Transense: Automotive Sensor IPR for Honeywell, Michelin & The World.

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vizz - 6 Nov'05 - 19:36 - 3191 of 3779

Markets are efficient & look ahead, a theory that's deaf, dumb & blind if using TRT as an example.

Often in life the obvious is not recognised or if it is, there are many reasons for ignoring it. Last Sunday my lengthy post 3060 delved into major points about TRT in some depth, including the criticism of impatience over the arrival of an RNS, which is beginning to obscure rational thought.
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I've highlighted the introduction of a previous post to emphasise a point in view of subsequent SP activity. Rather than review familiar TRT ground and debate, I felt it might be helpful to ponder on a parallel line of thought with my 2nd largest equity asset, BVC, which had similarities of market attitude toward it as TRT, from which maybe a lesson may be seen.

BVC was a darling of the tech boom that came crashing down in Y2K and was ignored thereafter until a few months ago because of the horrid state of the telephony sector where BVC operates. However, any research worthy of the name during the latter half of 2004 would have revealed that the telephony sector overall was in the process of major transformation and that BVC occupies a key infrastructure position in VoIP (Voice Over Internet Protocol) that looks destined to dominate world land lines and merge with mobile phones by the end of this decade. Facts were there for everyone with eyes to see, but all that registered with most punters was the memory of past losses and the determination not to be bitten again. The growing strength of fundamentals was ignored and nothing could be surmised by TA as BVC shares remained in a low-volume, under-priced narrow trading range from Oct-04 til Jly-05. Seldom a week passed during that period when I didn't add to my accumulation of shares and in conjunction with this, I also ran my largest spread-bet position ever, such was my conviction of an unrecognised prize. There was general agreement by us on the BVC BB that most investors would remain blind to this until the release of the Interims in Spt 05 provided figures to support the story and so it proved by a post-Interims 100% SP rise above the level it stood at unloved for most of a year. The SP then succumbed to "buy on the rumour, sell on the news", during which I disposed of about half my holding and replaced them near the bottom of the retracement for the ride back up, which I stated I was doing at the time on the BVC BB. I anticipate a further SP rise leading up to and/or after the Final Results in Mar 06.

Although BVC's SP has moved up virtually every day for over a week (ignore confused SETS figures), the BritishBull website warns that 'BVC has a long-legged Doji that means a loss of direction and is now a market with a firm decision to try its lower end'. Don't know whether their comment is just being rude or they have something meaningful to add, but even if correct such advice seldom has any shelf life. It's noted that they've now classed TRT as a 'Confirmed Buy' from a 'Buy-IF', by virtue of Fri's SP rise. Notice also that when BritishBull confirm a price, they use the SP 'before' it moves in the chosen direction. We'd all love being able to buy or sell at the price a share stood at before it moved further in our favour and also trade at mid-price without the cost of a broker's fee or stamp duty!

TRT posters are much more circumspect compared to BVC and most other BB's where there's a prominence of dreamers with fairies at the bottom of their garden. Increasingly of late though, the TRT BB has undergone a bout of irrational pessimism in my view based on the impatient expectation of newsflow, which has gradually created the adverse sentiment that is reflected in the current SP. If anyone had relied upon the SP, shareholder mood or general market attitude for guidance on BVC during quite a lengthy period, they'd never recognise the real underlying value that existed and the same applies for TRT.

There's little doubt in my mind that TRT's obvious potential will be realised in the SP during 2006 and it's just a matter of continued patience. With BVC, it was patience while awaiting the Interim figures, whereas with TRT it's the much spoken of RNS's.