Well folks, I shut down trading today. Ian landed around 13:00hrs and went to straight to the pub. Having been in Africa for 3 months nearly it was allegedly because he hadn't had a decent drink, but I shall post a photo to disprove that statement in due course! We are decamping to the pub, so I will relay some thoughts tomorrow before shutting down until the New Year.
Save for Rurelec, where there is a slim chance of news tomorrow, I won't be monitoring stocks. I have set my alerts up to catch the news so I'll spend a few days acclimatising to work again in the New Year. Two thousand and fourteen beckons.
Enjoy the festivities and don't read items that are not needed, use the time to enjoy why you trade or aspire to wealth improvements. Perhaps even consider if you need to trade or invest on the markets and if so what are you aiming for. Look at the rights and whatfor's of investing; it's not right for everyone.
Many thanks for the messages and challenges, I am sure there will be a different cycle of risk for next year. What most are calling risk on, for smaller caps I'll call it 'risk off.'
And what a year to end on a trade for GBPAUD (Ozzie dollar), the Government (Ozzy) needs it weaker and their needs are also the markets! is it heading for support at £1:$1.91, or even higher around the AU$2.04?
All the best, Fraser and in absence, Ian....
Fraser and Ian
ReplyDeleteHave a great break and all the best for you and your families in 2014.
Fraser, its good to catch up with you in FTML most days, its a good forum (despite the seemingly random tech analysis that punctuates our messages from a certain party- he gives us and BE someone to lay into from time to time!)- we don't always agree on stuff, but that good as we all know that markets aren't driven by logic alone, so much is dependant on the participants, who are illogical, biased and sometimes sentimentally attached to positions but these anomalies create opportunities for us all to profit from. I tend to take a long view and you short on a regular basis, so I enjoy your input and views.
Best wishes and cheers. The Leggie
Fraser- RUR RNS is out- end of Jan now.
ReplyDeleteCheers. The Leggie
Fraser is this you?
ReplyDeletefjp73/fraser
Dec 20, 07:52 PM (2 hours ago)
The trading strategy for me is “risk on” in terms of smaller caps, but based on fundamentals. The taper or as Roger (Bade) put it the “Taperette” means that fundamental projects will become more viable. As such, the dross which you have pointed out, for which I won’t name, will actually fail. The basis for taper means that monies have to go to ‘higher’ risk projects. This for me means the likes of Wolf Minerals and Baobab (and plenty more) will prove more promising. It shall include projects such as EMED’s although I am looking to exit that post the next set of news on principle.
What however isn’t of concern, to the market currently, is the two stables of finance available in China. The first being the banking approved lending which assists most companies but mining companies are excluded and the secondary non-regulated market supports these. As such, as a trade (shorts) I’m looking for a contraction in the Chinese Money markets. This will be brought about not only by the recent issues with Liansheng Coal but other companies will follow suit. Coal has had a number of issues (I won’t cover here) but the shutting down of older power stations in exchange for cleaner power producers (Gas) is a theme from America to China. This has impacted on demand (massive drop) and as such the supply price has followed suit. Albeit some coal firms are may be progressing, the recent and upcoming U&G Coal in Australia, which on ‘paper’ has some positive fundamentals.
Whilst trying to keep this comment brief, what is of concern is “the Chinese economy has had a boom” reliant significantly upon resources. Those resource companies (for which Solar is included) have defaulted upon bonds, Liansheng a prime example, and on the solar side LDK Solar Co.‘s delay in paying debt and Suntech Power Holdings Co.‘s . These have been supported by Chinese Bonds (Unregulated) but on the whole from monies borrowed from the regulated markets and these are now in default…
A reader may not perceive the significance of such defaults, however what I do see is “a contraction” in monies contradicting Chinese growth forecasts. As such, for a risk on environment in America, UK and potential Europe, there will be a risk off environment in China. As the juggernaut propelling growth this is likely to have significant ramifications for the global banking as China defaults internally, including a number of risks around Local Government Default in China whom have supported companies default on bonds via grants and development payments. This, I feel will push items to “global” scale “perhaps” similar to 2008 but impacting internally in China. What people don’t realise is, it will increase supply of gold as new wealth in China seeks to sell down assets (namely gold at first) to meet demands in other areas. Akin to “cash for gold” seen in America, UK and Europe, and a prime example being Albemarle and Bond’s current situation (one of my best shorts of 2013).
So, avoid crap, stick with fundamentals that have the availability of cash and avoid “significantly leveraged” plays in any sector. So far, the leverage hasn’t work and has failed; POG (Petropavlovsk plc) is a prime example. Growth companies will come with the highest risks…also the highest rewards if they succeed.
Just my view. Prior to going out to party, I’d like to thank you Tom for the thought provoking views, irrespective of whether I agree, it’s enabled me to consider other options when taking positions.
All the best Fraser.
looks like you: excellent discussions