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
Showing posts with label Sasol. Show all posts
Showing posts with label Sasol. Show all posts
Monday, December 27, 2010
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.
Saturday, November 28, 2009
Ouch
Well that Dollar / Yen trade was an almighty screw up and I am suitably poorer for my efforts.
I still think in the long-term (3 to 4 months) the trade is the right one but having been stopped out twice in the last few weeks I've had my fill of this particular currency play.
That doesn't mean I've moved my attention away from the currency market and I've used some of these new Standard Bank Currency Reference Warrants to go long the US Dollar against the South African Rand.
One of the fallouts I would expect to see courtesy of Dubai is some money being pulled out of emerging markets and parked off in in things like the US Dollar - particularly as Christmas rolls around.
If one looks at the US dollar call (USDSCA) there seem to be quite a lot of people taking bets that the rand is going to weaken from these levels. Of the last 7 trading days 4 have had trade in excess of 2.3m which is not bad for an instrument which is only 2 weeks old.
I also bailed on my Sasol call after my stop-loss was breached - the warrant was decaying too fast and my sense is that investors are not going to rush to bid up emerging market shares over the next 30 days.
I still think in the long-term (3 to 4 months) the trade is the right one but having been stopped out twice in the last few weeks I've had my fill of this particular currency play.
That doesn't mean I've moved my attention away from the currency market and I've used some of these new Standard Bank Currency Reference Warrants to go long the US Dollar against the South African Rand.
One of the fallouts I would expect to see courtesy of Dubai is some money being pulled out of emerging markets and parked off in in things like the US Dollar - particularly as Christmas rolls around.
If one looks at the US dollar call (USDSCA) there seem to be quite a lot of people taking bets that the rand is going to weaken from these levels. Of the last 7 trading days 4 have had trade in excess of 2.3m which is not bad for an instrument which is only 2 weeks old.
I also bailed on my Sasol call after my stop-loss was breached - the warrant was decaying too fast and my sense is that investors are not going to rush to bid up emerging market shares over the next 30 days.
Friday, November 13, 2009
A whole lot of nothing
A week which opened up a little nervous but ultimately ended green.
The JSE Top40 (J200) opened at 23730 and finished at 24075 helped by a bit of a bounce in banks and industrials (SAB and RCH). For the rest it was a case of going nowhere fast.
Portfolio changes:
Sasol seems to have built a nice base around the R290 mark (Friday close as well as warrant strike). IMP on the other hand has broken below R170 (the warrant strike) and coupled with the safety issues and the drop off in production - it maybe needs to do a few things right to tempt me back.
Having said that trade in both warrants was brisk over the week and for investors with a bit of risk appetite, they both seem to be an option.
The JSE Top40 (J200) opened at 23730 and finished at 24075 helped by a bit of a bounce in banks and industrials (SAB and RCH). For the rest it was a case of going nowhere fast.
Portfolio changes:
- Sold out of my long IMP call on Wednesday (IMPSBC) for a marginal profit - time decay was starting to bite into the warrant despite being in the money
- Switched into a long on SOL (again SOLSBG)
Sasol seems to have built a nice base around the R290 mark (Friday close as well as warrant strike). IMP on the other hand has broken below R170 (the warrant strike) and coupled with the safety issues and the drop off in production - it maybe needs to do a few things right to tempt me back.
Having said that trade in both warrants was brisk over the week and for investors with a bit of risk appetite, they both seem to be an option.
Friday, October 16, 2009
Saturday morning review
Two quick themes I want to look at again on this bright and cheerful Saturday morning
First up is the power of dividends and the old fashioned "buy and hold"
It has many detractors as a way to wealth but I was sitting here this morning watching the dividend notifications flow into the various portfolios we old and the passive portfolios holding the likes of Sasol, Discovery and FirstRand were nicely topped up this morning.
It is a theme I have repeated a couple of times - if you are getting into investing or simply trying to accumulate a nest-egg, then good old fashioned accumulation of good quality stocks with good dividend track records is hard to beat over the long run.
I was having a look at our old family trust account and it always amazes me in terms of return for us. It comprises 8 core stocks (ATN, PWK, SOL, NPN, MTN, BTI, REM, BVT and SBK) and every quarter I check back to it and I find that it has generated another R10000 in passive dividends.
I use R10k as a measure rather than percentage returns because for that portfolio, after it reaches R10k it will then begin to look at re-investing these funds.
Powerful stuff not to be understimated despite all the trading mumbo-jumpo that goes on.
Sasol and Impala
I exited my long position on Sasol yesterday on the back of a nice run up in the share and saw a handy profit. Could it go up more? Probably - but that's why we old the underlying shares in the portfolio to benefit from that upside. The leveraged position was there to give our portfolios a little something extra.
Anyone following my Twitter feed will know that after cashing out of Sasol I went long Impala Platinum after it was down about 2% on the day... didn't work out ideally after it got smacked down more than 4% in total but I remain long.
IMP had a very scratchy September with (correct me if I am wrong) but I think they had 3 fatalities - something which is being focused on by a lot by the industry and of course the media. But if you are pragmatic about these things then you also have to recognise that it re-focuses management on operational problems which in turn (one hopes) flows through to a better run platinum business.
I was reading some research out RMB Morgan Stanley released on Friday and this comment by one of their analysts jumped out at me:
"Marking to market, Implats looks more robust: Applying spot values for the rand, PGM and base metals, we estimate that AngloPlat’s NPV would fall 27% to R494, while Implats would fall by 24% to R174. Alternatively, we assess that AngloPlat is pricing in platinum of USD1520/oz or a rand of 8.15/USD. Implats appears more robust, with its NPV pricing in the current spot (R7.40/USD, platinum USD1345.)"
In other words, there is next to no upside being priced into IMP at the moment... which one would assume means its ripe for those cheesy brokers and analysts to start pumping up their "overweight" and "buy" recommendations.
Which brings me to what I think could be drivers for a focusing in on the platinum sector in the next 3 months which will boost the IMP share price:
First up is the power of dividends and the old fashioned "buy and hold"
It has many detractors as a way to wealth but I was sitting here this morning watching the dividend notifications flow into the various portfolios we old and the passive portfolios holding the likes of Sasol, Discovery and FirstRand were nicely topped up this morning.
It is a theme I have repeated a couple of times - if you are getting into investing or simply trying to accumulate a nest-egg, then good old fashioned accumulation of good quality stocks with good dividend track records is hard to beat over the long run.
I was having a look at our old family trust account and it always amazes me in terms of return for us. It comprises 8 core stocks (ATN, PWK, SOL, NPN, MTN, BTI, REM, BVT and SBK) and every quarter I check back to it and I find that it has generated another R10000 in passive dividends.
I use R10k as a measure rather than percentage returns because for that portfolio, after it reaches R10k it will then begin to look at re-investing these funds.
Powerful stuff not to be understimated despite all the trading mumbo-jumpo that goes on.
Sasol and Impala
I exited my long position on Sasol yesterday on the back of a nice run up in the share and saw a handy profit. Could it go up more? Probably - but that's why we old the underlying shares in the portfolio to benefit from that upside. The leveraged position was there to give our portfolios a little something extra.
Anyone following my Twitter feed will know that after cashing out of Sasol I went long Impala Platinum after it was down about 2% on the day... didn't work out ideally after it got smacked down more than 4% in total but I remain long.
- Upfront let me emphasise that I have always prefered Implats (IMP) over Amplats (AMS)
- I maintain that IMP is run for the benefit of shareholders while AMS is run for the benefit of Anglo American and it is a subtle difference but an important one
- The premium I attach to IMP is that when it has its good years, it rewards shareholders with great dividends and special dividends
- From what I have read almost all of the IMP assets in Zimbabwe have been written down to zero
IMP had a very scratchy September with (correct me if I am wrong) but I think they had 3 fatalities - something which is being focused on by a lot by the industry and of course the media. But if you are pragmatic about these things then you also have to recognise that it re-focuses management on operational problems which in turn (one hopes) flows through to a better run platinum business.
I was reading some research out RMB Morgan Stanley released on Friday and this comment by one of their analysts jumped out at me:
"Marking to market, Implats looks more robust: Applying spot values for the rand, PGM and base metals, we estimate that AngloPlat’s NPV would fall 27% to R494, while Implats would fall by 24% to R174. Alternatively, we assess that AngloPlat is pricing in platinum of USD1520/oz or a rand of 8.15/USD. Implats appears more robust, with its NPV pricing in the current spot (R7.40/USD, platinum USD1345.)"
In other words, there is next to no upside being priced into IMP at the moment... which one would assume means its ripe for those cheesy brokers and analysts to start pumping up their "overweight" and "buy" recommendations.
Which brings me to what I think could be drivers for a focusing in on the platinum sector in the next 3 months which will boost the IMP share price:
- Important factor - South Africa dominates global platinum resources. Any sense that the politics or the operating environment (Electricity) - founded or unfounded - and you will see the platinum price move up
- Lonmin have a dispute with their workers who are looking for a 25% wage increase while the company is offering 5%
- Xstrata dumped its bid for Anglo-American which I would take to mean that something else better is on the table. Something in platinum (Lonmin rearing its head again?). If the platinum sector goes through another round of assets shuffles then this catches the imagination of traders and investors who start looking at the sector for opportunities.
- From the newsflow I get the sense that IMP seems to be coming into favour - and off a relatively undemanding base, it could be one to watch.
Monday, October 12, 2009
Monday - quick note
Hello boys and girls
A busy day on Monday but one which ultimately went nowhere fast.
The primary reason for my angst was that Sasol went ex-dividend today which lopped R6 off its price - money which was quickly recovered as markets continued to rally.
Sasol eventually finished the day off 80c at R288 with the SOLSBG warrant ticking up 2c to finish at 31c.
Goldman Sachs today set a revised (downward) price target on the oil firm with a 12-month target of R403... still a handy premium to where it is now!
Gold carried on trucking up nicely and I have some small long positions open on platinum as well. If there are legs to this economic recovery then an industrial precious metal like platinum could benefit at present levels.
Anyway tomorrow is another day - happy trading!
A busy day on Monday but one which ultimately went nowhere fast.
The primary reason for my angst was that Sasol went ex-dividend today which lopped R6 off its price - money which was quickly recovered as markets continued to rally.
Sasol eventually finished the day off 80c at R288 with the SOLSBG warrant ticking up 2c to finish at 31c.
Goldman Sachs today set a revised (downward) price target on the oil firm with a 12-month target of R403... still a handy premium to where it is now!
Gold carried on trucking up nicely and I have some small long positions open on platinum as well. If there are legs to this economic recovery then an industrial precious metal like platinum could benefit at present levels.
Anyway tomorrow is another day - happy trading!
Thursday, October 1, 2009
Friday mumbles
After making a small profit on my short on the Top40 I closed out my position and the only open trade I now have open is a long on Sasol. At least the Rand is providing a bit of a handbrake at the moment and the oil price at $68.60 is "robust"
There is no question that the rising unemployment issues in places like the US remains a threat - you cannot have a jobless recovery - finished and klaar. Personally I think a lot of stocks will still come off over the next few months - particularly those with exposure to the consumer end of the market.
A couple of people commented that being long Sasol while shorting the TOp40 was surely counter-productive and in general that makes sense. But Sasol is cheap in comparison to its international peers.
At the moment Sasol is trading on a price to earnings (PE) multiple of say 10.5 (allowing for some currency).
In comparison the historical PE's of:
For sure Sasol is not Exxon or Chevron but when one considers the multiplier effect that a weaker rand could have on earnings and the great technology the company possesses, it would make sense to see Sasol pushing on from here.
But that's just my view so who knows.
It is not a very scientific method of analysing investor sentiment but I thought what was quite interesting was to take a look at the top headlines on CNN....
# Chicago, Rio lead race to host Olympics
# Key piece of human evolution revealed
# 1,100 dead in Indonesia quakes, U.N. says
# Ex-prosecutor says he lied about Polanski case
# Martin: Hollywood is clueless on Polanski
# CNNMoney: Dow plunges on economic reports
# Fortune: BofA CEO scores $53M retirement
# KSL: Elizabeth Smart says she was raped daily
# Vote now for 2009 CNN Hero of the Year
# Time: What Berlusconi's Obama jokes say
# Ticker: Republican sounds off on Polanski
# Boy, 11, wages fight against the N-word Video
# Stranger carries boy from burning building Video
# H1N1 vaccine on schedule, official says
# What if you ditched your car for a day?
# Kanye West's 'Fame Kills' tour meets swift end
# Sister upset about Mackenzie Phillips' book Video
# Poo power saves farmer $200,000 Video T-shirt
# CNN Wire: Jon Gosselin’s epiphany...
...... Yip sounds like people are REALLY worried about panic in the global economy this Friday.
There is no question that the rising unemployment issues in places like the US remains a threat - you cannot have a jobless recovery - finished and klaar. Personally I think a lot of stocks will still come off over the next few months - particularly those with exposure to the consumer end of the market.
A couple of people commented that being long Sasol while shorting the TOp40 was surely counter-productive and in general that makes sense. But Sasol is cheap in comparison to its international peers.
At the moment Sasol is trading on a price to earnings (PE) multiple of say 10.5 (allowing for some currency).
In comparison the historical PE's of:
- Exxon Mobil - 17 times
- Chevron - 15 times
- Royal Dutch Shell - 13 times
- BP - 13.9
- ConocoPhillips - 13
- Total - 9
For sure Sasol is not Exxon or Chevron but when one considers the multiplier effect that a weaker rand could have on earnings and the great technology the company possesses, it would make sense to see Sasol pushing on from here.
But that's just my view so who knows.
It is not a very scientific method of analysing investor sentiment but I thought what was quite interesting was to take a look at the top headlines on CNN....
# Chicago, Rio lead race to host Olympics
# Key piece of human evolution revealed
# 1,100 dead in Indonesia quakes, U.N. says
# Ex-prosecutor says he lied about Polanski case
# Martin: Hollywood is clueless on Polanski
# CNNMoney: Dow plunges on economic reports
# Fortune: BofA CEO scores $53M retirement
# KSL: Elizabeth Smart says she was raped daily
# Vote now for 2009 CNN Hero of the Year
# Time: What Berlusconi's Obama jokes say
# Ticker: Republican sounds off on Polanski
# Boy, 11, wages fight against the N-word Video
# Stranger carries boy from burning building Video
# H1N1 vaccine on schedule, official says
# What if you ditched your car for a day?
# Kanye West's 'Fame Kills' tour meets swift end
# Sister upset about Mackenzie Phillips' book Video
# Poo power saves farmer $200,000 Video T-shirt
# CNN Wire: Jon Gosselin’s epiphany...
...... Yip sounds like people are REALLY worried about panic in the global economy this Friday.
Monday, May 25, 2009
Interesting times
Monday was a bit of a non event as far as trading went - neither the US nor the UK were open for trading so global markets were battling for direction of any kind.
However I thought that maybe the Memorial Day holidays in the US may provide us with a short-term trading opportunity. The Americans are quite big on these big patriotic holidays and on more than one occasion I've seen these "Patriot Rallys" where US markets go up seemingly because of national sentiment.
Did a bit of a Google search on the subject - specifically relating to Memorial Day - and I came up with this link which made for good reading (particularly if you're a stats or quants guy).
Used Monday to position myself with a couple of short term long trading positions on the Dow, S&P, Oil, JSE All Share Index, Naspers, AngloGold and Sasol. Yeah yeah its a bog-roll long list of pozzies but I'm comfortable with the spread.
I wanted MTN as well yesterday morning but the merger talk with Bharti moved the price too early and I couldn't get the entry I wanted.
The Oil trade hasn't yet gone totally to plan and is bouncing around just above my stop-loss but there seems to be some support at above US$59.50 which is keeping me in the game.
I don't believe this will be a particularly sustainable rally but I guess we try and take the opportunities when they look like they are there and if there are short-term profits available then we take it off the table.
However I thought that maybe the Memorial Day holidays in the US may provide us with a short-term trading opportunity. The Americans are quite big on these big patriotic holidays and on more than one occasion I've seen these "Patriot Rallys" where US markets go up seemingly because of national sentiment.
Did a bit of a Google search on the subject - specifically relating to Memorial Day - and I came up with this link which made for good reading (particularly if you're a stats or quants guy).
Used Monday to position myself with a couple of short term long trading positions on the Dow, S&P, Oil, JSE All Share Index, Naspers, AngloGold and Sasol. Yeah yeah its a bog-roll long list of pozzies but I'm comfortable with the spread.
I wanted MTN as well yesterday morning but the merger talk with Bharti moved the price too early and I couldn't get the entry I wanted.
The Oil trade hasn't yet gone totally to plan and is bouncing around just above my stop-loss but there seems to be some support at above US$59.50 which is keeping me in the game.
I don't believe this will be a particularly sustainable rally but I guess we try and take the opportunities when they look like they are there and if there are short-term profits available then we take it off the table.
Thursday, May 21, 2009
Go Gold go!
Absolutely loving this gold price action and pretty sure we've got clear air up to $970 before the end of the week. At this moment in time we're floating around the $953 mark and the only thing that hasn't played the game in terms of my AngloGold call has been the strong Rand. (or is that more specifically a weak dollar)
Still pretty confident that long ANG is a good place to be going into tomorrow.
Sasol was looking fine but dipped off today as the exchange rate strengthened and US markets sold down but still pretty happy with where we're at.
Looking forward to tomorrow, I reckon there is going to be plenty of short covering around gold as people pile in and technically I don't see the Rand / Dollar getting through the R8.20 mark to the dollar.... in fact I think there might be some hot money being pulled from emerging market currencies tomorrow...
Let's see ...
Still pretty confident that long ANG is a good place to be going into tomorrow.
Sasol was looking fine but dipped off today as the exchange rate strengthened and US markets sold down but still pretty happy with where we're at.
Looking forward to tomorrow, I reckon there is going to be plenty of short covering around gold as people pile in and technically I don't see the Rand / Dollar getting through the R8.20 mark to the dollar.... in fact I think there might be some hot money being pulled from emerging market currencies tomorrow...
Let's see ...
Monday, May 18, 2009
Hhhhmmm....
Honestly can't believe the strength of this rally - am I missing something
I took a couple of positions on Monday - long Sasol (SOL) @R294 and long AngloGold (ANG) R314 and then stuck in some wider reaching short positions.
Of course ANG promptly announced its bond issue and the share price took a bit of a smack beneath R300.
Interesting to see there is a bit of a buzz in the gold price despite the equity rally - we're sitting around between 920 and 930...
I took a couple of positions on Monday - long Sasol (SOL) @R294 and long AngloGold (ANG) R314 and then stuck in some wider reaching short positions.
Of course ANG promptly announced its bond issue and the share price took a bit of a smack beneath R300.
Interesting to see there is a bit of a buzz in the gold price despite the equity rally - we're sitting around between 920 and 930...
Monday, March 2, 2009
Going long
Geez another rout on stock markets yesterday and the Dow Jones went below our 6800 target briefly closing at 6763 points down 299 points.
Big news of the day on the international front was that AIG reported a US$62bn loss for the quarter and on the local front the speculation is running riot (For the nth time!) that Old Mutual will offload their Nedbank stake.
What was interesting though was that despite the rout on US equity markets, the Alsi only moved down 0.43% and at this very moment in time the Nikkei has given up only 49 points and at one stage was threatening to go green. While the US takes the pain the rest of the world seems to be taking a back-seat ... a chance to look for a short term bounce?
I started going long in late trade on Monday, pretty much across the board.
You're probably thinking I'm a little loco going out on a limb here and going long but I think one has to stick to their convictions in some instances - I said 6800 was close enough to my short-term "low".
Also watching the Rand / Dollar exchange rate, I think this is where the kicker is going to come from over the next few days. The Rand slipped to R10.50 to the dollar and there doesn't seem to be too many reasons for it to go stronger either. I wouldn't be surprised if it fell to R11 to the dollar by the end of the week and that will provide a bit of upward momentum for our index - particularly if international markets take a bit of a breather...
Will see how it plays out
Big news of the day on the international front was that AIG reported a US$62bn loss for the quarter and on the local front the speculation is running riot (For the nth time!) that Old Mutual will offload their Nedbank stake.
What was interesting though was that despite the rout on US equity markets, the Alsi only moved down 0.43% and at this very moment in time the Nikkei has given up only 49 points and at one stage was threatening to go green. While the US takes the pain the rest of the world seems to be taking a back-seat ... a chance to look for a short term bounce?
I started going long in late trade on Monday, pretty much across the board.
- Long Gold
- Long Sasol
- Long Old Mutual (yeah yeah I know.... but there results are coming out so its worth a punt)
- Long Absa
- Long Remgro
You're probably thinking I'm a little loco going out on a limb here and going long but I think one has to stick to their convictions in some instances - I said 6800 was close enough to my short-term "low".
Also watching the Rand / Dollar exchange rate, I think this is where the kicker is going to come from over the next few days. The Rand slipped to R10.50 to the dollar and there doesn't seem to be too many reasons for it to go stronger either. I wouldn't be surprised if it fell to R11 to the dollar by the end of the week and that will provide a bit of upward momentum for our index - particularly if international markets take a bit of a breather...
Will see how it plays out
Thursday, February 12, 2009
Oh come on!
Bugger.... The Sasol share price fugged me around today and I was eventually stopped out of my long position. Three losses in a row.
Was planning just to sit on my hands, but I noticed a massive volume go through on Beige Holdings and thought maybe something was happening there.
Noticed an article on Fin24.com saying that the company had been buying back a chunk of its shares so I used some of my scraps to pick up a few more shares in Beige.
We'll wait and see.
Was planning just to sit on my hands, but I noticed a massive volume go through on Beige Holdings and thought maybe something was happening there.
Noticed an article on Fin24.com saying that the company had been buying back a chunk of its shares so I used some of my scraps to pick up a few more shares in Beige.
We'll wait and see.
Wednesday, February 11, 2009
Unfrigginbelievable!
So NOW the bloody fundamentals come into play and the US drops like a friggin rock...?! I'm rapidly losing my sense of humour here...
I haven't quite been stopped out of my Sasol long position but certainly not enjoying the lack of trend in the market at the moment... Maybe that's a problem I need to look at more closely... Volatility is screwing up positions but the underlying question should be: WHAT THE $@CK IS THE TREND?!
Basically the US dropped when they realised they didn't feel all that confident that the bank bailout plan was going to be able to stave off problems in the US banking market. This set panic across global markets initially as all the tentative confidence in the markets evaporated.
SA markets have a bit of a "shock-absorber" as the Rand weakened a bit and after the initial Blitzkrieg on our markets. Stocks seemed to have bounced off their low now that Europe is in our markets.
A bit of a dog show on the markets at the moment as we try and shrug off what has happened in the US...
But anyway I digress.
My thoughts this morning turned to pair trading i.e. taking long and short positions simultaneously as a way of dealing with the intra-day / intra-week volatility we're experiencing at the moment. It is not a strategy I've previously employed but I guess it holds some appeal for me with such big movements.
My initial thoughts were to look at Long Sasol / Short All Share or Long All Share / Short SAP for example. Bounced it off the guys on the Page 88 forum and apparently clients at Cortex have had some success with the Platinum counters in recent months - Long AMS / Short IMP.
Other recommendations were:
(MTN / Telkom)
(Anglo American / Billiton)
(Gold Fields / Harmony)
I guess the trick would be to find weightings for these positions and taken an active role managing them... Obviously there is also a higher level of investment required for these kind of transactions.
And THAT my friends will be my Plan Of Action for the next few days...
I haven't quite been stopped out of my Sasol long position but certainly not enjoying the lack of trend in the market at the moment... Maybe that's a problem I need to look at more closely... Volatility is screwing up positions but the underlying question should be: WHAT THE $@CK IS THE TREND?!
Basically the US dropped when they realised they didn't feel all that confident that the bank bailout plan was going to be able to stave off problems in the US banking market. This set panic across global markets initially as all the tentative confidence in the markets evaporated.
SA markets have a bit of a "shock-absorber" as the Rand weakened a bit and after the initial Blitzkrieg on our markets. Stocks seemed to have bounced off their low now that Europe is in our markets.
A bit of a dog show on the markets at the moment as we try and shrug off what has happened in the US...
But anyway I digress.
My thoughts this morning turned to pair trading i.e. taking long and short positions simultaneously as a way of dealing with the intra-day / intra-week volatility we're experiencing at the moment. It is not a strategy I've previously employed but I guess it holds some appeal for me with such big movements.
My initial thoughts were to look at Long Sasol / Short All Share or Long All Share / Short SAP for example. Bounced it off the guys on the Page 88 forum and apparently clients at Cortex have had some success with the Platinum counters in recent months - Long AMS / Short IMP.
Other recommendations were:
(MTN / Telkom)
(Anglo American / Billiton)
(Gold Fields / Harmony)
I guess the trick would be to find weightings for these positions and taken an active role managing them... Obviously there is also a higher level of investment required for these kind of transactions.
And THAT my friends will be my Plan Of Action for the next few days...
Monday, February 9, 2009
Sigh....
Two losing trades in a row now on Sasol, one long and one short and we're back to the point where I initially entered my original long position.
After breaking R285 in early trade on Monday, I was stopped out of my position and followed Sasol up in a new long position. The share closed R297 which is pretty healthy spike on the day.
Big upward price movements on Friday and Monday would seem to indicate something is potting at Sasol. Doesn't agree with my shorter term view that there is more downside risk but that's the way the market is going at the moment.
After breaking R285 in early trade on Monday, I was stopped out of my position and followed Sasol up in a new long position. The share closed R297 which is pretty healthy spike on the day.
Big upward price movements on Friday and Monday would seem to indicate something is potting at Sasol. Doesn't agree with my shorter term view that there is more downside risk but that's the way the market is going at the moment.
Monday, January 26, 2009
Ja, no, WHATEVER!
A 38 point "rebound" on the Dow and we're getting all excited that we've hit a bottom?! Strewth...
A big part of the US rebound was driven by better than expected US Home Sales figures and this got the Yanks all nice and bubbly and the Dow was up nearly 2% until reality hit home and the market scratched out a small gain.
Asia has also started out green, but I wouldn't hold my breath on this one - even if it plays havoc with my short on Sasol.
Home sales
I didn't see much coverage of it and I don't profess to be a master of the US financial reporting sector but at some point home sales figures have to bounce for the simple reason that there is a false "buyer" in the market and it sure as hell ain't the US consumer....
Exactly the same thing is happening in South Africa at the moment - the consumers are getting their houses repossesed and the banks are sending out their agents to buy them up because there is no demand for the properties from consumers who can't afford them.
I also think its quite convenient that it came out a week after Obama signals in "a new era"... but that might just be the conspiracy theorist in me...
Retrenchments
You want to know to know why I doubt its the consumer rushing out to buy a new house?! Try this for the reason:
Put simply - That's 60000 odd consumers having to further watch their spending or fill up their cars or invest in equity markets or the property market that needs to come into the system...
Gold
The gold price broke through US$900 level yesterday following up on the gains made on Friday.
I tend to get a little excited when gold starts firing for the simple reason that it tends to be a pre-cursor to further carnage. That's a bit of a generic statement but I think its justified in the current environment.
Sasol short
I remain with an open short position on Sasol although I think movements in the market yesterday and probably today are going to make position look a little unattractive but let's wait and see.
In my head I still see the Dow dropping probably another 30% from these levels and further downside on the ALSI of between 10 and 15%.
Let's see how today plays out and reassess at the end of the trading day.
A big part of the US rebound was driven by better than expected US Home Sales figures and this got the Yanks all nice and bubbly and the Dow was up nearly 2% until reality hit home and the market scratched out a small gain.
Asia has also started out green, but I wouldn't hold my breath on this one - even if it plays havoc with my short on Sasol.
Home sales
I didn't see much coverage of it and I don't profess to be a master of the US financial reporting sector but at some point home sales figures have to bounce for the simple reason that there is a false "buyer" in the market and it sure as hell ain't the US consumer....
Exactly the same thing is happening in South Africa at the moment - the consumers are getting their houses repossesed and the banks are sending out their agents to buy them up because there is no demand for the properties from consumers who can't afford them.
I also think its quite convenient that it came out a week after Obama signals in "a new era"... but that might just be the conspiracy theorist in me...
Retrenchments
You want to know to know why I doubt its the consumer rushing out to buy a new house?! Try this for the reason:
- Caterpillar: 20,000 job cuts
- Pfizer: 19,000 job cuts (10% reduction), plus additional layoffs due to merger with Wyeth
- Sprint Nextel: 8,000 job cuts
- Home Depot: 7,000 job cuts (ODD IF THE CONSUMER WAS TURNING THE CORNER HUH?!)
- Texas Instruments - 12% of global workforce
- Philips: 6,000 jobs
- Lincoln National Corp - 540 jobs
Put simply - That's 60000 odd consumers having to further watch their spending or fill up their cars or invest in equity markets or the property market that needs to come into the system...
Gold
The gold price broke through US$900 level yesterday following up on the gains made on Friday.
I tend to get a little excited when gold starts firing for the simple reason that it tends to be a pre-cursor to further carnage. That's a bit of a generic statement but I think its justified in the current environment.
Sasol short
I remain with an open short position on Sasol although I think movements in the market yesterday and probably today are going to make position look a little unattractive but let's wait and see.
In my head I still see the Dow dropping probably another 30% from these levels and further downside on the ALSI of between 10 and 15%.
Let's see how today plays out and reassess at the end of the trading day.
Friday, January 23, 2009
Friday update
Geez these crazy Americans are doing everything in their power to defend the 8000 level on the Dow...
My Sasol short
I remain in my Sasol short. There were a couple of times were the market looked like it was going to give but the Rand slipped in late trade and I think that saved a couple of hedges from a really bad day....
Pity but I'll get over it and I remain short.
Watching US trade I see that the market is bouncing every time it gets close to 8000 and the oil price has moved up a bit - probably going to count against the Sasol position.
The trend remains down and there's no conviction in the US markets either.
Sappi
I see the guys over at the ShareTips site have also hit on the intra day volatility in Sappi (SAP)
For traders who are looking for some action, we'd also recommend a look at Sappi. Plenty of action either way which might catch your eye.
Gold
Gold has spiked up nicely in late US trade to flirt with the US$900 an ounce mark and if the dollar / rand exchange rate continues to weaken then the gold bulls will have a ball...
Fundamentally Gold Fields probably isn't the worlds favourite share at the moment but its got some definite volatility and without stating the obvious if the gold price and rand go the right way who really cares WHAT the CEO has to say....
My Sasol short
I remain in my Sasol short. There were a couple of times were the market looked like it was going to give but the Rand slipped in late trade and I think that saved a couple of hedges from a really bad day....
Pity but I'll get over it and I remain short.
Watching US trade I see that the market is bouncing every time it gets close to 8000 and the oil price has moved up a bit - probably going to count against the Sasol position.
The trend remains down and there's no conviction in the US markets either.
Sappi
I see the guys over at the ShareTips site have also hit on the intra day volatility in Sappi (SAP)
For traders who are looking for some action, we'd also recommend a look at Sappi. Plenty of action either way which might catch your eye.
Gold
Gold has spiked up nicely in late US trade to flirt with the US$900 an ounce mark and if the dollar / rand exchange rate continues to weaken then the gold bulls will have a ball...
Fundamentally Gold Fields probably isn't the worlds favourite share at the moment but its got some definite volatility and without stating the obvious if the gold price and rand go the right way who really cares WHAT the CEO has to say....
Thursday, January 22, 2009
DOWn we go...
Hhhhmmmm I'll admit I got a little concerned about my Sasol short when the share opened up a coupla percent this morning but the oldest lesson in the traders book - THE TREND IS YOUR FRIEND...
Stuck in the position and sure enough Sasol started trading down a bit. Looking at the action in the US got me even more interested.
At one stage the Dow was grappling for any kind of traction and even traded below 8000 for a while. Unfortunately it seems to have recovered a bit and the last few minutes of US trade are going to be interesting.
SSL is down 5% in the States which keeps me interested.
Momentum remains to the downside so don't see any reason to change direction now but taking some profit off the table should SOL get around R250 - R251....
Stuck in the position and sure enough Sasol started trading down a bit. Looking at the action in the US got me even more interested.
At one stage the Dow was grappling for any kind of traction and even traded below 8000 for a while. Unfortunately it seems to have recovered a bit and the last few minutes of US trade are going to be interesting.
SSL is down 5% in the States which keeps me interested.
Momentum remains to the downside so don't see any reason to change direction now but taking some profit off the table should SOL get around R250 - R251....
Tuesday, January 20, 2009
Shorting Sasol
Well I got stopped out of my Sasol long and promptly reversed my position by going short... The Sasol share price dropped nicely and SSL is down a whopping 12.35% in the US.
(Obviously this is a bit of a function of the catch-up from Monday) but that puts Sasol at around R259 in Rand terms. Well below where we are at at the moment.
With Asia down again (particularly BHP) we should have some more pressure on our resources again today.
A little frustrated with myself as I converted some of my dividend earning shares into trading positions - which went against my "bigger picture" strategy but hopefully it will pay off.
My thinking is to convert some of the profits from the trades back into blue chip just to build the dividend stream as I go along.
Investec
I see InvestVrek (previously known as Investec) also took a whack yesterday.... UK banking operations have been on the receiving end of a hiding since the RBS announcement and with the Pound being flushed down the toilet it hasn't helped the share price here...
Might prove to be an interesting one from a dividend yield perspective in the next few months if it keeps tracking down like this - but that depends on what form Investec will take by the end of the year...
(Obviously this is a bit of a function of the catch-up from Monday) but that puts Sasol at around R259 in Rand terms. Well below where we are at at the moment.
With Asia down again (particularly BHP) we should have some more pressure on our resources again today.
A little frustrated with myself as I converted some of my dividend earning shares into trading positions - which went against my "bigger picture" strategy but hopefully it will pay off.
My thinking is to convert some of the profits from the trades back into blue chip just to build the dividend stream as I go along.
Investec
I see InvestVrek (previously known as Investec) also took a whack yesterday.... UK banking operations have been on the receiving end of a hiding since the RBS announcement and with the Pound being flushed down the toilet it hasn't helped the share price here...
Might prove to be an interesting one from a dividend yield perspective in the next few months if it keeps tracking down like this - but that depends on what form Investec will take by the end of the year...
Monday, January 19, 2009
Bloody Sasol!
I've been out of trading mode for a while as December wound down and we drifted into January...
Anyway decided to get back on the trading horse today and got a nasty start.
Spent a lot of time yesterday scanning through the big caps and isolated the trading options down to Gold Fields, Sasol, Sappi and Anglo American based on their volatility in the last few weeks.
Saw the Rand weakening a bit, thought Sasol had established a base around R290 and seemed to have confirmed something of a short term up-tick. With the ObamaMania swamping the US, I expected some opportunities
Went long Sasol using Sasol warrant SOLSBD. About 10 minutes after I entered the trade, Sasol came out with their Competition Commission disclosures and we "enjoyed" a bitch slap all the way down to R274.
Rough day on the market in general and I'm still anticipating a US "Patriot" rally as Obama sweeps into office. We're seeing the Rand slightly weaker vs. the US dollar but the oil price isn't coming to the party just yet...
Will see what tomorrow brings and then decide what I'm going to do with the position....
Anyway decided to get back on the trading horse today and got a nasty start.
Spent a lot of time yesterday scanning through the big caps and isolated the trading options down to Gold Fields, Sasol, Sappi and Anglo American based on their volatility in the last few weeks.
Saw the Rand weakening a bit, thought Sasol had established a base around R290 and seemed to have confirmed something of a short term up-tick. With the ObamaMania swamping the US, I expected some opportunities
Went long Sasol using Sasol warrant SOLSBD. About 10 minutes after I entered the trade, Sasol came out with their Competition Commission disclosures and we "enjoyed" a bitch slap all the way down to R274.
Rough day on the market in general and I'm still anticipating a US "Patriot" rally as Obama sweeps into office. We're seeing the Rand slightly weaker vs. the US dollar but the oil price isn't coming to the party just yet...
Will see what tomorrow brings and then decide what I'm going to do with the position....
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