Australian Shares

1

Trading Day: 12th April

S&P/ASX200 Index – XJO The S&P/ASX200 is down over 1 percent or 50 points to 4920 (update: 1pm EST) after weak overnight action. The V-shaped rebound is slowing down, as exuberance gives way to reality. Winners AMP: still overbought, but bids keep coming. ANZ: uptrend is not slowing down! Consensus rules – banks are back.

0

Cheap and nasty

A report by Gerard Minack at Morgan Stanley today wrestles with one of this blogger’s favourite topics, the problem that the cost of capital is taking a holiday in developed economies. This is distorting pricing and making the job of getting decent returns unusually difficult. As one chief executive commented at a presentation recently, we

7

Trading Day: 11th April (updated)

I will be providing this trading update on the ASX100 daily at noon. Winners AMP: overbought in the short term, but accelerating in the medium term after a rounding bottom. BTFD ANZ: uptrend is slowing down. Watch for acceleration on external market rallies. BHP-Billiton (BHP) up up and away. Becoming overbought in the short term.

4

Macquarie warns of Dutch Disease

With the Australian dollar seemingly headed for even greater heights, at least in the short term, and consumers still in the doldrums as interest rates remain tight to contain the big flows of foreign capital into mining, analysts  are waking up to a deepening of the two speed economy, which may become entrenched in the Australian economy, creating a

9

Weekly Markets Analysis: 8th April

Lots of charts to look at today, first the usual fractal look at the Australian market, and then a quick look at the major components of my “Crashlist”. This is a select list of equity, FX and PM markets that I watch each evening as they open and analyse each morning before the Australian market

0

Donkey, thoroughbred marry

On Monday, at an Extraordinary General Meeting, Western Australian Newspaper (WAN) shareholders will likely approve the purchase of Seven Media Group (SMG) for $4.1 billion. The Seven Group forms part of SVM, which consists of the Seven Group and Westrac (a heavy machinery servicing group).  Aside from the free-to-air (FTA) channels 7, 7two and 7mate,

1

Small is beautiful

Analysts’ resources and attention mostly goes on the top 50 stocks, because they are liquid, institutions like them because they can defend their decisions, and brokers can sell their research more easily. It leads to an unhealthy relationship between the fund managers overseeing super funds and the big cartels. Cosy, comfortable, often compromised. For investors

1

Priced in

The Australian market’s S&P/ASX 200 only rallied 1% in the first three months of the year, compared with 5.4% for the S&P 500 in America. With the $A seemingly headed to $1.10, foreign investors, abut two fifths of the market, are likely to get nervous, and the strengths of the Australian market are probably priced

3

Buying miners and groceries

Two events have the market buzzing today: the bid by China’s Minmetals Resources to buy Equinox for $7, and the announcement that Grant O’Brien will replace Michael Luscombe as CEO of Woolworths. A bit from each side of the two speed economy. The bid for Equinox is below the traded price of $7.35 and brokers

4

Gear down for stocks

The global financial crisis was largely confined to a bloated and increasingly reckless financial sector. Yes, government debt positions worsened and excessive household debt was exposed. But non-financial corporations are in pretty good shape. Unlike the 1990 and 2000 economic downturns, business gearing was kept low.  The top 100 American corporates have almost $US2 trillion in

7

Weekly Market Analysis – 1st April 2011

Conceal me what I am, and be my aid For such disguise as haply shall become The form of my intent. Shakespeare Summary Stocks rallied hard last night on the US and European markets after – well, choose your reason and stick to it really. Jobs? Corporate profits? No new meltdown? Cow mutilations are up?

7

Health Stocks Part 2: Excellent Elixirs

On Tuesday I published Part 1 of a two part series on healthcare stocks.  I described how the health care industry is in a market sweet spot – high levels of government support, recession-proof demand and a large group of wealthy, ageing consumers (Boomers) entering a time of their life where healthcare expenditure will significantly

1

Too pricey for M&A

One of the recent stock market puzzles is that, since it became obvious Australia would not be hammered by GFC, there has not been a significant rise in M&A activity. Over $100 billion in capital was raised on the market in response to the GFC. The supposed reason was to “maintain balance sheet strength” (translation:

3

Telstra – still a telegraph pole stock

The Future Fund announced recently that is has reduced its holding in Telstra (TLS) to below 5%, and is still selling. Future Fund, I salute you. TLS is still a telegraph pole stock – as in, any sane, rational investor shouldn’t touch it with a ten foot or even a telegraph pole. In this post,

8

Retail woes

Picking the direction of retail demand is an issue assuming considerable importance for investors in the stock market.  It is a matter of deciding between two reversions to “normal” behaviour — consumption norms or savings norms. Many brokers are anticipating that consumer demand will be lower, but return to normal, which is why they have

2

Weekly Market Analysis: Risk is up!

The S&P/ASX200 index closed 0.91 per cent higher to 4,742.6 points on Friday, after a strong rebound rally. The index is up 116 points or 2.5% for the week, but still down 1.75% since the start of March and no movement at all for the year. For a primer on how I do my analysis,

0

Rio’s iron cross

Rio Tinto is complaining that governments are seeking rents when the rents should obviously go to Rio Tinto, as my co-blogger Houses and Holes pointed out. More pragmatically, is the stock accurately priced? Brokers are mostly putting buys on it, because that is the obvious thing to do. Yes, its very, very big — big

3

How to Sell a Donkey – Ask an “Expert”

The Prince sent me a link this morning to an article in the Oz about the WAN-7 Merger, which I wrote about a couple of weeks ago.  This quote in the article had me painfully coughing up my Weeties through my nose: “An independent expert’s report found Seven Media was worth between $519m and $986m

16

Gov’ should fund equity research

My co-blogger, The Prince, has devised a fine scheme to fund innovation that might prove highly effective. Which is why it will never happen, most probbaly. Still, to continue the practice of tilting at windmills, I wish to propose something else that might prove effective (and so also will probably never occur). Public funding of

2

Japan and local stocks

The financial markets are starting to settle after the tsunami in Japan, although matters remain ominous in North Africa. Brokers are starting to return to more conventional analyses of commodity trends, suggesting that stocks will also return to more predictable valuations, experience less volatility. UBS is reasonably bullish on the effects of the earthquake on

3

Weekly Market Analysis: March 18

Summary The S&P/ASX200 index eventually closed 0.4 per cent lower to 4,626.8 points today, after a wild rollercoaster ride. The index is down 200 points or 4.14% for the month and 2.4% since the start of the year. In effect, the XJO has gone nowhere since September 2009, rangebound between 4200 and 5000 points. In

6

The Banksters: Part 1

Note: This is part 1 of a 2-part series on trading and valuing the big four Australian banks. Part 2 shall be forthcoming soon. Fellow equities blogger Sell on News completed an excellent thematic post on the bubble like growth of the finance industry recently. In the face of a likely change in how capital

6

Sell finance

With global markets facing a period of sustained uncertainty, it is worth taking a longer perspective, comparing the current conditions with the so-called “Goldilocks” economy that existed just prior to the GFC. It turned out then to be a case of all the three bears instead of Goldilocks, but at the time things seemed robust

10

Stocks for Bears

It’s a scary and volatile world at the moment:  floods, cyclones, earthquakes, tsunamis, US housing crashes, Aussie housing bubbles, the GFC, QEII, PIIGS, Japanese debt, revolution in the Middle East and Charlie Sheen.  As the Chinese curse goes, we are living in interesting times. So what’s a bear to do?  I’ve never been the “head

3

Will this cat bounce?

Today’s strong uptrend in almost all risk markets is not that surprising. In trader’s parlance, this may just be a “dead cat’s bounce“. Sorry for the awful terminology, but there it is. This broad correction offers both risks and opportunities for trader’s and investor’s alike. For the latter, it offers excellent buying opportunities in “Very

1

QBE shaken

Given the enormity of what is happening in Japan, it seems a little trivial to be tracking the possible effects on Australian shares. The greatest concern will be the long term impacts on the world’s third largest economy and one of the power houses of the Asian region. Japan is a heavy consumer of Australian

3

The Neck is broken? ASX200 drops below 4750

Well that didn’t take long – the ASX200 has corrected again this morning, with an intraday level at 4714 points. Readers may have noticed that I am still wrong about a possible rally! In my last regular weekly analysis I did mention however: But basic charting analysis suggests a more bearish stance: a classic head

10

When a Donkey Meets a Thoroughbred

After a quick holiday across the pond in NZ (luckily not near Christchurch), your blogger returned to Australia to the news that West Australia Newspaper Holdings (WAN) is going to buy the Seven Media Group from Seven Group Holdings (SVM). So a WA media monopoly is marrying the TV sideshow of a Caterpillar servicing business. I can’t wait to see their kids.

0

In the carbon crosshairs

Amidst the heat and confusion about the carbon price, it does seem increasingly likely that some sort of tax will be applied. What does it mean for stocks? “Don’t know yet,” is the commonest answer, and not unreasonably so. But it is likely to hit the big emitters. The steel companies, BlueScope Steel and OneSteel