I haven't blogged in a while - been sitting back watching the fun and games on the market and trying to work out where this whole thing is going.
Some very interesting things happening at the moment and volatility seems to be the story of the day.
I battle to find value in this market at the moment. I don't like what is happening in Europe and I think there will be some fall-out to come.
Having said that, the Dow below 10000 almost feels "orderly" rather than out and out panic and that's ok.
There are 3 stocks which catch my eye at the moment and investors might want to consider:
African Bank
Long been a popular choice in my portfolio. Results were not great and the market has turned a little sour on them but they have a lot of positives that could be taken out of these results. Ellerines systems are sorted, they are growing again and the demand for their kind of credit is coming back slowly. But more important than all of that is their ability to generate cash - and quickly!
I would buy it at under R30.
Buildmax
Brait reported earlier this week and they managed to keep this one out of their reporting. This coal mining contractor has been a disaster for the private equity firm falling from R1.15 to 30c and now Brait is having to underwrite a R150m.
35c, a rights issue on the cards. This is a story to watch.
Reinet
I've liked Reinet. Done bugger all except mirror British American since it was listed and its off about 15% in the month but in this market, this might not be the worst defensive play around.
Would be adding this to the portfolio at the moment.
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Another interesting thing I picked up this evening is that Zimbabwe is allowing the establishment of four new newspapers. I think this is a further sign that normality is returning to this country which will have a positive spin for many of our resource operators.
Wednesday, May 26, 2010
Friday, May 7, 2010
Finger trouble, burning Europe and Abil fried
What an absolutely intriguing few days on world markets.
A bit of random finger trouble at Citi sends the markets into a tailspin and the Dow drops nearly 10% before you can blink. This is summed up by the literal carnage in Greece and then one of our favourite banking stocks (African Bank Investments Limited - Abil) gets smashed today.
Absolutely intriguing!
Finger Trouble
Make no mistake - Thursdays nonsense is going to piss some US politicians off in a big way. Here they are pushing for regulatory change and trying to convince the public that they are hauling some bankers over the coals and one prick can't decide whether he is selling millions or billions of stock and he sinks stockmarkets across the world.
Story for the rest of the year invariably has to be the politicans against the bankers.
I thought Henry Blodget summed it up really well in this post. Things are overcooked at the moment
Europe is in trouble
Ok that's a given, but I don't think it is the debt issue which is the problem but rather the structural issues facing a number of these economies - they cannot create jobs.
If you think about it, a country going broke is a shrug of the shoulder event. Technically the US is broke and will be for eternity.
Iceland very definately is broke as is Greece... but who actually cares? Ireland, Spain, Portugal and Italy... debt is a way of life get over it. The real question is how are they going to tackle their unemployment issues.
Here are some interesting stats which I've dug up around unemployment in a couple of Europes major regions:
Greece has a population of 11 million.
In contrast France has around 63 million people while Spain has around 41 million. Look at a map of Europe for a moment. Spain cannot create the number of jobs it needs - the job seekers can only push one way - France.
Without oversimplying it - if you think a couple thousand Greeks know how to riot can you imagine what it will look like with a couple hundred thousand French and Spaniards venting their fury...
I would be watching these two economies very closely for changes in the social landscape.
African Bank Investments Limited (Abil)
This is one of my favoured banking shares in the South African market - great company in a great sector.
Anyway the share got slaughtered today - off about 5.5% to close at R32.15.
Those pricks at Deutsche Bank apparently put out a pretty negative analyst report earlier this week which didn't help sentiment which was a bit of a pre-cursor to the following trading update out of them today:
Shareholders are advised that headline earnings and headline earnings per share for the period are expected to decline by 2% relative to the R937 million and 116.6 cents per share respectively reported for the first six months of the 2009 financial year. The African Bank business unit is expected to report a decrease in headline earnings of 5%, whilst Ellerines is expected to report a 6% increase relative to the results reported for the six months to 31 March 2009.
A whole 2%... how frightening...
Well of course it is down, the country is still losing jobs (190000 in the last quarter). Guess what - you don't get a loan (even from Abil) if you don't have a job.
All these analysts are so focused on Ellerines - guess what trading has actually improved in the last six months... wankers.
Personally I still like the stock. While the rest of the big banks with their investment bankers (who can't even push the right buttons) have to worry about nasty politicians and regulators wanting to check out all their cavities, Abil can get on with the business of lending and THAT is what they are good at.
A bit of random finger trouble at Citi sends the markets into a tailspin and the Dow drops nearly 10% before you can blink. This is summed up by the literal carnage in Greece and then one of our favourite banking stocks (African Bank Investments Limited - Abil) gets smashed today.
Absolutely intriguing!
Finger Trouble
Make no mistake - Thursdays nonsense is going to piss some US politicians off in a big way. Here they are pushing for regulatory change and trying to convince the public that they are hauling some bankers over the coals and one prick can't decide whether he is selling millions or billions of stock and he sinks stockmarkets across the world.
Story for the rest of the year invariably has to be the politicans against the bankers.
I thought Henry Blodget summed it up really well in this post. Things are overcooked at the moment
Europe is in trouble
Ok that's a given, but I don't think it is the debt issue which is the problem but rather the structural issues facing a number of these economies - they cannot create jobs.
If you think about it, a country going broke is a shrug of the shoulder event. Technically the US is broke and will be for eternity.
Iceland very definately is broke as is Greece... but who actually cares? Ireland, Spain, Portugal and Italy... debt is a way of life get over it. The real question is how are they going to tackle their unemployment issues.
Here are some interesting stats which I've dug up around unemployment in a couple of Europes major regions:
- Spain - 20% unemployment
- Italy - 8.6%
- Portugal - 10.10%
- UK - 8%
- Ireland - 12.7%
- France - 10%
- Poland - 12.9%
- And then Germany for some context - 7.5%
Greece has a population of 11 million.
In contrast France has around 63 million people while Spain has around 41 million. Look at a map of Europe for a moment. Spain cannot create the number of jobs it needs - the job seekers can only push one way - France.
Without oversimplying it - if you think a couple thousand Greeks know how to riot can you imagine what it will look like with a couple hundred thousand French and Spaniards venting their fury...
I would be watching these two economies very closely for changes in the social landscape.
African Bank Investments Limited (Abil)
This is one of my favoured banking shares in the South African market - great company in a great sector.
Anyway the share got slaughtered today - off about 5.5% to close at R32.15.
Those pricks at Deutsche Bank apparently put out a pretty negative analyst report earlier this week which didn't help sentiment which was a bit of a pre-cursor to the following trading update out of them today:
Shareholders are advised that headline earnings and headline earnings per share for the period are expected to decline by 2% relative to the R937 million and 116.6 cents per share respectively reported for the first six months of the 2009 financial year. The African Bank business unit is expected to report a decrease in headline earnings of 5%, whilst Ellerines is expected to report a 6% increase relative to the results reported for the six months to 31 March 2009.
A whole 2%... how frightening...
Well of course it is down, the country is still losing jobs (190000 in the last quarter). Guess what - you don't get a loan (even from Abil) if you don't have a job.
All these analysts are so focused on Ellerines - guess what trading has actually improved in the last six months... wankers.
Personally I still like the stock. While the rest of the big banks with their investment bankers (who can't even push the right buttons) have to worry about nasty politicians and regulators wanting to check out all their cavities, Abil can get on with the business of lending and THAT is what they are good at.
Saturday, May 1, 2010
Long dollar, short euro
"In the next months there will be many demonstrations, nobody knows what really is going to happen, But people know there is no other way than to come down into the streets and protest"...
... that was the message from one of the protesters involved in riots in Greece earlier today.
This is serious kak methinks, and I can't see how it won't spread to at least Portugal and Spain over the next week. I read a report that Spain's unemployment rate is now well over 20%... this is not something that gets addressed quickly and even a hint of panic and people will start pulling money out of the banks.
The Euro I reckon is toast unless the regulators take some serious action to try and co-ordinate their efforts quicker. With that in mind I've gone long dollar, short euro on Friday. I should have entered the trade earlier but I reckon it is now terminal...
The euro recovered a bit late on Friday night on speculation that the Greek bailout will be sorted out over the weekend but if Spain and Portugal fall over early next week then there is going to be carnage.
Not too much else looking that attractive is there?
... that was the message from one of the protesters involved in riots in Greece earlier today.
This is serious kak methinks, and I can't see how it won't spread to at least Portugal and Spain over the next week. I read a report that Spain's unemployment rate is now well over 20%... this is not something that gets addressed quickly and even a hint of panic and people will start pulling money out of the banks.
The Euro I reckon is toast unless the regulators take some serious action to try and co-ordinate their efforts quicker. With that in mind I've gone long dollar, short euro on Friday. I should have entered the trade earlier but I reckon it is now terminal...
The euro recovered a bit late on Friday night on speculation that the Greek bailout will be sorted out over the weekend but if Spain and Portugal fall over early next week then there is going to be carnage.
Not too much else looking that attractive is there?
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