Of Mountains and Markets
12/14/2004
Don't be Bambi - don't get caught in the headlights of impending doom. Move out of the way - close your trading position if it is going the wrong way. Prayer does not move markets. It may move mountains, but it has no effect on markets.
All in all, not a bad year in the end for the FTSE 100 coming into closure. Interest rates probably not up as much as suspected and now probably on hold for a couple of months at least thanks to stability in the housing market (for which read declines), and sterling appreciating relative to the dollar.
Stock? Sectors? Steel has been the runaway success. For US investors have a look at US Steel. What about for 2005. Well, despite fears of over-capacity, I think we're safe in 2005 on the sector. Real Estate sector is up substantially too. Next year? Should be less strong given rising rates. Aerospace is the third best performing sector, up 32%, thanks to Hampson, Chemring. It'll still be a dangerous world in 2005.
Leisure Entertainment and Hotels has been the fourth best performing sector. Will be spend as much in 2005. Despite rising debt, I think we will - funded by cheaper money, more debt and some rise in incomes thanks to a growing corporate sector.
Tobacco is right up there - and continue to be a favourite as the Chinese take a deep inhalation of Imperial, Gallaher and BAT.
Momentum
Looking for the pure momentum price plays, ignoring value and growth for a moment the strongest trends are in the following and are worth examining: Capital and Regional, Wolverhamption and Dudley (although with recent rises, some pull-back is in the offing), Enterprise Inns, Topps Tiles (been mentioned by me before), ARM (above 108p), HIT (looking to get to 300p).
Value-Growth
On my value growth criteria which are based on stocks meeting revenue and profit growth and good value based on criteria such as price earnings growth, the following names come up. Remember they are for a 6 month outlook: only three this week - but they have been on the radar in previous weeks adding to their credibility: Speedy Hire, Dart Group, Hunting. Nothing like consistency. If you've been a regular follower you'll know the significant gains the former two have delivered.
Crazy Small Stock
These are high risk volatile stocks which could move sharply higher or move sharply lower in my view, but will almost certainly not stand still. Names on the radar include SCi Entertainment, Workplace Systems.
Also, if you would like a free multi-media CDROM on 'Investing Better' posted to you then drop me an email with your postal address to alpesh@tradermind.com.
Book
Got a good little interesting read this week (it's on the ADVFN bookstore too) and is a bit like Jordan - a good Christmas stocking filler (I know, terrible joke, but try sitting in front of the price of Sterling/Dollar all day and keep a sense of humour!). Anyway, the book is 'Investing with Anthony Bolton' - one of the few UK fund managers whose annual returns are as good as mine!
Spreadbetters
Spreadbetters and futures traders often look at hard and soft commodities. Here's my quick take on the action for the week ahead:
- Copper: Neutral (called wrong last week as said down.).
- $/£: down (called mixed to toppy last week, and it fell)
- Crude Oil: Down. Said down last week and it fell.
- Dow: Neutral (called down last week and it shot up belatedly)
- Gold: Mixed to down (called Mixed to down last week - and it went down).
- FTSE 100: Neutral (called mixed last week and correct)
- Soyabean Oil: Neutral to up. Said down to mixed last week and it rose.
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