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Morning all,

Expect another quiet day in the land of OZ today with resources possibly the sector to be in following higher iron ore ,gold and other commodity prices.Yesterday’s ANZ result will set the stage for banks with no rush to buy unless you are looking for growth. Having said that MQG came out this morning with an update and it looks like their Commodity division is a star performer as it increased its profit from 6m to 220m…good bonus coming Andrew Downes’ way I suspect!!Maybe even the top job!

More bank results next week so should be fun to see their creative provisioning at work….

Our market is still treading water a bit with sector rotation taking the forefront at times..’Mr Myagi’ would be proud of the Risk on/ Risk off..trading strategies….yesterday was TLS day in the sun again..whenever the fear increase so will TLS..

 

The US is now starting to go into election mode with punters positioning themselves for either Obama or Romney..my money is on the status quo to remain ..it seems only a matter of time before Romney shoots himself in the foot and undoes all the good work from his debates!

Idea of the Day;

Yesterdays idea to buy BBG has been a winner so far with a 7% move from the open…I continue to like this one and would expect it to hit the dollar level…then pullback…

But for a new idea…

We had a mining services conference this week at BBY and two interesting ones to catch my eye were IMD and SWK…both good presentations but what really stood out is the way technology is revolutionising the mining industry..IMD has some really good technology coming in that will help drillers around the world..whilst Swick was equally impressive with their rig design and technology..both companies have been labelled with the downturn in Mining services brush but I believe that has been overdone..not as sexy a story or as quick as others but these guys are going about their business very professionally and not resting on their laurels..I would be a happy buyer of both for mining exposure…

 

Things to make me go Appley!

1.How can I not mention Apple…

  • APPLE 4Q EPS $8.67, EST. $8.75 – miss
  • APPLE 4Q SALES $36.0B – slight beat
  • APPLE SOLD 14.0 MILLION IPADS DURING QTR, UNIT EST. 15.3M

This result was enough for the stock to crater down to 585 bucks before rallying to close mostly unchanged..however cracks are emerging in this goliath..these guys are becoming a follower NOT the leader that they were..internet radio was a big announcement..really..ever heard of Spotify guys ..its brilliant or just Digital Radios….Xmas stocking will be full of Ipad minis but at the expense of their big brother perhaps..there are only so many gadgets a man(or women) can have!!I know I have tried!!!

2.The VIX in the US (fear index) fell by as much as 5% but interestingly the number of outstanding contracts tied to this gauge reached the highest level ever with punters betting that volatility will pick up as we go into the election.

3.Not only did team GB do brilliantly in the Olympics but they have helped pull the UK out of recession with their GDP rising 1% far more than expected..strongest growth in five years..they are hoping to rerun the Olympics every year now.

4.In Iron Ore news in the US Cliffs Natural resources fell 10% after shocking numbers!!

5.NEW South Wales’ AAA credit rating is in jeopardy, according to a leading international credit ratings agency, which says that taxes should be raised or assets sold to improve the state’s financial position.

6.In shocking news in the US, a Policemen ,allegedly, has taken up cooking women as a hobby ..rumours have it that he is a big fan of masterchef…he is alleged to have asked his accomplice “How big is your oven?”

7.Microsoft rolls the dice with its new Windows 95 product..this one is going to be a game changer…either for consumers or for the company..something will give..not sure what yet!

8.How is it that Big(or not so big) Jamie gets so much good karma with the NSW Government….and apparently he gave Howzat 8/10…must have been spooky watching it though!!!

9.TLS have paid a huge amount for a small Adelaide Internet provider Adam Internet..lucky seller..it is thought that they will use it to offer a Jetstar service to customers in the internet space.

10.Batten down the hatches…US forecasters are predicting a “frankenstorm”, a monster combination of high wind, heavy rain, extreme tides and maybe snow that could cause havoc along the East Coast just before Halloween.

Hurricane Sandy, having blown through Haiti and Cuba on Thursday, continues to barrel north. A wintry storm is chugging across from the west. And frigid air is streaming south from Canada…. Insurance stocks may be worth a small sell.

And finally…….from one of the great contrarian investors in the last ten years…Hugh Hendry..this guy is not afraid to speak his mind and put his money where his mouth is..of course its not all his money but clients and having made a squillion then he is certainly a man to take notice of ..if you google him you will get an idea of his style..anyway this is the summation of a brilliant presentation to this year’s  Economist Buttonwood gathering…here he goes…

 

“I have resigned from the professional undertaking of coin flipping. I am not here to tell you where gold’s going to be. I have no idea. That’s my existentialism. I am a student of uncertainty, I have no idea where the stock market is going to be. So when I am creating trades in my portfolio for my clients, I am agnostic. I just want to enhance the probability that I make money come what may.”

Needless to say he is long Gold and Short the US and don’t ask him what he thinks of China ..may scare The Black(Wayne) Swan too much!!

Have a great weekend

Clarence

XXX

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.