So we are slowly sliding out of an interesting 2010 and treading with some trepidation into 2011. Markets are interesting at the moment... I wouldn't say tough because I'm still happy being long for the simple reason that there is a sea of liquidity out there desperately seeking places to be parked. I think it is pretty obvious that people are not going to make (or even protect) money by leaving it in the bank.
I have three active trades on the go at the moment:
Sasol
I like this share. Good dividend payer, growth prospects, trades at a discount to its peers and hell its been largely unloved in 2010 despite oil now heading for $100 a barrel. The company started the year at R290 a share and up until September it didn't go anywhere but in the last couple of weeks its been slowly
gaining some momentum and looks like it wants to push aboe R340 a share.
Call me a cynic but the company is widely held by domestic asset managers and I wouldn't be surprised if this stock starts getting some serious media attention in the early half of 2011 as they try and ramp up their portfolios. Sasol also recently announced a $1bn investment in a Canadian project and a lot of its other Gas to Liquids (GTL) plants are coming on line and pushing up production volumes.
All signs are there that Sasol is kicking up a gear so I am comfortable being long Sasol at R335.
The Nasdaq
Technology stocks have been out of favour in the US for a while now but there is lot going for them. The last couple of quarters have been good for telecomms and tech stocks with many indicating share buybacks and dividends were on the cards. I stand under correction but I think Intel has lifted its dividend in each of the last five years.
US companies have sat with alot of cash on their balance sheets over the last two years and at some point they are going to look to deploy that capital. That means investing in new technology, PCs, semi-conductors etc. A Nasdaq at 2600 doesn't seem to be too risky in my books.
The Dollar
Considering how I got smacked around by US currency over the last six months I probably need my head read but here's my logic:
- The US is coming out of recession
- AIG, Bank of America and Citigroup are repaying their debts
- The emerging market story is interesting but it has meant that many of the US companies are offering some seriously good value. I wouldn't be surprised if demand for US assets starts to rise as institutional investors start realising that they get better value for their money in the US rather than directly ploughing money into emerging markets?
I thought about it a bit and decided to go long dollar, short yen. There is some uncertainty in Asia with the Korean spat so I wonder if the basket of Asian currencies might come under some selling pressure?
Let's see how those play out over the next few weeks.... Happy Xmas and New Year folks
Monday, December 27, 2010
Wednesday, December 22, 2010
The Wire: New offering from Global Trader
I was just forwarded the following announcement from Global Trader and I thought it was quite an interesting idea for day traders / investors. Anybody tried it out? Thoughts?
You can check out the offering here.
The Wire. A Christmas gift worth waiting for
By Charles Savage, CEO of Global Trader
I don’t remember exactly when I first white boarded my vision for Global Traders’ online community offering but it was sometime in 2007. I clearly remember the enthusiasm and excitement with which the IT and marketing teams met my idea, excitement more about the fact that the CEO had finally lost his mind and had nothing to do with my idea at all.
Two Chief Technology Officers later and the work of people best described as wizards, magicians and conjurers and we launched version one of The Wire. The Wire is the name for the new online world we have created and is the centre of our financial community and the platform from which all our community driven services come to life.
It is a closed community in the sense that it is available to our live trading clients only but, beyond this, the restrictions fall away swiftly. The Wire is free to air and it is a radical new approach to delivering meaningful, actionable financial information that enables collaboration and communication and breaks down the barriers between those that trade and those that should trade.
At Global Trader we make it our business to smash down these barriers because we believe that for too long financial markets have unjustifiably been shrouded in mystery and intrigue. It is seen as the realm of engineers, actuaries and rocket scientists that, for the most part, have discouraged you from doing it yourself. To quote Peter Lynch, one of the most successful Wall Street investors of all time, “everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” The truth is that Global Trader has now made trading simple.
On The Wire you can call yourself whatever you like, talk to traders, publish your research and views, read blogs about investing, technology trends affecting trading and read about how we view the world of investing. You can live vicariously through your trading alias and learn from fellow traders. When it comes to the what, when and how successfully you trade The Wire is an open book.
Do you remember your first casino experience? I do and I’m pretty sure it went something like this. You wondered around the casino halls in awe of the sounds, light and music, stopping occasionally to peer over the shoulder of the confident punters taking up the seats at the machines and tables. You paused and looked on in wonder at the piles of chips in front of some of the players and, after plucking up enough courage, reached forward and placed your chips behind one of them. You won some and you lost some but you learnt from every hand and grew in confidence until finally a seat became free and you pounced on it.
With The Wire’s Twades you can stand behind real live traders, follow their trades, track their success and if you like even put your money behind their portfolio punts until you feel comfortable enough to join them at the table. If you’ve played enough Blackjack, as I have, you will know that it is always good to cover a couple of boxes. Twades is our “first flight” service to launch on The Wire with more first flight services lined up for 2011.
Then there’s She–Ra, my personal favourite financial blogger, who publishes her work on The Wire’s Skirt Length Theory blog. If there is still some youth about you then you are going to love her approach to financial markets. She says of the myth surrounding trading, “Do you see images of a high risk, fast paced environment populated by coked up investment w*nkers or images of old fogies that have made their millions sitting in silk slippers barking orders at their brokers whilst smoking a pipe? If so then you would be only the tiniest bit right and you would also be SO wrong!”
I have no doubt that the launch of the Wire will be reflected on in Global Traders’ history as the defining moment that best demonstrated our commitment to the vision to boldly go where no South African financial service provider has even dared to dream about. Welcome to the New World!
Insider trading just got trumped by Twades! The question is, were you following?
You can check out the offering here.
The Wire. A Christmas gift worth waiting for
By Charles Savage, CEO of Global Trader
I don’t remember exactly when I first white boarded my vision for Global Traders’ online community offering but it was sometime in 2007. I clearly remember the enthusiasm and excitement with which the IT and marketing teams met my idea, excitement more about the fact that the CEO had finally lost his mind and had nothing to do with my idea at all.
Two Chief Technology Officers later and the work of people best described as wizards, magicians and conjurers and we launched version one of The Wire. The Wire is the name for the new online world we have created and is the centre of our financial community and the platform from which all our community driven services come to life.
It is a closed community in the sense that it is available to our live trading clients only but, beyond this, the restrictions fall away swiftly. The Wire is free to air and it is a radical new approach to delivering meaningful, actionable financial information that enables collaboration and communication and breaks down the barriers between those that trade and those that should trade.
At Global Trader we make it our business to smash down these barriers because we believe that for too long financial markets have unjustifiably been shrouded in mystery and intrigue. It is seen as the realm of engineers, actuaries and rocket scientists that, for the most part, have discouraged you from doing it yourself. To quote Peter Lynch, one of the most successful Wall Street investors of all time, “everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” The truth is that Global Trader has now made trading simple.
On The Wire you can call yourself whatever you like, talk to traders, publish your research and views, read blogs about investing, technology trends affecting trading and read about how we view the world of investing. You can live vicariously through your trading alias and learn from fellow traders. When it comes to the what, when and how successfully you trade The Wire is an open book.
Do you remember your first casino experience? I do and I’m pretty sure it went something like this. You wondered around the casino halls in awe of the sounds, light and music, stopping occasionally to peer over the shoulder of the confident punters taking up the seats at the machines and tables. You paused and looked on in wonder at the piles of chips in front of some of the players and, after plucking up enough courage, reached forward and placed your chips behind one of them. You won some and you lost some but you learnt from every hand and grew in confidence until finally a seat became free and you pounced on it.
With The Wire’s Twades you can stand behind real live traders, follow their trades, track their success and if you like even put your money behind their portfolio punts until you feel comfortable enough to join them at the table. If you’ve played enough Blackjack, as I have, you will know that it is always good to cover a couple of boxes. Twades is our “first flight” service to launch on The Wire with more first flight services lined up for 2011.
Then there’s She–Ra, my personal favourite financial blogger, who publishes her work on The Wire’s Skirt Length Theory blog. If there is still some youth about you then you are going to love her approach to financial markets. She says of the myth surrounding trading, “Do you see images of a high risk, fast paced environment populated by coked up investment w*nkers or images of old fogies that have made their millions sitting in silk slippers barking orders at their brokers whilst smoking a pipe? If so then you would be only the tiniest bit right and you would also be SO wrong!”
I have no doubt that the launch of the Wire will be reflected on in Global Traders’ history as the defining moment that best demonstrated our commitment to the vision to boldly go where no South African financial service provider has even dared to dream about. Welcome to the New World!
Insider trading just got trumped by Twades! The question is, were you following?
Friday, December 3, 2010
Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America
I enjoy Matt Taibbi and the "colour" he puts into the story he tells - I don't think anyone will ever forget the now famous paragraph:
"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
The new book from Taibbi was hellishly entertaining, there are some cracking one-liners in it and I still have a good laugh about some of them.
The blurb for the book reads as below:
The dramatic story behind the most audacious power grab in American history The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life. Rolling Stone’s Matt Taibbi here unravels the whole fiendish story, digging beyond the headlines to get into the deeper roots and wider implications of the rise of the grifters. He traces the movement’s origins to the cult of Ayn Rand and her most influential—and possibly weirdest—acolyte, Alan Greenspan, and offers fresh reporting on the backroom deals that decided the winners and losers in the government bailouts. He uncovers the hidden commodities bubble that transferred billions of dollars to Wall Street while creating food shortages around the world, and he shows how finance dominates politics, from the story of investment bankers auctioning off America’s infrastructure to an inside account of the high-stakes battle for health-care reform—a battle the true reformers lost. Finally, he tells the story of Goldman Sachs, the “vampire squid wrapped around the face of humanity.”
Definately worthwhile as a read for Christmas. You can buy it from Kalahari for R205 by clicking HERE or on the cover.
Sunday, October 24, 2010
The Effective Investor - Franco Busetti
I am reading the book "The Effective Investor" by Franco Busetti at the moment and really enjoying it.
One of the real reasons I am enjoying it, is that it is written for a South African investor, by local investment professionals. You recognise the companies, the challenges (e.g. the Rand) and the strategies in general.
On top of this there is none of this gratuitous "institutional" feel to the comments that I find often makes "investing" aloof.
You can find the book at Kalahari HERE for R350 or you can click on the image and it will take you to the item in their online store.
Friday, October 22, 2010
Monday, October 18, 2010
Feedback on JSE trading course?
Has anybody tried this course from Sharenet out?
One of my family members is keen to find an introductory trading course to learn to trade shares on the JSE but I am not sure what these are like. Feedback?
You should be able to click through to the Sharenet site for more info via the banner below.
Let me know - ta!
One of my family members is keen to find an introductory trading course to learn to trade shares on the JSE but I am not sure what these are like. Feedback?
You should be able to click through to the Sharenet site for more info via the banner below.
Let me know - ta!
Saturday, October 16, 2010
Too easy
I have just logged into my e-mail and seen dividend notifications for my holdings in Sasol, FirstRand and Discovery as well as a re-investment notification for my Z-Govi holding and it reminded me how much of investing is simply method and repetition.
For sure there is little glamour in simply clocking up the dividends but you have to ask yourself - why work if you don't have to?!
I had a look at the performance of the Satrix Divi Exchange Traded Fund (ETF) product over the last year and I see that you have enjoyed a return of around 33%. Worst case scenario is an annual dividend yield of 4.5% which is not the worst return around and if you are looking for low-cost dividend investment strategies then this might be a product to consider adding to your portfolio.
Speaking of good dividend payers, has anybody been watching the rise in the Brait shareprice? It seems to have had a bit of a kick over October rising from R21 to above R24. This is one of those stocks I've kept in my portfolio primarily for its dividend yield which is sitting at about 6%.
The company did release a trading statement recently saying that earnings would be up sharply for the six months.
Basic eps and heps: 72.8 ZAR cents
Diluted eps and heps: 72.7 ZAR cents
This puts it on a PE multiple of around 14 times earnings and if you buy into the idea that Brait is the "smart money" then this looks attractive, particularly if the private equity portfolio is at the bottom of its cycle.
Another reason which might be contributing to the rise in the Brait share price is the similar rise in the Buildmax counter, in which Brait is a significant investor. Buildmax has risen from 27c to touch 40c this month and it looks like a turnaround plan is in place.
Happy trading investors.
For sure there is little glamour in simply clocking up the dividends but you have to ask yourself - why work if you don't have to?!
I had a look at the performance of the Satrix Divi Exchange Traded Fund (ETF) product over the last year and I see that you have enjoyed a return of around 33%. Worst case scenario is an annual dividend yield of 4.5% which is not the worst return around and if you are looking for low-cost dividend investment strategies then this might be a product to consider adding to your portfolio.
Speaking of good dividend payers, has anybody been watching the rise in the Brait shareprice? It seems to have had a bit of a kick over October rising from R21 to above R24. This is one of those stocks I've kept in my portfolio primarily for its dividend yield which is sitting at about 6%.
The company did release a trading statement recently saying that earnings would be up sharply for the six months.
Basic eps and heps: 72.8 ZAR cents
Diluted eps and heps: 72.7 ZAR cents
This puts it on a PE multiple of around 14 times earnings and if you buy into the idea that Brait is the "smart money" then this looks attractive, particularly if the private equity portfolio is at the bottom of its cycle.
Another reason which might be contributing to the rise in the Brait share price is the similar rise in the Buildmax counter, in which Brait is a significant investor. Buildmax has risen from 27c to touch 40c this month and it looks like a turnaround plan is in place.
Happy trading investors.
Friday, October 1, 2010
Small cap update - 2 October 2010
Hello fellow traders...
I see it has been a good few months since I last updated this blog which probably does not reflect that well on me.
What DOES however reflect quite well on me is the TrustCo share price over that period.
Let's take a look at some of the small-cap shares that have caught my eye over the last few months and where they are at now.
TrustCo
This share has really done nicely. Since I last blogged it, has risen from the 20's to touch a high of 65c with a lot of media attention. Directors have bought a whole whack of shares as well which has helped the story along.
In September, the company announced transactions with Econet and the International Finance Corporation (IFC) both of which should have an impact on the business.
Still think there is value in it if you are patient.
Interwaste
Share price wise this company has largely gone sideways over the last few months, but it is still up a bit since April.
On the plus side the financial results have shown something of a turnaround from the previous financial year and they have gained a number of new clients - the benefits of which should probably come through in the second half of the year. Guidance from management is that the second half of the year is traditionally stronger as well so let's see what comes through for the full-year.
One thing which needs to be watched a little closely is the cash position of the business.
The company overdraft facility has risen from R4.7m to nearly R30m for the six months ended June 2010. There is also negative cashflow as the business has made some serious capital investments.
For the 12-months, the net cash position had declined to -R21m.
Buildmax
This has been such a mixed bag sometimes I wonder.
The share is up from 27c to 31c and it looks like some serious corrective action is being taken to try and turn this business around.
New management are in place, rights issues have been sorted.
I'm gonna hang on to this one.
IPSA
Little to write home here. The share has gone nowehere.
However this announcement at the end of August will give shareholders some cheer:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that its wholly-owned subsidiary, Newcastle Cogeneration (Pty.) Limited has entered into a power purchase agreement ("PPA") with Eskom, the South African electricity parastatal, under the medium term power purchase programme ("MTPPP"). Under the new PPA all electricity output from the plant would be sold to Eskom for the period to 31 March 2015, and is based on 13 MW of capacity."
Again lets see what this translates into operationally.
RE:CM and Calibre
I got my hands on a few of these pref-shares last month and will try and get a few more as time goes by. I like Piet Viljoen in terms of his style of value investing and would like to think he can add value through this vehicle.
The share listed at R10 and has floated somewhere between R10 and R11 but there has been really limited liquidity so that is something that makes this tricky to watch.
Viljoen said that investors should expect "slow and steady" to start with so if you have a long-term investment horizon, then I'd probably be adding a few more of these to the portfolio as well.
Some others to consider
Three other stocks I have nibbled at in the last few months are Nigerian oil and gas group Oando, private equity fund Brait and Paladin Capital.
There seems to be some action happening at Paladin as the share price has risen more than 20% in the last few weeks. However this puts it well above its net asset value which is not always that easy to justify buying at the moment.
I see it has been a good few months since I last updated this blog which probably does not reflect that well on me.
What DOES however reflect quite well on me is the TrustCo share price over that period.
Let's take a look at some of the small-cap shares that have caught my eye over the last few months and where they are at now.
TrustCo
This share has really done nicely. Since I last blogged it, has risen from the 20's to touch a high of 65c with a lot of media attention. Directors have bought a whole whack of shares as well which has helped the story along.
In September, the company announced transactions with Econet and the International Finance Corporation (IFC) both of which should have an impact on the business.
Still think there is value in it if you are patient.
Interwaste
Share price wise this company has largely gone sideways over the last few months, but it is still up a bit since April.
On the plus side the financial results have shown something of a turnaround from the previous financial year and they have gained a number of new clients - the benefits of which should probably come through in the second half of the year. Guidance from management is that the second half of the year is traditionally stronger as well so let's see what comes through for the full-year.
One thing which needs to be watched a little closely is the cash position of the business.
The company overdraft facility has risen from R4.7m to nearly R30m for the six months ended June 2010. There is also negative cashflow as the business has made some serious capital investments.
For the 12-months, the net cash position had declined to -R21m.
Buildmax
This has been such a mixed bag sometimes I wonder.
The share is up from 27c to 31c and it looks like some serious corrective action is being taken to try and turn this business around.
New management are in place, rights issues have been sorted.
I'm gonna hang on to this one.
IPSA
Little to write home here. The share has gone nowehere.
However this announcement at the end of August will give shareholders some cheer:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that its wholly-owned subsidiary, Newcastle Cogeneration (Pty.) Limited has entered into a power purchase agreement ("PPA") with Eskom, the South African electricity parastatal, under the medium term power purchase programme ("MTPPP"). Under the new PPA all electricity output from the plant would be sold to Eskom for the period to 31 March 2015, and is based on 13 MW of capacity."
Again lets see what this translates into operationally.
RE:CM and Calibre
I got my hands on a few of these pref-shares last month and will try and get a few more as time goes by. I like Piet Viljoen in terms of his style of value investing and would like to think he can add value through this vehicle.
The share listed at R10 and has floated somewhere between R10 and R11 but there has been really limited liquidity so that is something that makes this tricky to watch.
Viljoen said that investors should expect "slow and steady" to start with so if you have a long-term investment horizon, then I'd probably be adding a few more of these to the portfolio as well.
Some others to consider
Three other stocks I have nibbled at in the last few months are Nigerian oil and gas group Oando, private equity fund Brait and Paladin Capital.
There seems to be some action happening at Paladin as the share price has risen more than 20% in the last few weeks. However this puts it well above its net asset value which is not always that easy to justify buying at the moment.
Thursday, August 5, 2010
Buildmax
This is a stock that I have been talking about for a while but have pretty much sat with egg on my face since making the call.'
Since June the share price has carried on sliding dropping from 50c to as low as 21c. Considering that in September 2007 and the private equity boys at Brait bought in at about 120c this has been a bit of a disappointment.
Anyways a new SENS announcement went out after the close of trade and this one catches my eye:
Buildmax is making a rights offer of 2.31 (two point three one) rights offer shares for every one Buildmax share held at a price of 12.5c per share. Brait and Coronation - two of the better value finders out there - have made an offer to underwrite the deal.
I guess for those who have a longer term investment horizon, this might not be the worst one to sit on....
Since June the share price has carried on sliding dropping from 50c to as low as 21c. Considering that in September 2007 and the private equity boys at Brait bought in at about 120c this has been a bit of a disappointment.
Anyways a new SENS announcement went out after the close of trade and this one catches my eye:
Buildmax is making a rights offer of 2.31 (two point three one) rights offer shares for every one Buildmax share held at a price of 12.5c per share. Brait and Coronation - two of the better value finders out there - have made an offer to underwrite the deal.
I guess for those who have a longer term investment horizon, this might not be the worst one to sit on....
Saturday, June 26, 2010
Small cap update
Two of the small caps that I have been tipping on this blog, and one I have been keeping half an eye on, have been making some waves in recent weeks and thought I would do something of an update on them quickly.
IPSA
A couple of people I have spoken to this week have been a little cynical on this stock but there was an announcement from them released on SENS which says:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that, on 23 June 2010, its NewCogen subsidiary re-started production of electricity under an emergency contract with Eskom. Under the contract the plant will provide electricity to support the South African economy during a period of power shortages which coincides with the FIFA World Cup. While the contract is due to end on 30th June, 2010 Eskom has indicated publicly that it may request an extension at least until the WorldCup Final on 11th July. Meantime NewCogen and Eskom are awaiting formal notification from NERSA, the electricity regulator, that a six year MTPPP power purchase agreement has finally been approved. A further announcement will be made on the MTPPP contract as soon as news is available."
Is it a case of IPSA just trying to get some good PR mileage? Maybe... but the fact of the matter is it literally takes a flick of a switch and the Newcastle plant can be delivering electricity when the country needs it.
It would appear that there has been a shift in thinking and Eskom has adopted the role that independant power producers do have a role to play in the new economy. The share price has not responded particularly positively but I maintain that this could be an interesting small cap to consider.
Interwaste
In April I mentioned that Interwaste was one you should be considering for your portfolio. At that time the share was floating around below 50c. It has gradually been ticking up and is now trading around 70c.
Looking back over the SENS announcements a couple of things caught my eye. Firstly at the end of April one of the directors bought a couple of tranches of the shares which gave me a bit of confidence.
The other thing was the announcement that Funani Mojono had joined the board as an independant non-executive. He seems to be quite well connected within ArcelorMittal and this might well have some spin-offs for the company.
TrustCo
This is a little financial services firm that I have been eyeing for a while. Based in Namibia they have yet to set their Johannesburg listing alight. However earlier this week they announced that they had won their court case with the SABC and were due around R24m from the victory including costs.
It is not a massive sum of money but it certainly provides the company with a way forward.
Might be worth a punt - the liquidity just worries me a bit.
IPSA
A couple of people I have spoken to this week have been a little cynical on this stock but there was an announcement from them released on SENS which says:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that, on 23 June 2010, its NewCogen subsidiary re-started production of electricity under an emergency contract with Eskom. Under the contract the plant will provide electricity to support the South African economy during a period of power shortages which coincides with the FIFA World Cup. While the contract is due to end on 30th June, 2010 Eskom has indicated publicly that it may request an extension at least until the WorldCup Final on 11th July. Meantime NewCogen and Eskom are awaiting formal notification from NERSA, the electricity regulator, that a six year MTPPP power purchase agreement has finally been approved. A further announcement will be made on the MTPPP contract as soon as news is available."
Is it a case of IPSA just trying to get some good PR mileage? Maybe... but the fact of the matter is it literally takes a flick of a switch and the Newcastle plant can be delivering electricity when the country needs it.
It would appear that there has been a shift in thinking and Eskom has adopted the role that independant power producers do have a role to play in the new economy. The share price has not responded particularly positively but I maintain that this could be an interesting small cap to consider.
Interwaste
In April I mentioned that Interwaste was one you should be considering for your portfolio. At that time the share was floating around below 50c. It has gradually been ticking up and is now trading around 70c.
Looking back over the SENS announcements a couple of things caught my eye. Firstly at the end of April one of the directors bought a couple of tranches of the shares which gave me a bit of confidence.
The other thing was the announcement that Funani Mojono had joined the board as an independant non-executive. He seems to be quite well connected within ArcelorMittal and this might well have some spin-offs for the company.
TrustCo
This is a little financial services firm that I have been eyeing for a while. Based in Namibia they have yet to set their Johannesburg listing alight. However earlier this week they announced that they had won their court case with the SABC and were due around R24m from the victory including costs.
It is not a massive sum of money but it certainly provides the company with a way forward.
Might be worth a punt - the liquidity just worries me a bit.
Saturday, June 19, 2010
Vunani - see through the BS
I noticed this week that empowerment financial services firm Vunani has completed its second acquisition in the last two weeks buying an additional 31% in Peregrine iQ the fund management business held by Peregrine and a 51% stake in something called the Jala Group.
With that in mind I had given it some serious consideration as a potential investment as a bit of a rebound and thought I would take a closer look:
A couple of observations here:
With that in mind I had given it some serious consideration as a potential investment as a bit of a rebound and thought I would take a closer look:
A couple of observations here:
- Peregrine are a very smart bunch of people and in the back of my head I am wondering why they are allowing Vunani to end up with 51% of this business? These two firms have a funny relationship with one another and I wouldn't be surprised if Peregrine were quite happy to turn Vunani into their patsy for something they don't want.
- Peregrine can't really place much value on a business which supposedly has R11bn in assets under management - the transaction didn't even warrant a cautionary or a disclosure of the level of investment. For a tiny little business like Vunani (in the listed sense) that's odd.
But it is this Jala Group thing that really stoked my curiousity and got me digging around a bit...
Ok so here is the deal - 28 May Vunani says it has bought a 51% stake in this thing called the Jala Group.
- This Jala Group thing - a quick Google search doesn't come up with much except a bunch of media whores reproducing the press release that Vunani put out. More curious is that if you go to the website Jala.co.za the page has already been rebranded as Vunani Technology Ventures... but no real sign that there was ever any kind of cached web presence for these guys 20 or 30 days ago. Seems to ring a little hollow. Wonder if there was anything there in the first place?
- For an IT company with a track-record of just 9 months, this is a bit peculiar. If there is one thing IT companies are good at it is in leaving a track record of their transactions and skills on the various search engines.
- The site itself is designed in HTML. I can't think of any graphic designer who would design a new website - it has to be new because it has all been rebranded from Jala to Vunani in the last month - who would design anything in HTML.
- A quick look at the LinkedIn profiles for the directors makes for interesting reading as well. The guys had updated their employment profiles in April 2010 (i.e. before the market was informed of the transaction). Surely there has to be a disclosure issue here?
- Apart from Maree and McKellar who have something of a track record in IT, the associates seem to be a little lightweight. They have a psychologist for some bizarre reason and then they have Alon Hendel whose claim to fame (according to the website) was launching Tycoon.co.za that light-weight entrepreneurs thing for Moneyweb. No offence but we know how that ended up
- I don't put too much faith into Cipro but a quick search reveals that the Jala Group was registered in June last year and provides "Supply of Stationary and Related Services"
- There is no registered business called "Vunani Technology Ventures" or anything along those lines which has a link to Vunani. I appreciate its a new "re-named" venture but still the business needs to be registered.
- For an empowerment company Vunani Technology Ventures seems to have an awful lot of white faces on its board
But the real kicker for me is the claim that Jala / Vunani Technology Ventures has been helping some of its clients since April 2008. That's odd because the business only came into being at the end of last year.
In other words the Jala Group is not really a business. It is a couple of people who get asked for some advice from time to time and may sit on a few boards but there is very little in the way of assets here. The IP for this business sits in the hands of Maree and McKellar and whoever they are mates with and if they decide to walk away there is very little that would be appear to be classified as an "asset" at the moment.
And THIS is the problem with Vunani - they are so busy cobbling together shit that they don't stick to what they could be good at.
As tempting as it is that Vunani is suddenly coming good the numbers still don't give any indication that they are on the recovery path - rather the acquisitions are a case of bullshit trying to baffle brains.
For the year ended 31 December
- Turnover of R121m plus R15 in other income produced an operating profit of R8m
- Cash negative from operations of R135m out the door
- Net cash - R3m in the bank. If Vunani sneezes or has one bad month its screwed
- It obviously didn't use its own cash resources to pay for either of these acquisitions so does that mean more debt has been taken on a group which has just had to restructure?
- Vunani's debt effectively sunk it - there is a note in its March report saying that if its debt wasn't restructured it was effectively game over. The debt got restructured but then it runs around doing odd things rather than getting its house in order.
At first glance this might have the look of an interesting punt but if you peel back the curtain even a little bit the risk-reward trade-off is not even remotely attractive.
Monday, June 7, 2010
RE:CM and Calibre
For those who buy into long-term value investing there is an interesting product listing today on the JSE that might pique your interest.
It is a closed end fund managed by leading value investor Piet Viljoen from RE:CM and is trading under the name RE:CM & Calibre (RAC) on the JSE.
Effectively the fund will be managed by these guys (who hold a high level of ownership in the underlying fund) and they'll be kicking off with R450m in cash.
The mandate for this fund is more flexible than a typical unit trust and can invest in debt, unlisted investments etc.
Don't expect fireworks from it initially but I will probably try and pick up a few during the course of trading today.
It is a closed end fund managed by leading value investor Piet Viljoen from RE:CM and is trading under the name RE:CM & Calibre (RAC) on the JSE.
Effectively the fund will be managed by these guys (who hold a high level of ownership in the underlying fund) and they'll be kicking off with R450m in cash.
The mandate for this fund is more flexible than a typical unit trust and can invest in debt, unlisted investments etc.
Don't expect fireworks from it initially but I will probably try and pick up a few during the course of trading today.
Wednesday, May 26, 2010
Market ramblings
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.
----------------------------
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.
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.
----------------------------
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.
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?
Monday, April 19, 2010
SA small caps
I see that there has been quite a lot of talk about South African small caps in recent weeks. Probably because the market has been so kak that people have nothing better to talk about.
With that in mind, I thought it would be fun to look at some of the small-caps which appear on my screen and see whether other traders agree?
Beige Holdings
I have been tipping this one for ages and so far it has gone nowhere fast. This should in theory be an easy stock to double your money on, but geez I have been saying that for how long and I'm still waiting.
ISA
This is a good stock in a growth industry. Cash generative, no debt and it actually pays a dividend - a rarity in the IT sector. Internet and IT security is going to continue to be a key industry going forward. ASk anybody who has had their home or work PC or mobile device crippled by a computer virus and you will appreciate why a business like this has so much to offer and will consistently be able to achieve ongoing annuity income.
Interwaste
I walked to the shops this morning and was aware of all the uncollected rubbish on the pavement from last weeks municipal strike. Its unpleasant to live in a decent neighbourhood and be surrounded by flies and rotting waste and there is not a hell of a lot that you as the ordinary consumer can do about it.Now imagine how much waste is being generated by businesses and more importantly how much it costs to deal with that waste. This share hasn't exactly covered itself in glory since being listed, but its a good industry to be in with very high barriers to entry.
Buildmax
I was actually checking up on my Brait shares and I was reminded that the Brait guys paid R1.50 a share for Buildmax. Now its trading around 50c a share. I still think it is a good story for those with a longer-term appetite.
Anybody got any better suggestions?
With that in mind, I thought it would be fun to look at some of the small-caps which appear on my screen and see whether other traders agree?
Beige Holdings
I have been tipping this one for ages and so far it has gone nowhere fast. This should in theory be an easy stock to double your money on, but geez I have been saying that for how long and I'm still waiting.
ISA
This is a good stock in a growth industry. Cash generative, no debt and it actually pays a dividend - a rarity in the IT sector. Internet and IT security is going to continue to be a key industry going forward. ASk anybody who has had their home or work PC or mobile device crippled by a computer virus and you will appreciate why a business like this has so much to offer and will consistently be able to achieve ongoing annuity income.
Interwaste
I walked to the shops this morning and was aware of all the uncollected rubbish on the pavement from last weeks municipal strike. Its unpleasant to live in a decent neighbourhood and be surrounded by flies and rotting waste and there is not a hell of a lot that you as the ordinary consumer can do about it.Now imagine how much waste is being generated by businesses and more importantly how much it costs to deal with that waste. This share hasn't exactly covered itself in glory since being listed, but its a good industry to be in with very high barriers to entry.
Buildmax
I was actually checking up on my Brait shares and I was reminded that the Brait guys paid R1.50 a share for Buildmax. Now its trading around 50c a share. I still think it is a good story for those with a longer-term appetite.
Anybody got any better suggestions?
Saturday, April 17, 2010
Goldman Sachs kicked in the nuts
I remember watching a movie once where a new kid starts a school after being bullied at the old school. Sure enough this geeky looking kid gets bullied on the first day and nobody wants to hang around with the local whipping boy. He goes home and asks his dad (or maybe it was his uncle?) what he should do because he can't go through another year of torment.
The advice he gets is very simple: "It doesn't matter whether it is a sneak attack, you walk up to the biggest bully on the playground and you kick him as hard as you can in the nuts in the most public place. If he drops, your year has been made and you will be the hero of the school".
Judging from the fun and games in the US on Friday, I reckon somebody over at the SEC has adopted a similar kind of strategy to "right-size" banking giant Goldman Sachs.
Much like it doesn't matter whether or not the bully has psychological issues or problems at home, I don't think that the SEC is all that concerned about the merits of their case. They've snuck up on an industry giant which believes it is untouchable and possibly fired the first salvo in a carpet bombing exercise aimed at the investment banking industry.
Will this even dent Goldman Sachs? Probably not - the guys that work there are too clever to even blink.
But for the rest of the industry, a very clear message has been sent.
The start of a genuine correction?
I'm undecided on whether or not markets are expensive and I think it is folly to try and play that game. Personally I probably wouldn't be buying too many shares right now if I was looking to make money in the next 6 to 12 months.
In fact if I had to hazard a guess this little assault on GS could be maybe the right kind of message to market participants that it is now time to step back and reassess the landscape.
How many compliance managers at the various investment banks and brokerages are scurrying around this weekend trying to double check that their systems are in place? How many are going to be advising their traders that the regulators are being a little nosier than expected and maybe they need to pull in any potential troublesome trades / activities?
Another interesting thing which was missed is that the VIX actually rose to its highest level in 12 months on Friday.
While I'm sure it certainly doesn't help (the traders) that regulators are being nosy and digging into the activities of some of the big guns on Wall Street, maybe it is just a sign that there is some downside risk in the near-term?
The advice he gets is very simple: "It doesn't matter whether it is a sneak attack, you walk up to the biggest bully on the playground and you kick him as hard as you can in the nuts in the most public place. If he drops, your year has been made and you will be the hero of the school".
Judging from the fun and games in the US on Friday, I reckon somebody over at the SEC has adopted a similar kind of strategy to "right-size" banking giant Goldman Sachs.
Much like it doesn't matter whether or not the bully has psychological issues or problems at home, I don't think that the SEC is all that concerned about the merits of their case. They've snuck up on an industry giant which believes it is untouchable and possibly fired the first salvo in a carpet bombing exercise aimed at the investment banking industry.
Will this even dent Goldman Sachs? Probably not - the guys that work there are too clever to even blink.
But for the rest of the industry, a very clear message has been sent.
The start of a genuine correction?
I'm undecided on whether or not markets are expensive and I think it is folly to try and play that game. Personally I probably wouldn't be buying too many shares right now if I was looking to make money in the next 6 to 12 months.
In fact if I had to hazard a guess this little assault on GS could be maybe the right kind of message to market participants that it is now time to step back and reassess the landscape.
How many compliance managers at the various investment banks and brokerages are scurrying around this weekend trying to double check that their systems are in place? How many are going to be advising their traders that the regulators are being a little nosier than expected and maybe they need to pull in any potential troublesome trades / activities?
Another interesting thing which was missed is that the VIX actually rose to its highest level in 12 months on Friday.
While I'm sure it certainly doesn't help (the traders) that regulators are being nosy and digging into the activities of some of the big guns on Wall Street, maybe it is just a sign that there is some downside risk in the near-term?
Tuesday, March 30, 2010
Time to go defensive?
It is interesting to look at some of the flash points coming up around the world over the last few weeks:
- Bombs in Russia (I think there is more to this story to come)
- Riots in India
- Problems in Thailand
- Violence in Mexico
- Some protectionist stuff happening in the US / China row
- Greece and Portugal debt problems won't go away
Slash your CFD trading costs by up to 80%
I saw this on the Rival Financial Services blog. It might be of interest to anybody trading CFD's.
We picked up this message from local derivatives trading firm Global Trader and thought it might be of interest to our readers:
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Cost erodes performance and cost creates barriers to entry. Well the costs are coming down.
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** All you’ll need to do is show us proof of your current trading rate and we’ll match it less 5bps
Sunday, March 28, 2010
Day Trading is for suckers
There is a really interesting piece on the Business Insider website written by Henry Blodget which talks about why day traders can never win.
You can read the full article here but here for me was a key quote which needs to be borne in mind:
Most Wall Street traders have skills, information, and tools that day-traders can only dream of. Trading is a zero-sum game: Market moves aside, every dollar won by one trader comes out of the pocket of another trader. Day traders competing against Wall Streeters is the equivalent of a college football team (or Pee Wee team, depending on the day-trader's skill) competing against a pro team. Is it possible to win? Yes. But it's highly unlikely (1 in 100). Wall Street's winnings do have to come from somewhere, though, so Wall Street thanks the day traders for playing.
Blodget's conclusion is right - if you are planning to day trade your way to enormous wealth then think again - you're probably chasing a pie in the sky dream....
That's probably not what you want to hear if you are visiting a day-traders blog but let's cut the bullshit - making trading wealth is incredibly hard.
Part of the problem I think is that too many private day traders want to cast themselves as institutional traders.
If you do believe you have what it takes then consider these steps:
You can read the full article here but here for me was a key quote which needs to be borne in mind:
Most Wall Street traders have skills, information, and tools that day-traders can only dream of. Trading is a zero-sum game: Market moves aside, every dollar won by one trader comes out of the pocket of another trader. Day traders competing against Wall Streeters is the equivalent of a college football team (or Pee Wee team, depending on the day-trader's skill) competing against a pro team. Is it possible to win? Yes. But it's highly unlikely (1 in 100). Wall Street's winnings do have to come from somewhere, though, so Wall Street thanks the day traders for playing.
Blodget's conclusion is right - if you are planning to day trade your way to enormous wealth then think again - you're probably chasing a pie in the sky dream....
That's probably not what you want to hear if you are visiting a day-traders blog but let's cut the bullshit - making trading wealth is incredibly hard.
Part of the problem I think is that too many private day traders want to cast themselves as institutional traders.
- They sit with multiple screens and charting systems open. They want to talk about resistance, break-outs and the double nipple formation.
- They feel they have to be "in" or "on" the market the whole time
- If they are not moving money they are not really "trading"
If you do believe you have what it takes then consider these steps:
- There is nothing wrong with buying a reliable share portfolio which includes dividend paying, cash generative shares with high returns on equity - profiting from gains made here is just as much "day-trading" as trading in and out of the global currency market every 10 minutes.
- If you are going to trade regularly identify one or two core themes and run with them. Don't try and chase every market and every instrument because that is what the news is doing.
- The trend is your friend. It is the oldest trading mantra and for good reason. We all want to call "the top" or "the bottom" of a market but you will go broke going against the trend.
- Use a bit of common sense - trading is made out to be more complicated than it really has to be. Buy low - sell high does not mean buying a stock or currency now because it was 1% lower than it was yesterday
- If you are waking up in a cold sweat at two in the morning and rushing to check your portfolio or positions then you are over-commited.
Tuesday, March 9, 2010
I'm not totally sure about this whole Twitter thing but I am reliably informed that I must tell people where they can find me on Twitter...
... so here goes.
DRUM ROLL PLEASE
...
If you want to find me on micro-blogging service then you can find me at:
http://twitter.com/liquidtraderza
.... there I said it!
DRUM ROLL PLEASE
...
If you want to find me on micro-blogging service then you can find me at:
http://twitter.com/liquidtraderza
.... there I said it!
This is probably very speculative
... and definately not for the widows and orphans fund but did anybody notice that SENS announcement from IPSA late in the day?
Here it is in a nutshell:
IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that on 5 March 2010 the Company entered into an agreement with RAB Energy Fund Limited and certain other investors (together the "Loan Note Holders") to issue GBP650,000 of unsecured loan notes (the "Loan Notes") to the Loan Note Holders.
On the same day, the Company also entered into an agreement with Standard Bank PLC ("Standard Bank") and TurboCare S.p.A. ("TurboCare") regarding the marketing of the Company`s gas turbines, which also provides a standstill arrangement
regarding funds due to both these parties.
Now IPSA's problems with Eskom have been well documented - they've been royally screwed over and now suddenly Eskom has realised that perhaps independant power producers (IPPs) may actually serve a purpose.
The tone of the IPSA SENS announcement is pretty downbeat - but GBP650000 of unsecured financing is a sizeable chunk of change for a business which should be technically failing.
For me what is interesting is that since the start of the year the share has lost 17% and is now trading around 140c. If you go back to when the shit really hit the fan at Eskom, this was priced around R2 a share... Logically the case for IPPs has been reinforced by this whole Nersa tariffs issue.
As I said - not for the widows and orphans but definately something which could be worth a cheap and nasty punt?
Here it is in a nutshell:
IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that on 5 March 2010 the Company entered into an agreement with RAB Energy Fund Limited and certain other investors (together the "Loan Note Holders") to issue GBP650,000 of unsecured loan notes (the "Loan Notes") to the Loan Note Holders.
On the same day, the Company also entered into an agreement with Standard Bank PLC ("Standard Bank") and TurboCare S.p.A. ("TurboCare") regarding the marketing of the Company`s gas turbines, which also provides a standstill arrangement
regarding funds due to both these parties.
Now IPSA's problems with Eskom have been well documented - they've been royally screwed over and now suddenly Eskom has realised that perhaps independant power producers (IPPs) may actually serve a purpose.
The tone of the IPSA SENS announcement is pretty downbeat - but GBP650000 of unsecured financing is a sizeable chunk of change for a business which should be technically failing.
For me what is interesting is that since the start of the year the share has lost 17% and is now trading around 140c. If you go back to when the shit really hit the fan at Eskom, this was priced around R2 a share... Logically the case for IPPs has been reinforced by this whole Nersa tariffs issue.
As I said - not for the widows and orphans but definately something which could be worth a cheap and nasty punt?
Tuesday, March 2, 2010
Slight change in strategy
After the Euro sunk against the dollar yesterday I slipped out of that trade and changed to long dollar short Swiss franc.
Seems to be playing nicely so far - will keep an eye on it and let's see where this takes us.
Seems to be playing nicely so far - will keep an eye on it and let's see where this takes us.
Sunday, February 28, 2010
I probably don't understand society but...
... we wake up on Monday after a massive earthquake has hit a major commodity producer like Chile and markets are going up?!
Me - I am largely indifferent but it says a lot about society doesn't it. My only open position at the moment is long the US dollar versus the Euro and some small long-term equity positions and that's about it.
This is a massive earthquake and there have been 90+ aftershocks to rock Chile all between 5.0 and 7 on the Richter scale. The swells off the coast of Hawaii are rising again and action in the Pacific on Friday was felt in Australia, New Zealand, Japan, Californaia (which you can short the shit out of till it sinks into the sea), Chile and Hawaii.
If you're interested in currencies, there is a good story on Bloomberg this morning predicting that pound sterling could drop by as much as 30% against the US dollar.
“Alarm bells were ringing in Greece for a long time and when it happened, it happened very quickly,” Haig Bathgate, head of strategy at Turcan Connell, said at the company’s offices in the Scottish capital. “The U.K. is in a similar predicament. It could be hit very hard.”
You can trade Forex products here if you want to get in on the action.
With any luck the Poms also sinking into the sea along with California and we're saved from their painful whinging and Wayne Bridge acting all sanctimonious about his woman being groped by a team-mate.
Anyway time to sit back and watch Hawaii get washed away...
Me - I am largely indifferent but it says a lot about society doesn't it. My only open position at the moment is long the US dollar versus the Euro and some small long-term equity positions and that's about it.
This is a massive earthquake and there have been 90+ aftershocks to rock Chile all between 5.0 and 7 on the Richter scale. The swells off the coast of Hawaii are rising again and action in the Pacific on Friday was felt in Australia, New Zealand, Japan, Californaia (which you can short the shit out of till it sinks into the sea), Chile and Hawaii.
If you're interested in currencies, there is a good story on Bloomberg this morning predicting that pound sterling could drop by as much as 30% against the US dollar.
“Alarm bells were ringing in Greece for a long time and when it happened, it happened very quickly,” Haig Bathgate, head of strategy at Turcan Connell, said at the company’s offices in the Scottish capital. “The U.K. is in a similar predicament. It could be hit very hard.”
You can trade Forex products here if you want to get in on the action.
With any luck the Poms also sinking into the sea along with California and we're saved from their painful whinging and Wayne Bridge acting all sanctimonious about his woman being groped by a team-mate.
Anyway time to sit back and watch Hawaii get washed away...
Sunday, February 21, 2010
Contracts for Difference
CFD(Contracts for difference) trading is about ‘margin trading’, or buying not ownership of stock but ‘trading rights’ on the stock by putting down a fraction of the price (i.e.,10%) holding it for short term, hours, days or weeks, and selling it at a profit when the market rises.
Easy? Yes and no. The cautionary is that like all speculation with stocks and shares, only money that you ‘can afford to lose’ should be used. Having said that, with the right systems, good nerves and attention, it is very feasible to make a lot of money. A CFD being a ‘derivative’ of a stock holding is a separate entity from Forex which can also be traded in the same manner but has some regulatory differences.
“For example, A client wants to purchase £10,000 worth of HSBC shares, the margin requirement would be only £1,000. If HSBC share value increases to £10,500 a £500 profit on the deal would equate to just 5% return if you traded the shares outright; compared to a return of 50% on a CFD.” Interested? You should be.
Get started now with a free ‘demo’ account from agmtrader.com .
Sunday, February 14, 2010
Tactical asset allocation
Over the last few weeks I have been thinking quite a lot about this concept of "tactical asset allocation" and specifically how it impacts me as a South African trader / investor...
So here's my issue - over the last decade it has been pretty much money for jam if you have been long SA equities. The dividends have been good, there has been capital appreciation and believe it or not, the rand has been overall a quality currency to hold these assets in.
Shock, gasp, horror - and here everybody was thinking that South Africa was heading down the drain at a rate of knots...
So it has been easy - you buy SATRIX or RAFI or you pretty much throw darts at the newspaper and provided you don't hit the Alt-X you've made a pretty decent return.
But as cliched as it may sound, the world is a very different place now...
Are you going to get away with just tracking an index over the next few years? Can you just buy SATRIX, RAFI, MSCI World etc?
I amo not that sure that you will.
Two reasons:
Pfizer seems to be a stock that a lot of asset managers are talking up and it will suit my example well. I want to buy Pfizer - I have two options - buy it off my own bat through an asset manager geared for the international markets or buy into a fund which is supposedly "tactical" and will look for more opportunities like this.
I don't like the fund idea so I need to fin a stockbroker who can get me into international markets and then work in my tight forex regulations. But that takes a mindshift from me - I can't just limit myself to the SA market anymore.
I need to be aware of a brewery in Zambia or a Russian oil firm or a Mexican tequila plant and that takes some doing....
Will need to think about this a bit but would welcome any thoughts on
A) Will tactical stock picks outperform index tracking?
B) How important is the international market to local investors?
Let me know.
So here's my issue - over the last decade it has been pretty much money for jam if you have been long SA equities. The dividends have been good, there has been capital appreciation and believe it or not, the rand has been overall a quality currency to hold these assets in.
Shock, gasp, horror - and here everybody was thinking that South Africa was heading down the drain at a rate of knots...
So it has been easy - you buy SATRIX or RAFI or you pretty much throw darts at the newspaper and provided you don't hit the Alt-X you've made a pretty decent return.
But as cliched as it may sound, the world is a very different place now...
Are you going to get away with just tracking an index over the next few years? Can you just buy SATRIX, RAFI, MSCI World etc?
I amo not that sure that you will.
Two reasons:
- Global economy is recovering - we're not in a global economic bull market - certain segments will heat up faster than others
- South Africa has (at least from an equity perspective) appeared to catch up with the rest of the world
Pfizer seems to be a stock that a lot of asset managers are talking up and it will suit my example well. I want to buy Pfizer - I have two options - buy it off my own bat through an asset manager geared for the international markets or buy into a fund which is supposedly "tactical" and will look for more opportunities like this.
I don't like the fund idea so I need to fin a stockbroker who can get me into international markets and then work in my tight forex regulations. But that takes a mindshift from me - I can't just limit myself to the SA market anymore.
I need to be aware of a brewery in Zambia or a Russian oil firm or a Mexican tequila plant and that takes some doing....
Will need to think about this a bit but would welcome any thoughts on
A) Will tactical stock picks outperform index tracking?
B) How important is the international market to local investors?
Let me know.
Tuesday, January 26, 2010
The US dollar
Out of curiosity are you still hanging on to your US dollars?
I see that there are media reports of North and South Korea trading pleasantries over a couple of artillery cannons this morning. Now THAT will do wonders for the global economy if we have both the Middle East and the Korean peninsula trying to obliterate eachother now won't it.
Anyway just a humble observation early in the morning and seeing as PIMCO were in the SA media earlier this week talking about how the US dollar was set to bounce back specifically against the pound and the euro, I thought it might be time to start looking at a few for the portfolio.
I see that there are media reports of North and South Korea trading pleasantries over a couple of artillery cannons this morning. Now THAT will do wonders for the global economy if we have both the Middle East and the Korean peninsula trying to obliterate eachother now won't it.
Anyway just a humble observation early in the morning and seeing as PIMCO were in the SA media earlier this week talking about how the US dollar was set to bounce back specifically against the pound and the euro, I thought it might be time to start looking at a few for the portfolio.
Thursday, January 21, 2010
Geopolitics
I always find it difficult to take geopolitics all that serious - especially when it is looking ahead over the next decade, but I see that STRATFOR have made their forecasts to 2010 with some very interesting views.
I don't agree with all of them, but I think its good to throw out the ideas into the investor domain for debate.
Their predictions:
I'm indifferent to Iran as a flashpoint. I was surprised to learn their economy is as big as it is - GDP of around $850m. That's big if one considers the problems it has. America doesnt have the enthusiasm it once had to pick fights and I wouldn't be surprised if Iran actually thrives on sheer pigheadedness.
Labour shortages I don't agree on. I actually think that while the world is going through a phase of upgrading its labour force and emphasising quality of work /loving its labour force. There might be a little less mechanisation than people think and while there might actually be wage deflation, but maybe more flexibility in the working day.
China - disagree completely and I also think that Japan will bounce back. Don't worry I'm not one of those people who believes that China is a bulletproof story - but let's be honest in 10 years China will just be starting to develop a property market, retail banking system and empowering its consumers - its not all going to fall on its head in the next 10 years.
Anyway food for thought always aims to stimulate some debate - your thoughts?
I don't agree with all of them, but I think its good to throw out the ideas into the investor domain for debate.
Their predictions:
- Egypt and Turkey will become regional superpowers
- US-jihadist war will have subsided with Iran pacified by either military action, isolation or political agreement
- Worldwide labour shortages and huge demand for immigrant labour
- China will have suffered an economic meltdown leaving the US as the lone world superpower
I'm indifferent to Iran as a flashpoint. I was surprised to learn their economy is as big as it is - GDP of around $850m. That's big if one considers the problems it has. America doesnt have the enthusiasm it once had to pick fights and I wouldn't be surprised if Iran actually thrives on sheer pigheadedness.
Labour shortages I don't agree on. I actually think that while the world is going through a phase of upgrading its labour force and emphasising quality of work /loving its labour force. There might be a little less mechanisation than people think and while there might actually be wage deflation, but maybe more flexibility in the working day.
China - disagree completely and I also think that Japan will bounce back. Don't worry I'm not one of those people who believes that China is a bulletproof story - but let's be honest in 10 years China will just be starting to develop a property market, retail banking system and empowering its consumers - its not all going to fall on its head in the next 10 years.
Anyway food for thought always aims to stimulate some debate - your thoughts?
Tuesday, January 19, 2010
6.5% per annum?!
So I've been surfing around the financial news sites and it would appear that Old Mutual had a press conference today, because they seem to have cracked a couple of mentions
Anyway the gist of the tune being rolled out by these guys is that investors need to rein in their expectations and accept that investment returns are likely to be lower than what they've had over the last decade or so.
Numbers of between 6 and 7% have been rolled around which I'm assuming are real returns after inflation.
Let's say you're getting 3% dividend from that, that means you're not really making a helluva lot in capital gains... which I guess begs the question whether you really want to be invested in the equity market for this decade.
Anyway the thought that jumped out at me is that while there are a lot of points about being made about traditional asset classes and how they are likely to perform very little is being said about things like private equity, venture capital or even unlisted investments.
For those looking for something a bit more risque in terms of their investments and not prepared to sit back on an index tracking performance, their might be some value in looking at some of the following for their portfolios:
Brait:
JSE listed private equity play Brait has been busy in recent months and they've signed up a couple of smaller deals for their funds. While I probably wouldn't want to put money in one of their funds, I might be interested in putting some money into the holding company which targets a long-term return on equity of above 25%. Worst case you get some decent dividends if you are prepared to buy into the business through the cycle.
Reinet
The JSE listed "private equity" player is effectively a proxy for the British American Tobacco shareprice at the moment. But there is no question that they have a bit of money on the sidelines which they are looking to invest.
Paladin Capital
I've touched on Paladin in previous posts so not going to do much else to add here.
Venfin
Is now de-listed but if I remember correctly you can still buy their shares OTC. Also gives you a bit of access to high profile tech.
---------
Nobody can really see well into the future but I would suggest on historical evidence and data on the real economy, we're entering a period of consolidation. Those who are likely to score could be part of the "smart money" who are making investments in higher growth businesses now in the hope that they can exit them when the price is right.
Interesting punt
This is really high risk and not worth risking your mothers pension on, but those with the flair for something different should look at that rights issue out of Nigerian oil and gas firm Oando (JSE:OAO). I can understand the whole issue about doing business with Nigerians but I think they came to the JSE for the right reasons and this rights issue could free up some of the float - I reckon it could be worth a punt.
I am going to write a bit more on Oando in my next post but as I say - something different...
Anyway the gist of the tune being rolled out by these guys is that investors need to rein in their expectations and accept that investment returns are likely to be lower than what they've had over the last decade or so.
Numbers of between 6 and 7% have been rolled around which I'm assuming are real returns after inflation.
Let's say you're getting 3% dividend from that, that means you're not really making a helluva lot in capital gains... which I guess begs the question whether you really want to be invested in the equity market for this decade.
Anyway the thought that jumped out at me is that while there are a lot of points about being made about traditional asset classes and how they are likely to perform very little is being said about things like private equity, venture capital or even unlisted investments.
For those looking for something a bit more risque in terms of their investments and not prepared to sit back on an index tracking performance, their might be some value in looking at some of the following for their portfolios:
Brait:
JSE listed private equity play Brait has been busy in recent months and they've signed up a couple of smaller deals for their funds. While I probably wouldn't want to put money in one of their funds, I might be interested in putting some money into the holding company which targets a long-term return on equity of above 25%. Worst case you get some decent dividends if you are prepared to buy into the business through the cycle.
Reinet
The JSE listed "private equity" player is effectively a proxy for the British American Tobacco shareprice at the moment. But there is no question that they have a bit of money on the sidelines which they are looking to invest.
Paladin Capital
I've touched on Paladin in previous posts so not going to do much else to add here.
Venfin
Is now de-listed but if I remember correctly you can still buy their shares OTC. Also gives you a bit of access to high profile tech.
---------
Nobody can really see well into the future but I would suggest on historical evidence and data on the real economy, we're entering a period of consolidation. Those who are likely to score could be part of the "smart money" who are making investments in higher growth businesses now in the hope that they can exit them when the price is right.
Interesting punt
This is really high risk and not worth risking your mothers pension on, but those with the flair for something different should look at that rights issue out of Nigerian oil and gas firm Oando (JSE:OAO). I can understand the whole issue about doing business with Nigerians but I think they came to the JSE for the right reasons and this rights issue could free up some of the float - I reckon it could be worth a punt.
I am going to write a bit more on Oando in my next post but as I say - something different...
Friday, January 15, 2010
Obscure postings
Posting late at night sometimes I don't communicate that well. I started mumbling something about small cap shares and then found bed calling so let me try again.
I think there may be some merit in certain of the JSE listed small cap shares in 2010 and here are a list of stocks which I believe should be considered. Some are great businesses with a good track record and some are a little higher risk.
AdvTech
South Africa's leading private education provider, AdvTech is one of those stocks which could be classified as defensive. Parents will always want to equip their kids with the best opportunities. There is a massive shortage in quality education providers in the country and AdvTech gives you one way of participating in it.
Historical PE multiple of 12 means its not cheap but sometimes you pay a little extra for a bit of quality
CIC Holdings
This is a nice little company which has re-rated significantly since I tipped it at 80c last year. Presently trading at around 130c a share it still only sits on an historical PE of 5 times earnings. Its a company that not a lot of people know much about but it owns quite a lot of agencies in growth markets in Africa. It's partly owned by Paladin Capital (PSGs investment arm). A positive for it is first mover advantage but a negative in that it is an agency type business and does not have a lot of its own Intellectual Property. Still might have some legs though.
Zeder
Jim Rogers is still mumbling on about farming being all the rage in the coming years and I can buy that story. Zeder, the PSG agri-ops business has been very aggressive in the last 12 months sorting out and growing its portfolio.
Paladin Capital
This is your alternative in the education space (but with far less concentration). Paladin - the PSG investment arm - is in the process of rolling out and expanding its network of Curro schools. These guys have been tipped as being super aggressive so and probably not the nicest management around but they'll get the job done.
Pallinghurst
This is the only resource play which jumps out at me but I am useless at judging the sector so don't go on my word. I was speaking to one of the resource guys yesterday and his thinking is that it will either be a 10-bagger or it will go nowhere fast.
Beige Holdings
I am probably going to take much flak for this one but this is a company I really like. Its got much too much paper in issue but its not the worst business around by the stretch of anyones imagination. It has quite a lot of negative legacy issues which its battling to shake off. However it has a major competitive advantage in terms of that new factory which it has put together in Chloorkop plus that factory in Durban (Quality Products I think its called). They can interchange product lines extremely quickly meaning they can shift up or down depending on demand. Paper is a huge issue though. Directors have also not been shy to buy their own stock.
Glenrand MIB
Buying a share in an insurance broking operation in the current economic climate seems to be madness. But that hasn't stopped the big-wigs at GlenMib putting their money down on a regular basis. Something is potting here and a historical PE of 9 considering the problems they had last year may be a sign that better earnings are coming through.
If anything else jumps out at me, I'll post it below this thread but it might be something to look at.
I think there may be some merit in certain of the JSE listed small cap shares in 2010 and here are a list of stocks which I believe should be considered. Some are great businesses with a good track record and some are a little higher risk.
AdvTech
South Africa's leading private education provider, AdvTech is one of those stocks which could be classified as defensive. Parents will always want to equip their kids with the best opportunities. There is a massive shortage in quality education providers in the country and AdvTech gives you one way of participating in it.
Historical PE multiple of 12 means its not cheap but sometimes you pay a little extra for a bit of quality
CIC Holdings
This is a nice little company which has re-rated significantly since I tipped it at 80c last year. Presently trading at around 130c a share it still only sits on an historical PE of 5 times earnings. Its a company that not a lot of people know much about but it owns quite a lot of agencies in growth markets in Africa. It's partly owned by Paladin Capital (PSGs investment arm). A positive for it is first mover advantage but a negative in that it is an agency type business and does not have a lot of its own Intellectual Property. Still might have some legs though.
Zeder
Jim Rogers is still mumbling on about farming being all the rage in the coming years and I can buy that story. Zeder, the PSG agri-ops business has been very aggressive in the last 12 months sorting out and growing its portfolio.
Paladin Capital
This is your alternative in the education space (but with far less concentration). Paladin - the PSG investment arm - is in the process of rolling out and expanding its network of Curro schools. These guys have been tipped as being super aggressive so and probably not the nicest management around but they'll get the job done.
Pallinghurst
This is the only resource play which jumps out at me but I am useless at judging the sector so don't go on my word. I was speaking to one of the resource guys yesterday and his thinking is that it will either be a 10-bagger or it will go nowhere fast.
Beige Holdings
I am probably going to take much flak for this one but this is a company I really like. Its got much too much paper in issue but its not the worst business around by the stretch of anyones imagination. It has quite a lot of negative legacy issues which its battling to shake off. However it has a major competitive advantage in terms of that new factory which it has put together in Chloorkop plus that factory in Durban (Quality Products I think its called). They can interchange product lines extremely quickly meaning they can shift up or down depending on demand. Paper is a huge issue though. Directors have also not been shy to buy their own stock.
Glenrand MIB
Buying a share in an insurance broking operation in the current economic climate seems to be madness. But that hasn't stopped the big-wigs at GlenMib putting their money down on a regular basis. Something is potting here and a historical PE of 9 considering the problems they had last year may be a sign that better earnings are coming through.
If anything else jumps out at me, I'll post it below this thread but it might be something to look at.
Thursday, January 14, 2010
No recovery soon?
Again a few random musings which shows a very cloudy outlook for the real economy over the next few months.
Geopolitics
Politics is always tough to read and more often than not geopolitical "intelligence" is a big "what-if" game.
However there appear to be a few storm clouds brewing:
Locally I have had reports from one of the big media houses and two of the big financial services firms that there is another round of job cuts coming.
Small business confidence ticking up?
Having said that there are a lot of negatives in the economy, there seems to be some anecdotal evidence that some of the smaller businesses who were operating on a low cost base are bouncing back quite nicely.
Those who survived the carnage of last year appear to be consolidating.
So where does that leave us?
Disposable income is tight and markets don't look like they are going anywhere fast. Maybe there are some opportunities for some under-rated small-caps to shine through?
Things that look like they bear some consideration:
Geopolitics
Politics is always tough to read and more often than not geopolitical "intelligence" is a big "what-if" game.
However there appear to be a few storm clouds brewing:
- The US over the last few weeks has found itself in a constant state of alert for terrorist threats both at home, in far-flung places like Yemen and of course in the Middle East. Whether there is a serious threat or not to the US the emotional drain on the American psyche has to be there
- Just tonight a Texas nuclear assembly plant was shutdown for securit reasons.
- A top Iranian nuclear academic was recently assasinated. Neither Israel nor the US are claiming responsibility but Iran is making some unhappy noises and this looks like it is rapidly coming to head considering the US deadlines which don't appear to have been enforced.
- More fuel is being thrown on this fire (excuse the bad pun) after Swiss commodity firm Glencore reportedly stopped selling gasoline to Iran. Something has to crack here and it looks like the US is on a colission course with Iran.
- Debt issues continue to plague Iceland, Ireland, Argentina and Greece as well as a number of other emerging markets which look shaky.
- US Centre for Disease Control reckons as many as 81 million people have been infected with H1N1 swine flu, 16000 deaths and 360000 hospitalisations.
- Lots of posturing between China and Google which I'm surprised hasn't really been picked up by South African media.
- Initial stimulus packages appear to have had only a short-term impact on the economy
- Job cuts both locally and abroad continue to mount. The pace may be slowing but each month there are a few more people joining the unemployed lines
Locally I have had reports from one of the big media houses and two of the big financial services firms that there is another round of job cuts coming.
Small business confidence ticking up?
Having said that there are a lot of negatives in the economy, there seems to be some anecdotal evidence that some of the smaller businesses who were operating on a low cost base are bouncing back quite nicely.
Those who survived the carnage of last year appear to be consolidating.
So where does that leave us?
Disposable income is tight and markets don't look like they are going anywhere fast. Maybe there are some opportunities for some under-rated small-caps to shine through?
Things that look like they bear some consideration:
- CIC Holdings - quality branded goods licenses
- Advtech - Education
- Paladin - Education and financial services
Tuesday, January 5, 2010
Tough market
Bloody hell it is a tough market at the moment. I'm personally getting slaughtered with whatever strategy I employ, except good old fashioned "buy and hold".... maybe there is a lesson in that?
Anyways there is not a lot that looks particularly exciting to me at the moment - markets have continued to rally into the new year but there is still pain being felt in the US consumer with insolvencies / bankruptcies still high.
One stock which appears to have gotten a lot of coverage today in the press - (pump and dump?!?) is local coal producer Exxaro. In the South African context it is obviously a sensible play as they are going to be the major supplier of coal to Eskom when it starts to ramp up its production levels and expansion program.
Seems like a far cheaper play (on historical earnings) than something like Anglo American and far more targeted in terms of specific resource.
One thing which did jump out at me today - and I saw it was covered on the Miningmx website - is a report out of Stratfor. The research firm has its detractors and I have called them war-mongerers before - but they certainly do raise a couple of interesting points.
1. Russia continuing to spread its influence into neighbouring states
2. China going to continue reckless lending practices to sustain its growth
3. A "cold war" of sorts between Angola and South Africa
4. A crisis in Iran is now inevitable and all the big players are jockeying for positions
I don't want to be the "Chicken little" out there but 1 and 4 worry me quite a lot. I am just not sure what the fallout is and how to tackle it.
On my personal account I've been moving quite quickly into cash. I have kept my preference share portfolio but that's about it.
Anyways there is not a lot that looks particularly exciting to me at the moment - markets have continued to rally into the new year but there is still pain being felt in the US consumer with insolvencies / bankruptcies still high.
One stock which appears to have gotten a lot of coverage today in the press - (pump and dump?!?) is local coal producer Exxaro. In the South African context it is obviously a sensible play as they are going to be the major supplier of coal to Eskom when it starts to ramp up its production levels and expansion program.
Seems like a far cheaper play (on historical earnings) than something like Anglo American and far more targeted in terms of specific resource.
One thing which did jump out at me today - and I saw it was covered on the Miningmx website - is a report out of Stratfor. The research firm has its detractors and I have called them war-mongerers before - but they certainly do raise a couple of interesting points.
1. Russia continuing to spread its influence into neighbouring states
2. China going to continue reckless lending practices to sustain its growth
3. A "cold war" of sorts between Angola and South Africa
4. A crisis in Iran is now inevitable and all the big players are jockeying for positions
I don't want to be the "Chicken little" out there but 1 and 4 worry me quite a lot. I am just not sure what the fallout is and how to tackle it.
On my personal account I've been moving quite quickly into cash. I have kept my preference share portfolio but that's about it.
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