Good morning,

On my twitter feed I have just seen that the Euro Finance Ministers have knocked back the Private Investors proposal..don’t completely trust twitter but if it’s true(looks like it is) then the market will be under pressure. European markets rallied last night whilst the US focussed on the mythical ‘Pushmi-Pullyu’-the creature from Doctor Doolittle which was pulled by opposing forces and went nowhere..at the moment the markets feels a bit like that. The US is undoubtedly improving whilst the EU is heading for a train wreck. In fact it seems that there are more credit downgrades from S&P on Euro Banks so weakness may prevail.

The SPI last night was positive up 13 but that may be the best of it in light of the Greek tragedy..Good commodity prices and Gold and Silver at 6 week highs..Oil is looking interesting with the Iranian Embargoes threatening the Gulf of Hormuz..its 20% of the World’s oil goes through there so any disruptions will send the oil price higher..$120 oil maybe?

Our market still looks somewhat cheap compared to the overseas markets and still struggle with 5800 FTSE in an economy that is heading into recession whilst the ASX200 remains at 4200..weird…but the high Aussie dollar is killing this country..the car industry is the latest to feel the pain but retail, tourism, education, manufacturing  and any exporter are really hurting..AUD/US at 1.05 again so no relief in sight..Toyota latest to sack workers..more to follow..

I am still somewhat concerned about the markets around the World and feel that income stocks are a great place to be..I have an income portfolio that I can send to anyone interested..but a few of my favourites are there TLS, MOC and the banks of course!

Another takeover announced yesterday with Ludowici a mining services company, being bid at twice the price! Just shows how attractive some of the picks and shovels guys are for overseas players trying to buy growth in the Resource boom of Australia. I am a fan of NWH but have been reluctant to chase it above 2.60 but that may be a little too cheeky and will have to adjust my price up to a buy at 2.70.

On the subject of takeovers I have enclosed our partner Morningstar’s report of Small Cap possibilities for 2012…worth a look..BBG may be in someone’s firing line if they can just get the debt sorted!!

Stay Classy Sydney!

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