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Morning all,

A day of rest perhaps as the Geniuses of the economic world got the US GDP numbers completely wrong. Missed it by that much! Anyway that was enough to derail the Zombie’s and the US to some extent although nothing significant. Uncle Ben was also in the news with his plan to keep doing the same thing at the Fed because the weather has been bad! Isn’t the definition of madness doing the same thing and getting the same outcome everytime even when it plainly isn’t working! Apparently the reason for the US downturn in the last quarter was Hurricane Sandy and other weather related events. Of course Military spending was also down as the debt deadline loomed. Just shows what can happen when the Military stops spending, no wonder they are worried about the budget deficit..no money left for defence spending.

Anyway back to our market which has had 10 days up ..most since October 2003…so maybe today it ends..there is still a lot of underlying strength as we approach reporting season so any pullback will be muted. Still 4900 on the index is none too shabby and has been a great January. As with all good parties a few people are now wanting to jump the fence and get in. The stragglers may have missed the best times and as I have said sometimes it’s always good to leave the party before trouble starts..Have been looking for it to hit 4950 before march…should still do it but reporting season may be a little trickier..my advice to companies is don’t disappoint!

Themes remain the same as 2012 for the time being, safety coupled with yield..Banks and TLS but it’s a crowded trade and requires discipline not to pay too much and the FOMO (Fear of missing out) looms large!. Always hard to ignore your neighbour getting rich..brings out the greed in all of us!!

Idea (riddle) of the day FXJ

Something to think about in this brave new world..

Realestate.com.au-Valued at $2.7bn

Seek.com.au-Valued at $2.7bn

CarSales.com.au-Valued at $2bn

Now there we have FXJ valued at $1.3bn…now I know they have all that pesky content and those journalist people that have to be paid but do the figures add up ..I think not…they do have a lot of digital websites and if they could only get their fingers out then maybe they could achieve the kind of success that these three, yes only three web business in Australia have!!

I do believe there is material upside in FXJ if they just got someone in that knew how to run a digital business…there is talk in the press of Mark Carnegie and his band of merry brothers agitating now at Fairfax for more change given their success at QAN..not sure they had any success there but it’s a nice idea!!Anyway I like FXJ and would recommend building a position in it for the longer term…does seem cheap compared to the competition..they should pay some Russian Hackers to take down the other web sites!!

Things to make me go all ‘Trading Places’

1. In a true ‘Clarence Beeks’ moment last night as Orange Juice rallied the most in five months on the Florida crop reports.

2.FDA advisory committee voted 14-0 that Pharmaxis’s Bronchitol doesn’t have sufficient data to support proposed use in improving lung function in cystic fibrosis patients age 6+.Not good ..stock will be hit hard..this is not the final decision but  will knock confidence big time..

3.Currency wars are now really kicking off as the Chinese start to niggle the US about their money printing policy. A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its economy if the world is to have confidence in the dollar. “There will be no winners in currency wars. But it is important for a central bank that the money goes to the right place,” Li ,the chairman of China’s sovereign wealth fund, said.

4.The Italian Banking scandal is getting bigger and starting to hit the front pages.. The Bank of Italy under former Governor Mario Draghi spotted accounting irregularities that allowed Banca Monte dei Paschi di Siena SpA to mask losses more than two years before the lender was forced to say it will have to restate profit….if Super Mario knew why didn’t he say anything eh?

5.Going to be a fun couple of days in court today as the Obeid clan takes to ICAC..when Eddie said he resigned to spend more time with his family, probably didn’t think it was going to be at ICAC!This one smells so bad!!Always wondered how Politicians on 200,000 a year manage to amass vast fortunes with only this as their income..seems a bit fishy to me.

6.227 days to go until the Federal Election….bring it on..bring it on..pleeeease and quickly..not sure I can bear these buffoons in Canberra campaigning on both sides for 8 months!!

7.Few things happening today..

In economics news:

ABS Private sector credit for December

ABS International trade prices indexes for December quarter

HIA New home sales, December 2012

 

In company news:

Woolworths second quarter sales results

Origin Energy second quarter production report

Lynas Corp second quarter activities report

Orica annual general meeting

 

8.Scary but true Polish is now the second language in the UK!1% of the population speak it as their only language…gotta love the EEC.

 

9.Shane Warne has tweeted his plan for Cricket Australia…luckily he is the only character in his tweets!

 

10.faceplant has done it again with a big slide in profits and the stock has fallen 11% after hours..much prefer to be a buyer of Apple at these levels!It is a proper business rather than a social media site.

And finally…..

Some guy knocked on my door today and said, “I have a parcel for your next door neighbour.”

I said, “You’ve got the wrong house then mate.”

Have a great Thursday

 Clarence

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