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Morning all,

Once again the Fiscal Bluff is dominating thinking. The Big man Obama is now sending Tim Geithner into bat for him as optimism emerges that there will be a settlement to this issue. The people are watching. We need to see a fine example of putting the country and the economy before partisan politics…this is what we want ..when do we want it ..now! I firmly believe that the bluff is just that, these guys have seen what happened last time they played chicken..downgrade to sovereign rating..they will not risk it again. It will be sorted..the can will be kicked down the road as it is in ‘Zombieland’. Why sort out a problem today which can be sorted out by another set of Politicians once this lot are safely ensconced at a new job at Goldmans! Call me a cynic but it’s just the way it is.

Good to see media stocks perking up…they have been very oversold and are looking interesting from that perspective as well as on corporate action fronts.Now I have been on TV recently talking Fairfax and Seven…both deserve to be higher and they are moving that way..let’s not forget that FXJ has a great suite of digital assets if only they could find a way for you and I to pay for them..they will…SWM could even be privatised as could TEN so no upside in being short these now…at least at these prices…still feel TEN is the dog in the pack but it is management that needs to look at itself before it destroys its franchise completely..good to see the Simpson back at 6 though!

To our market today..all eyes on BHP as the AGM takes place today..maybe we shall get some news on Marius’ future but think we shall see an up 25 day before wilting again..the market is creeping higher but it is two steps forward one step back as we approach the cliff….gold shares likely to be under the kosh following big falls last night as traders fretted about the cliff and demand for commodities..I think the real reason is everyone is long..it’s a crowed trade and nobody likes them!!

Idea of the Day

Yesterday I spent a happy afternoon at an energy conference..BRU presented as well as KPL ,AWE and ROC.Now I have been to my fair share of BRU presentations but usually by Eric Streitberg, Eric the Viking, and his son Tom has been along for the ride…well yesterday it was all Tom..I can safely say the company is in great hands..very impressive ..in fact by far and away the most impressive focussed story of the day…its simple really, they have all the land in the Canning Basin..its huge..if you want in, talk to us..and we are finding lots of gas and oil!!The presentation was wholly geared for a US predator to pay big for an area as big as Texas!I remain a fan and would use any weakness to continue to accumulate..this one will be taken over in the next two years!!And at a big price!!!

If you do not own any ..rectify in the near future!!!

Things to make me go all Klipperty Kloppers!

1.BHP AGM today!

2.The big boys are hurting… Rio Tinto will cut even deeper into its cost structures after announcing plans to cut $5 billion in costs by the end of 2014.

The campaign comes after a year of steep cost cutting that saw hundreds of jobs lost in Australia, particularly the Sydney corporate office, and will see the company’s exploration budget cut by $1 billion.
3.Good to see Boris Johnson in action again..the London High profile Mayor has berated the French when they told Mittal(World’s biggest steel maker) they did not want them in France..  ‘Venez a Londres, mes amis’.”..we need you!

4.The dog fight in the skies between Alan Joyce and Geoff Dixon looks set to escalate into a full blown aerial battle as QAN pulls the pin on Tourism Australia just cos Dixon is in charge!

5.Whitehaven Coal: Major Shareholder the ‘Big Bogan’ is believed to be at risk of losing his $A560m stake in the company. Nathan Tinkler has until early December 2012 to make a debt repayment of $US200M, with creditors expected to seize the WHC stake in the absence of a payment. It is estimated that Tinkler owes creditors about $A700m in total. The falling price of coal has reduced the value of Tinkler’s holdings considerably, forcing him to refinance,

6.JB Hi-Fi: will pursue its expansion plans in spite of a poor reaction from investors. The consumer electronics retailer plans a chain of large stores that will also sell whitegoods, cooking and small appliances. The stores will trade as JB Hi-Fi HOME, capitalising on the strength of JB’s brand. The stock fell by 5.5 per cent yesterday after the company confirmed speculation about the strategy. CEO Terry Smart said it had to take advantage of opportunities and take a long-term view

7.In KCN…PT J Resources Asia Pasifik, an Indonesian mining company, has offered to acquire the Chatree gold mine in Thailand from a company backed by KCN. Gavin Thomas, chief executive officer of the miner, said it has received “numerous” offers for the gold mine over the past 24 months. The mine is run by Akara Mining, which is 49 percent owned by KCN.  Thomas declined to confirm the bid from J Resources, or say if it was among those that KCN has rebuffed

8.For those of you that like gold shares and I include myself in that one, a friend sent me a great piece from Baker Steel about why the valuation of gold shares against the metal price is so awful..the simple reason they talk about is the lack of dividends. This coupled with the growth of Gold ETF’s has taken away any premium on gold shares..why own producers that have production problems ,high costs and disappointment etc  when you really only want the exposure to Gold..

“Total gold ETF assets have reached nearly US$140billion,” According to the Chairman of Barrick Peter Munk…a massive figure!

The answer according to this paper is dividends!! Gold producers must pay dividends…. simple as that! The Gold ETF does NOT so it’s the only way to attract some of that 140bn bucks!!!

And finally….for my Scottish friends and I have a few!!

In the back woods of Scotland, Ian’s wife went into labor in the middle of the night, and the doctor was called out to assist in the delivery.

To keep the nervous father-to-be busy, the doctor handed him a lantern and said: “Here, you hold this high so I can see what I’m doing.” Soon, a wee baby boy was brought into the world.

“Whoa there Ian!” said the doctor. “Don’t be in a rush to put the lantern down…I think there’s yet another wee one to come yet.”

Sure enough, within minutes he had delivered a bonnie lass.

“No, no, don’t be in a great hurry to be putting down that lantern, lad…It seems there’s yet another one besides!” cried the doctor.

Then Ian scratched his head in bewilderment, and asked the doctor: “Do ye think it’s the light that’s attractin’ them?”

Have a great day

Clarence

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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.

 

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