.31 %
FINANCIAL 4826 -5.15 %
GOLD 2906 1.59 %
The US didn't get any better and gold spent a lot of US time above the $1000 an ounce levels. Remember I'm looking at levels of around 6500 - 6800 on the Dow in the next few months before I expect selling pressure to abate.
The Dow closed 100 points down at 7365 but had been down around the 7230 level...
Warning
Rumour mongering isn't really my thing but I think that there are some investors out there who will try and take some high risk positions simply because "Things can't go any lower..."
We are in a really bad economic situation at the moment - don't take unnecessary high risk positions that you don't need to take.
Two companies in particular I'd warn to steer clear of.
IFCA - I noticed the company traded down from 10c to 1c before somebody came into the market and bought 100 shares at 1c to boost it back to a 10c share.... steer clear
Super Group - I've been hearing some very bad things about this business beyond what is in the press and I believe an asset sale is on the cards. Basically their financial wellbeing sits with a banker deciding whether or not to process a high risk loan and we know what the lending environment is like at the moment.
Tuesday, February 17, 2009
Business Connexion - Value play
It is not a share that appears on my shopping list but I was scanning through a couple of analyst reports recently and I've seen its name mentioned a couple of times - Business Connexion (BCX).
BCX is basically an IT services firm that is involved in systems integration. From what I can work out they do things like SAP installations, outsourcing of IT functions etc etc. They've got a number of blue chip clients like the mines, Sasol and some nice government contracts as well.
The reason that they have stood out for analysts as a potential value play is their attractiveness as an acquisition target. They are one of the few SA listed tech companies that provide a strong dividend yield and they are operating on an undemanding PE ratio of less than 10 times historical earnings.
On top of this the share is trading at a deep discount to its Net Asset Value (NAV). Currently the share is trading around R3.60... NAV when the company recently reported was around R5.20... Definately meaningful.
Obviously NAV can be something of a moving target and the assets are only worth what somebody is prepared to pay for them, but I think this bears looking at closer...
BCX is basically an IT services firm that is involved in systems integration. From what I can work out they do things like SAP installations, outsourcing of IT functions etc etc. They've got a number of blue chip clients like the mines, Sasol and some nice government contracts as well.The reason that they have stood out for analysts as a potential value play is their attractiveness as an acquisition target. They are one of the few SA listed tech companies that provide a strong dividend yield and they are operating on an undemanding PE ratio of less than 10 times historical earnings.
On top of this the share is trading at a deep discount to its Net Asset Value (NAV). Currently the share is trading around R3.60... NAV when the company recently reported was around R5.20... Definately meaningful.
Obviously NAV can be something of a moving target and the assets are only worth what somebody is prepared to pay for them, but I think this bears looking at closer...
Know thy strategy!
Gold is the name of the game at the moment. The precious metal is absolutely flying and touched US$970 an ounce yesterday. Importantly for South African gold shares the rand didn't strengthen against the US dollar as has been happening in the past.
This boosted the South African gold index in excess of 6% on Tuesday. For the rest it was something of a slaughter house:
All share - Down 2.93%
Top 40 - Down 2.97%
Industrial - Down 3.41%
Financial - Down 5.52%
Ouch!
On top of that the Dow has continued its slide downward losing another 297 points to trade at 7552. I had a target of around 6800 as my low on this index before a possible bounce.
On Bloomberg I see there is an article saying that GM and Chrysler are seeking another$21.6 Billion in aid and are planning to knock another 50000 jobs off of their workforce. That will be a huge blow to Obama and his turnaround / bailout initiatives.
Know thy strategy!
For those investors who keep looking at their portfolios and just see red: I know it sounds cliched but you have to know what your strategy is and stick to it.
If your belief is that the Dow is going to 6800 and the market doesn't offer much value then stick to that conviction and start building up funds to take advantage of the market... Don't look at the nest-egg you've built up and see some cash to blow on a car or some other luxury.
In the same way if you believe we are already in value territory and want to carry on buying quality shares yielding a nice dividend ... then stick to it!
Don't do what I did and rush off converting quality shares into hopeful punts in the hope that I would make some small trading gains. The strategy sounds good in your head, until you realise that with so much volatility in the market you start trading your way backwards on a strategy that is supposed to help you take advantage of down markets...
Best of luck.
This boosted the South African gold index in excess of 6% on Tuesday. For the rest it was something of a slaughter house:
All share - Down 2.93%
Top 40 - Down 2.97%
Industrial - Down 3.41%
Financial - Down 5.52%
Ouch!
On top of that the Dow has continued its slide downward losing another 297 points to trade at 7552. I had a target of around 6800 as my low on this index before a possible bounce.
On Bloomberg I see there is an article saying that GM and Chrysler are seeking another$21.6 Billion in aid and are planning to knock another 50000 jobs off of their workforce. That will be a huge blow to Obama and his turnaround / bailout initiatives.
Know thy strategy!
For those investors who keep looking at their portfolios and just see red: I know it sounds cliched but you have to know what your strategy is and stick to it.
If your belief is that the Dow is going to 6800 and the market doesn't offer much value then stick to that conviction and start building up funds to take advantage of the market... Don't look at the nest-egg you've built up and see some cash to blow on a car or some other luxury.
In the same way if you believe we are already in value territory and want to carry on buying quality shares yielding a nice dividend ... then stick to it!
Don't do what I did and rush off converting quality shares into hopeful punts in the hope that I would make some small trading gains. The strategy sounds good in your head, until you realise that with so much volatility in the market you start trading your way backwards on a strategy that is supposed to help you take advantage of down markets...
Best of luck.
Thursday, February 12, 2009
Oh come on!
Bugger.... The Sasol share price fugged me around today and I was eventually stopped out of my long position. Three losses in a row.
Was planning just to sit on my hands, but I noticed a massive volume go through on Beige Holdings and thought maybe something was happening there.
Noticed an article on Fin24.com saying that the company had been buying back a chunk of its shares so I used some of my scraps to pick up a few more shares in Beige.
We'll wait and see.
Was planning just to sit on my hands, but I noticed a massive volume go through on Beige Holdings and thought maybe something was happening there.
Noticed an article on Fin24.com saying that the company had been buying back a chunk of its shares so I used some of my scraps to pick up a few more shares in Beige.
We'll wait and see.
Wednesday, February 11, 2009
Intriguing
Interesting article from Bloomberg.... "The U.S. Treasury’s bank-rescue plan won’t repair the financial system or revive credit markets, Bank of America Corp. strategist Richard Bernstein said as he recommended avoiding the industry’s shares."
Check out the article here...http://www.bloomberg.com/apps/news?pid=20601087&sid=apJRc8r_9GDE&refer=home
This from a banking analyst inside the banks... He reckons the industry can only survive if banks are nationalised. How's THAT for a blunt assessment of the US banks prospects despite all these bailouts.
Check out the article here...http://www.bloomberg.com/apps/news?pid=20601087&sid=apJRc8r_9GDE&refer=home
This from a banking analyst inside the banks... He reckons the industry can only survive if banks are nationalised. How's THAT for a blunt assessment of the US banks prospects despite all these bailouts.
Gold flying!
The gold price has spiked up sharply at the start of US trade.
Currently the metal is trading at US$942 after starting earlier today at US$902.
South African equities could sorely do with a lift in the underlying prices of precious metals like Gold and Platinum. The spectre of massive job losses in these sectors is weighing heavily on South Africa and if metals prices are up this might serve as a bit of buffer to the producers....
For example Anglo Platinum earlier this week said it was planning to shed something like 10000 jobs in the next few weeks. Platinum has added US$31 to take the price to US$1067. Nowhere near levels seen in previous years but it might help.
But like I've warned before - I get nervous when we see big unexpected spikes in the gold price.... To me it serves as a precursor for more dollar weakness and structural problems in the financial market...
Time will tell
Currently the metal is trading at US$942 after starting earlier today at US$902.
South African equities could sorely do with a lift in the underlying prices of precious metals like Gold and Platinum. The spectre of massive job losses in these sectors is weighing heavily on South Africa and if metals prices are up this might serve as a bit of buffer to the producers....
For example Anglo Platinum earlier this week said it was planning to shed something like 10000 jobs in the next few weeks. Platinum has added US$31 to take the price to US$1067. Nowhere near levels seen in previous years but it might help.
But like I've warned before - I get nervous when we see big unexpected spikes in the gold price.... To me it serves as a precursor for more dollar weakness and structural problems in the financial market...
Time will tell
ABL / PSG
Seeing as my trading strategy has been booted out the window by market volatility in the last two weeks, I thought maybe it would be a chance to look at two fundamental stories which I've been looking at quite closely in the last few weeks - Abil and PSG.
Abil (ABL)
African Bank Investments Limited (Abil) has been my preferred banking sector share for the last few months.... although Standard Bank has also been catching the eye in recent weeks.
Disclosure - I'm a holder of Abil pref and ordinary shares.
African Bank released a trading update on Tuesday and it was pretty much more of the same - The banking / lending business is pumping and profitable while the Ellerines retail business is still weighing on them.
I decided to listen in on the analysts and investors conference call yesterday and walked away happy with the business.
Reading the numbers is one thing - listening to management is another thing altogether. Every time I listen to CEO Leon Kirkinis I get the impression that he's a guy in complete control of his business. He knows what he wants and he knows he has to keep his shareholders happy.
AND HE'S NOT A NUMBER CRUNCHER!
Listening to them chatting about the Ellerines business, the focus wasn't just on cutting costs but actually improving the Ellerines offering.
Some interesting comments were made about a bond book-building exercise which is due to commence on Monday and staying committed to lowering the dividend cover ratio over the next 3 years as previously guided...
I left the conference call confident that I could add more to my existing ABL positions.
PSG
Investment group PSG has been on my shopping list for a while, but some reason corporate action has bumped it up to the top of my radar screen.
This week, PSG announced it was A) Disposing of its interest in Channel Life to Sanlam for around R140m, B) It was buying the T-Sec securities business (about 10500 clients apparently) for an undisclosed sum...
Getting out of Channel Life now, shows management is prepared to rebalance the portfolio when needs be and gives PSG a few bucks in the bank for fresh acquisitions.
The T-Sec deal I reckon is sweet for them but the parties seem to be quite cagey on the transaction seeing as no figure was placed in the media and no disclosures have been made in any interviews...
Jannie Mouton has been piling into the company's shares for the last few months and he's highly regarded as being able to extract value for investors.
A business like PSG is known for its business savvy and if I remember correctly Mouton reckoned that if you had invested R1000 in PSG 10 years ago (This was at the company's last results presentation, pre the Sept / Oct crash), that investment with dividends reinvested would now be worth something like R360k which is definately better than a kick in the teeth...
I'd be a buyer at these levels...
Abil (ABL)
African Bank Investments Limited (Abil) has been my preferred banking sector share for the last few months.... although Standard Bank has also been catching the eye in recent weeks.
Disclosure - I'm a holder of Abil pref and ordinary shares.
African Bank released a trading update on Tuesday and it was pretty much more of the same - The banking / lending business is pumping and profitable while the Ellerines retail business is still weighing on them.
I decided to listen in on the analysts and investors conference call yesterday and walked away happy with the business.
Reading the numbers is one thing - listening to management is another thing altogether. Every time I listen to CEO Leon Kirkinis I get the impression that he's a guy in complete control of his business. He knows what he wants and he knows he has to keep his shareholders happy.
AND HE'S NOT A NUMBER CRUNCHER!
Listening to them chatting about the Ellerines business, the focus wasn't just on cutting costs but actually improving the Ellerines offering.
Some interesting comments were made about a bond book-building exercise which is due to commence on Monday and staying committed to lowering the dividend cover ratio over the next 3 years as previously guided...
I left the conference call confident that I could add more to my existing ABL positions.
PSG
Investment group PSG has been on my shopping list for a while, but some reason corporate action has bumped it up to the top of my radar screen.
This week, PSG announced it was A) Disposing of its interest in Channel Life to Sanlam for around R140m, B) It was buying the T-Sec securities business (about 10500 clients apparently) for an undisclosed sum...
Getting out of Channel Life now, shows management is prepared to rebalance the portfolio when needs be and gives PSG a few bucks in the bank for fresh acquisitions.
The T-Sec deal I reckon is sweet for them but the parties seem to be quite cagey on the transaction seeing as no figure was placed in the media and no disclosures have been made in any interviews...
Jannie Mouton has been piling into the company's shares for the last few months and he's highly regarded as being able to extract value for investors.
A business like PSG is known for its business savvy and if I remember correctly Mouton reckoned that if you had invested R1000 in PSG 10 years ago (This was at the company's last results presentation, pre the Sept / Oct crash), that investment with dividends reinvested would now be worth something like R360k which is definately better than a kick in the teeth...
I'd be a buyer at these levels...
Unfrigginbelievable!
So NOW the bloody fundamentals come into play and the US drops like a friggin rock...?! I'm rapidly losing my sense of humour here...
I haven't quite been stopped out of my Sasol long position but certainly not enjoying the lack of trend in the market at the moment... Maybe that's a problem I need to look at more closely... Volatility is screwing up positions but the underlying question should be: WHAT THE $@CK IS THE TREND?!
Basically the US dropped when they realised they didn't feel all that confident that the bank bailout plan was going to be able to stave off problems in the US banking market. This set panic across global markets initially as all the tentative confidence in the markets evaporated.
SA markets have a bit of a "shock-absorber" as the Rand weakened a bit and after the initial Blitzkrieg on our markets. Stocks seemed to have bounced off their low now that Europe is in our markets.
A bit of a dog show on the markets at the moment as we try and shrug off what has happened in the US...
But anyway I digress.
My thoughts this morning turned to pair trading i.e. taking long and short positions simultaneously as a way of dealing with the intra-day / intra-week volatility we're experiencing at the moment. It is not a strategy I've previously employed but I guess it holds some appeal for me with such big movements.
My initial thoughts were to look at Long Sasol / Short All Share or Long All Share / Short SAP for example. Bounced it off the guys on the Page 88 forum and apparently clients at Cortex have had some success with the Platinum counters in recent months - Long AMS / Short IMP.
Other recommendations were:
(MTN / Telkom)
(Anglo American / Billiton)
(Gold Fields / Harmony)
I guess the trick would be to find weightings for these positions and taken an active role managing them... Obviously there is also a higher level of investment required for these kind of transactions.
And THAT my friends will be my Plan Of Action for the next few days...
I haven't quite been stopped out of my Sasol long position but certainly not enjoying the lack of trend in the market at the moment... Maybe that's a problem I need to look at more closely... Volatility is screwing up positions but the underlying question should be: WHAT THE $@CK IS THE TREND?!
Basically the US dropped when they realised they didn't feel all that confident that the bank bailout plan was going to be able to stave off problems in the US banking market. This set panic across global markets initially as all the tentative confidence in the markets evaporated.
SA markets have a bit of a "shock-absorber" as the Rand weakened a bit and after the initial Blitzkrieg on our markets. Stocks seemed to have bounced off their low now that Europe is in our markets.
A bit of a dog show on the markets at the moment as we try and shrug off what has happened in the US...
But anyway I digress.
My thoughts this morning turned to pair trading i.e. taking long and short positions simultaneously as a way of dealing with the intra-day / intra-week volatility we're experiencing at the moment. It is not a strategy I've previously employed but I guess it holds some appeal for me with such big movements.
My initial thoughts were to look at Long Sasol / Short All Share or Long All Share / Short SAP for example. Bounced it off the guys on the Page 88 forum and apparently clients at Cortex have had some success with the Platinum counters in recent months - Long AMS / Short IMP.
Other recommendations were:
(MTN / Telkom)
(Anglo American / Billiton)
(Gold Fields / Harmony)
I guess the trick would be to find weightings for these positions and taken an active role managing them... Obviously there is also a higher level of investment required for these kind of transactions.
And THAT my friends will be my Plan Of Action for the next few days...
Tuesday, February 10, 2009
Snigger...
1. The US has made a new weapon that destroys people but keeps the building standing.
It`s called the stock market.
2. Do you have any idea how cheap stocks are? Wall Street is now being called Wal Mart Street
3. The difference between a pigeon and a London investment banker?
The pigeon can still make a deposit on a BMW.
4. What`s the difference between a guy who lost everything in Las Vegas and an investment banker? A tie!
5. The problem with investment bank balance sheet is that on the left side nothing¢s right and on the right side nothing`s left.
6. I want to warn people from Nigeria who might be watching our show, if you get any e-mails from Washington asking for money, it`s a scam. Don`t fall for it.
7. Bush was asked about the credit crunch. He said it was his favourite candy bar.
8. The rescue bill was about 450 pages. President Bush`s copy is even thicker.
They had to include pictures.
9. President Bush`s response was to meet some small business owners in San Antonio last week. The small business owners are General Motors, General Electric and Century 21.
10. What worries me most about the credit crunch, is that if one of my cheques is returned stamped `insufficient funds`; I won`t know whether that refers to mine or the bank`s
It`s called the stock market.
2. Do you have any idea how cheap stocks are? Wall Street is now being called Wal Mart Street
3. The difference between a pigeon and a London investment banker?
The pigeon can still make a deposit on a BMW.
4. What`s the difference between a guy who lost everything in Las Vegas and an investment banker? A tie!
5. The problem with investment bank balance sheet is that on the left side nothing¢s right and on the right side nothing`s left.
6. I want to warn people from Nigeria who might be watching our show, if you get any e-mails from Washington asking for money, it`s a scam. Don`t fall for it.
7. Bush was asked about the credit crunch. He said it was his favourite candy bar.
8. The rescue bill was about 450 pages. President Bush`s copy is even thicker.
They had to include pictures.
9. President Bush`s response was to meet some small business owners in San Antonio last week. The small business owners are General Motors, General Electric and Century 21.
10. What worries me most about the credit crunch, is that if one of my cheques is returned stamped `insufficient funds`; I won`t know whether that refers to mine or the bank`s
Monday, February 9, 2009
Sigh....
Two losing trades in a row now on Sasol, one long and one short and we're back to the point where I initially entered my original long position.
After breaking R285 in early trade on Monday, I was stopped out of my position and followed Sasol up in a new long position. The share closed R297 which is pretty healthy spike on the day.
Big upward price movements on Friday and Monday would seem to indicate something is potting at Sasol. Doesn't agree with my shorter term view that there is more downside risk but that's the way the market is going at the moment.
After breaking R285 in early trade on Monday, I was stopped out of my position and followed Sasol up in a new long position. The share closed R297 which is pretty healthy spike on the day.
Big upward price movements on Friday and Monday would seem to indicate something is potting at Sasol. Doesn't agree with my shorter term view that there is more downside risk but that's the way the market is going at the moment.
Saturday, February 7, 2009
My job losses theory
in a picture. As you can see this has gone a helluva lot deeper than in previous similar events.
Friday, February 6, 2009
Huh?!
Geez - what a dog show... When a headline on Bloomberg reads "Stocks in U.S. Climb on Speculation Job Losses to Spur Action on Stimulus" you realise how screwed up the world really is....
Yeah yeah I'm grumbling because my Sasol short has been blown out the water with Sasol moving up sharply today on top of up moves on Wednesday and Thursday.
The world seems to have shrug off the fact that the US has dropped another 560000 jobs in the last month, other major and that companies across the world are planning layoffs...
Some of the other headlines On Bloomberg read:
Consumer Credit in U.S. Declines More Than Expected on Bank Lending Limits
GM Said to Ready Salaried Job Cuts as It Presses UAW for More Concessions
Platinum, Palladium Climb as Investors Turn to Precious Metals in Slowdown
Yip we're all hunky dory... Honestly I don't get it but as they say Mr Market always knows best and he's moving the market up at the moment... at a rate of knots in the US...
So basically we're saying that every time things look bad, we should just buy like crazy on the premise that bad debt issues will simply be addressed by throwing more money at the problem? Surely the world has gone crazy?!
One would presume that with the oil price not going anywhere and the Rand falling to R9.58 to the US dollar - even after our rate cut yesterday - then signs would be there that things wouldn't be looking that great for Sasol... But who knows.
I'm still bearish on the global economy and stock markets in general, but one thing that a couple of traders have picked up on is the movement in the Baltic Dry Index (BDI)... After being slaughtered somewhere in the magnitutde of 97% in 2008, the index picked up a bit in the last few days. Shipping firm Grindrod has responded very nicely locally, as have US counterparts...
The question is - does this movement in the BDI indicate we've hit something of a bottom and traders can start looking at resource shares again? Conventional logic would seem to say that's what the fund managers have done in the last few days to set our resource sector alight.
Is it false hope and going to simply inflate the PE multiples of the resource shares? My humble opinion - yes indeedy...
Again just look at the facts - the car industry in SA has now gone to government to get a bailout. We're shedding a bucket load of jobs, lending is freezing up here locally, car dealerships are going out of business etc. etc.
Dividend wise - Mutual & Federal announced today it wouldn't be declaring a final dividend in light of the turmoil in the markets. If I had to guess, I don't think they'll be the last to do this and when dividends go so does a lot of the investment appeal...
I guess the important thing is not to fight what's happening in the market, but rather have a clear investment strategy.
Yeah yeah I'm grumbling because my Sasol short has been blown out the water with Sasol moving up sharply today on top of up moves on Wednesday and Thursday.
The world seems to have shrug off the fact that the US has dropped another 560000 jobs in the last month, other major and that companies across the world are planning layoffs...
Some of the other headlines On Bloomberg read:
Consumer Credit in U.S. Declines More Than Expected on Bank Lending Limits
GM Said to Ready Salaried Job Cuts as It Presses UAW for More Concessions
Platinum, Palladium Climb as Investors Turn to Precious Metals in Slowdown
Yip we're all hunky dory... Honestly I don't get it but as they say Mr Market always knows best and he's moving the market up at the moment... at a rate of knots in the US...
So basically we're saying that every time things look bad, we should just buy like crazy on the premise that bad debt issues will simply be addressed by throwing more money at the problem? Surely the world has gone crazy?!
One would presume that with the oil price not going anywhere and the Rand falling to R9.58 to the US dollar - even after our rate cut yesterday - then signs would be there that things wouldn't be looking that great for Sasol... But who knows.
I'm still bearish on the global economy and stock markets in general, but one thing that a couple of traders have picked up on is the movement in the Baltic Dry Index (BDI)... After being slaughtered somewhere in the magnitutde of 97% in 2008, the index picked up a bit in the last few days. Shipping firm Grindrod has responded very nicely locally, as have US counterparts...
The question is - does this movement in the BDI indicate we've hit something of a bottom and traders can start looking at resource shares again? Conventional logic would seem to say that's what the fund managers have done in the last few days to set our resource sector alight.
Is it false hope and going to simply inflate the PE multiples of the resource shares? My humble opinion - yes indeedy...
Again just look at the facts - the car industry in SA has now gone to government to get a bailout. We're shedding a bucket load of jobs, lending is freezing up here locally, car dealerships are going out of business etc. etc.
Dividend wise - Mutual & Federal announced today it wouldn't be declaring a final dividend in light of the turmoil in the markets. If I had to guess, I don't think they'll be the last to do this and when dividends go so does a lot of the investment appeal...
I guess the important thing is not to fight what's happening in the market, but rather have a clear investment strategy.
Tuesday, February 3, 2009
Investment Strategies
Was going to provide some commentary on the market action today but I see the Americans are bumping their heads on a 8000 point Dow at the moment so thought it could wait for a bit.
Instead I wanted to throw out a question to our readers around investment strategies.
Basically I have a blend of trading and investment type positions. The investment positions tend to be buy and hold type investments in blue chips and property stocks.
I have some dodgy but potentially interesting small cap positions but the idea of some of the blue chips is to diversify some risk across the portfolio and potentially develop a solid dividend pool behind the trading positions.
The trading positions I guess are self explanatory - pick the positions, if I make a profit then I'll take that off the table and tuck it into some "fire and forget" shares. My current favourites are Reinet and the Foord Compass Debentures (largely for the dividend yield from them).
The others that are always appealing are high yielding preference shares (Standard Bank, African Bank and Grindrod) - why work for the money when others are grafting for you?!
In my case - my investments tend to be a diverse pool of solid companies with long histories - yeah yeah Reinet a pretty new vehicle but long history of management.
However, another guy I know makes his trading profits and then dumps them regularly into Richemont because he likes the fundamentals and the story over the long run.
Other guys I know simply keep putting the profits back onto the table into bigger trades or alternatively going and spoiling themselves (something that might have been considered laughable last year but use-it-or-lose-it seems to be the name of the game these days.)
I guess my question to our readers is - WHAT DO YOU DO WITH THE PROFITS YOU MAKE?
Instead I wanted to throw out a question to our readers around investment strategies.
Basically I have a blend of trading and investment type positions. The investment positions tend to be buy and hold type investments in blue chips and property stocks.
I have some dodgy but potentially interesting small cap positions but the idea of some of the blue chips is to diversify some risk across the portfolio and potentially develop a solid dividend pool behind the trading positions.
The trading positions I guess are self explanatory - pick the positions, if I make a profit then I'll take that off the table and tuck it into some "fire and forget" shares. My current favourites are Reinet and the Foord Compass Debentures (largely for the dividend yield from them).
The others that are always appealing are high yielding preference shares (Standard Bank, African Bank and Grindrod) - why work for the money when others are grafting for you?!
In my case - my investments tend to be a diverse pool of solid companies with long histories - yeah yeah Reinet a pretty new vehicle but long history of management.
However, another guy I know makes his trading profits and then dumps them regularly into Richemont because he likes the fundamentals and the story over the long run.
Other guys I know simply keep putting the profits back onto the table into bigger trades or alternatively going and spoiling themselves (something that might have been considered laughable last year but use-it-or-lose-it seems to be the name of the game these days.)
I guess my question to our readers is - WHAT DO YOU DO WITH THE PROFITS YOU MAKE?
Sunday, February 1, 2009
Wanna know how to frustrate a trader??
Have everything line up for a perfect trade, nice weakness in the share price (if he's short) and then suddenly things change direction almost inexplicably the share reverses direction...
That would be the story of my life on Friday and sometimes I wonder whether I should just exit the trade.
Sasol fell sharply to R261 and then suddenly rebounded to R276. My guess is the weaker rand and a little bit of strength in Texas Tea on Friday got traders in late in the day...
Fortunately the Dow didn't play the game for the bulls and I wouldn't be surprised with downside on Monday. So yip I'm staying short for a while.
I'm still in the equity market and here's what I'm buying at current levels:
Reinet (REI) - Story remains convincing
Foord Compass (FCPD) - These have been a good investment and the yield remains healthy
Shoprite - Top retailing entry
Beige (BEG) - Been buying this small-cap for a while
Bioscience Brands (BIO) - Ditto
Milkworx (MKX) - Heard some chatter about this company and going to take a punt on it
For the rest I remain relatively negative on the market at the moment and still believe we could see the Dow as low as 6800...
That would be the story of my life on Friday and sometimes I wonder whether I should just exit the trade.
Sasol fell sharply to R261 and then suddenly rebounded to R276. My guess is the weaker rand and a little bit of strength in Texas Tea on Friday got traders in late in the day...
Fortunately the Dow didn't play the game for the bulls and I wouldn't be surprised with downside on Monday. So yip I'm staying short for a while.
I'm still in the equity market and here's what I'm buying at current levels:
Reinet (REI) - Story remains convincing
Foord Compass (FCPD) - These have been a good investment and the yield remains healthy
Shoprite - Top retailing entry
Beige (BEG) - Been buying this small-cap for a while
Bioscience Brands (BIO) - Ditto
Milkworx (MKX) - Heard some chatter about this company and going to take a punt on it
For the rest I remain relatively negative on the market at the moment and still believe we could see the Dow as low as 6800...
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