When its game over
05/29/2005
As I set off for a week long trip to India to meet venture capitalists and entrepreneurial dealflow in New Delhi, Mumbai and Bangalore, I recall the lunch I had recently with a fund manager from Schroders who manages around $3billion.
He was of the opinion he would become worried about Western equities if he started seeing Indian business people living in the UK moving back to India. I had dinner this week with the Financial Times correspondent for India and I have news for my Schroders fund management friend - we know a worrying number heading back.
Why? Opportunity. What does it mean for UK equities? As ever in times of trouble or turbulence it puts more obkigation on finding the best stocks - that will never change. Even after 9/11 when the markets opened on September 17th, some stocks rose - for whatever reason - and they outperformed for the year ahead.
To change subject, what about interest rates? My view is we are looking at no change until year end. I am surprised by US jobs growth figures which see the market rally. Wait a minute, we thought the economy was weaker. On the US markets, we are almost exactly half way between year to date high and low and that probably sums up the market indecision and balance. Then again we are getting into June and who places big bets over a quiet summer period.
When I look at the FTSE 100 over the past 14 trading days and some of the biggest risers to get a notion forces we see Anglo-American and Corus (demand for their products again) O2, Man (relief that hedge funds not performing too poorly) and Schroders and Amvescap (markets not doing too badly).
What is particularly interesting is that this analysis throws up names like BHP Billiton which after rallying since last year, fell back for the past three months and are now forming a base for a rally probably up another 25% to their highs of February.
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: BAe Systems, Travis Perkins, Spectris, Hill & Smith, Gleeson.
Remember I am targeting about 20-20% with the value growth criteria. Last year it produced 33% return. On my momentum value indicator I have VT Group, Body Shop, Roxboro.
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: Zotefoams, GB Group, Celtic, Titon.
Also, if you would like a free multi-media CDROM on 'Investing Better', which covers spreadbetting, CFD trading and momentum indicators like the MACD, posted to you then drop me an email with your postal address to alpesh@tradermind.com.
Spreadbetters
Spreadbetters and futures traders often look at hard and soft commodities. Here's my quick take on the action for the week ahead:
- Oil: Mixed to higher
- Copper: Mixed to higher
- Gold: mixed
- £/$: Lower
- Dow: Mixed to higher
- FTSE 100: Mixed
- Soyabean Oil: mixed to higher
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