The last week and a bit has been exceedingly busy with the benefit of 5+ hour lunches it was hardly a chore; finally delivering the Blue Nun bet (2 months late). We saw the publicising of Roble being unmasked (along with Fest, Blau and Fresco). You would be hard pushed to argue it did not create interest for the FT and as such served their purpose of news. Should the ultimate beneficiaries of any trade be named, in fact down to the clients? No, it wasn't illegal nor was there any compelling question over their actions or position.
There are plenty of funds out there doing the same but long, yet for 'some strange reason' these have not been exposed despite it being fairly easy to identify who is who; but not for all. There's without a doubt going to be an amendment to the regulations to discontinue this practice, for the shorters. We'll ignore those sovereign wealth funds with discreet arm's length companies producing high profits without a label but adhering to the legal requirements fully. For those privy to such information they would be wise not to bite the hand that feeds them (assuming everything is above board).
Does it really matter which fund is at the end of the position as long as the position is disclosed? Personally no its not a secretive trade. What concerns me is a) where and why that person thought it was beneficial to disclose information and why people feel the need to know the beneficiaries or does one have to list the all the holders in those trades as well (Ultimate beneficiaries)? The article puts no responsibility on the regulators to make companies more transparent about their financial position, revenue recognition, disclosures and more importantly to adhere to the principles of the regulated news (RNS).
QPP, like various other companies had a lot of steam built in. Rule One is never invest in a company you don't understand the finances of, the product perhaps is a different story, but never where the financials are so complex it gives you a headache. The article may have caused a fund to exit (cover) its position earlier than planned.
Tom Winnifrith (TW) has done and is doing a marvellous job and without a doubt enjoys the chase or kill. For TW's business model is rightly what pays the bills and certainly something people without more ego than IQ should pay attention to, at least to TW's modus operandi. Those people should include fund managers, private investors, shorters and long only fraternity. Its comedy to hear managers justification for such losses in companies including diverse portfolio etc...ultimately diversity will save a portfolio but never use it as an accuse for a poor or bad investment
Tiger Group operate an well-balanced model that funds should be encouraged to consider...perhaps in time this will change the face of investing. So many managers out there do not even comprehend the issues or impact of short positions. What next, a story on who lent the stock to Tiger? We can hope not...We'll leave it there on that, but suffice to say the unmasking was not a positive day for the markets or just maybe a certain person involved in the deal. Best of success in that...on the flip side, journalism rewarded their readers. (Off the soap box).
With the AIM M&A season now in full swing we've seen some rather purposeful announcements today (Sound Oil: SOU), that hopefully I'll return to, the holders should just might be rewarded. Perhaps even hold out for a small premium at Antrim, but allegedly the votes for the majority are in the bag.
There's rumours of a certain company reducing production significantly on Iron Ore that could remove a vast amount of supply...watch the news for a potential spike, hopefully I'll be able to cover it later in the week.
So we have Serco Group (SRG) and now we have a tiddler,Oilex Ltd (OEX) lamp posting the shorts. Its a bizarre state of events when companies forewarn to the detriment of their shareholders and stability of the business. Pricing in Serco has had various darts thrown at the SP, the final one being 65 pence which doesn't seem unreasonable in light of trading conditions etc...there's a real risk of such a discounted rights issue to assure any underwriters of reduced risk it questions why anyone is holding. Cash off, risk off...need one say more about it.
It was a pleasure to be pointed in the direction of Fuller Smith & Turner (FSTA) by Dave (congrats), obvious but it did clearly spook shorters why it hadn't moved like Fullers' competitors. One won't cover the Beaufort upgrade (buy) today (more reiteration), but will state FSTA are obviously not impacted (yet) by the potential issues, but it rather caps any progress for the company. Personally it would be wise to consider the risks unknown if one holds long and await a recalibration of the industry, pending on your longer-term views.
Positive developments on BT.A today, with the quad play coming truly in to play. Perhaps analysts/brokers would be wise to read the small print of the licenses BT acquired and see the potential of a tie up. An offering that will compete on a British level above what anyone is pitching currently. The if is affordability and pricing...
Atb Fraser
Fraser- Hi- not sure if you can classify 22.12 as a morning mumble- perhaps an evening grumble would be more descriptive :-))
ReplyDeleteThanks for the Blue Nun- it has been confiscated by the better half and brownie points target increased for the next week - perhaps I need to adopt an aggressive accountancy re brownie points and prebooking them- TSCO style, or even QPP re their accruals. You are quite right that its important to have a grasp of a company's business before investing- its quite apparent that some think Bellzone was an Irish boy band and invested accordingly. Some brokers should issue blindfolds and pins to clients together with the superyachts brochures.
Re BT- yes, if the price is right and they can play O2 against EE here so it should be, they are doing the right thing by buying a mobile network- it may well force Vodafone into the Sky tie up and in the long run it should help with profit margins, so I will have to rework BTs fair value later. V positive move for me.
Re THAL- perhaps the most predictable RNS of the day, given the issues previously here and the industry backdrop plus the Russian element. I assume it is paying for your peanut butter orders Fraser :-))
No FTML later for me as I need to whip together a codicil for an old colleague who makes great cakes and coffee.
Cheers. The Leggie