Morning all,

Expect some positive moves early on as the bargain hunters will be back in after the rout yesterday. However I am not sure it is going to last or have the same conviction as usual. Some of the gloss is rapidly being taken off the market as it goes ex div…News out of China yesterday was somewhat disappointing and shows that their economy is still struggling a little and the powers that be seem in no hurry to stimulate like their US ,UK, Japanese or Zombie cousins. Can’t imagine why…anyway once again the Dow rallied on hopes that stimulus will take care of everything.

Expect the banks and WOW,WES to bounce first thing followed by BHP/RIO/FMG as they did get pummelled yesterday and the World did not end.  Looking at the chart though ,and I am no chartist as you all know but it does look a little double toppy to me.

Any further weakness I think would signal trouble at mill..

The markets continue to be kept at these levels by the Fed pouring money into the system..the problem is that it just keeps buying the same assets and not very much is actually trickling down to Main Street..Uncle Ben’s theory that if you chuck enough at the big boys some of it will find its way into the real economy…well it is but the big boys seem to be creating a bit of a bubble in some asset classes along the way…still the US has $16.6trillion of debt ..eventually Ben will pull back and the artificial prop will be removed..how he manages that is the 64 million dollar question! badly and it will get ugly..or perhaps he won’t..leave it to his successor perhaps…a massive hospital pass in the true tradition of Alan Greenspan..remember him?

 

RBA meeting this afternoon but no change is the bet..expect the market to pause before the meeting result.

Idea of the Day BUY INA below 30 cents for a six month  move to 36!

We saw a small company yesterday called Ingenia.INA is the code..they are a manager of retirement villages. Currently trading at a discount to its NAV of 35 ish. Expect this gap to close as the company starts to deliver on its promises..they appear to be doing really good deals at the moment but that benefit has been slow to feed through to shareholders. The CEO has staked his future on delivering for shareholders as the uplift pays off..this is a long haul but buying under 30 will be rewarded over time…expect it to be a 6 month slow grind though..not an instant hot like the TEN or others I have talked about…this must mean that I am struggling to come up with new super doper ideas..if you think that you are right..still happy with the same old ideas I have had for a while..it’s just the prices that change..as my old boss in London said once..they are not numbers on doors!

Things to make me go all Rooty Hill!

1.Looks like the election campaign is kicking off 6 months early. Julia is out west trying to influence the three people that have not made up their minds to vote for her. Maybe worth examining your TLS positions as this one is set to become a political football courtesy of the discussions on NBN..I would look to exit holdings around 4.55-4.60 as feel there may be better opportunities elsewhere..love the business ,its going very well but politics is a dangerous bedfellow and could run into some NBN headwinds.

2.Manchester City beat Aston Villa 1-0 to keep in the race..well it’s pretty much over for top spot..but United against Real Madrid is going to be a cracker.

3. Origin Energy is preparing for its first senior leadership change since it was formed 13 years ago with chairman Kevin McCann expected to step down in the next 18 months. Mr McCann will not seek re-election when his term expires in 2014. Both Mr McCann and chief executive Grant King have held the senior roles at Origin since the company was spun out of Boral in 2000.

4. Australia’s biggest miners will spend $US213 billion in capital on new and existing projects over the next seven years, more than half of it in this country, despite a new focus on costs.Commodity prices have fallen and investment levels have peaked but the third leg of the resources boom – the boom in volumes – has yet to run its course, analysts say.

5.Aussie miners and explorers will be watching developments like these with some fear.. Prospectors and mine developers, the lifeblood of the wider $1.5 trillion industry, are running low on cash as funding dries up, increasing the chances they’ll need to consider sales and mergers to survive. So-called juniors have enough cash to last 5.7 months, according to the median multiple among 1,273 companies with a market value of no more than $500 million, data compiled by Bloomberg show. That’s 25 percent less than a year earlier, according to the data….the theory is that  this will force more mergers and takeovers..we shall see but at the moment the sector is under stress and shorts are having a ball..

6.The Bank of England’s monetary policy committee will take its monthly vote on Thursday and while it is likely to leave interest rates on hold at 0.5 per cent, economists believe there is a strong possibility it will increase its quantitative easing program by £25 billion ($37 billion), taking it to a total of £400 billion.

7.According to TrimTab’s CEO Charles Biderman, corporate insider purchases of stock have hit an all-time low, and the ratio of corporate insider selling to corporate insider buying has now reached an astounding 50 to 1….

8.Investors reduced bearish stock bets to the lowest level since at least 2007 as the bull market in US equities begins its fifth year. Short sales in the Standard & Poor’s Composite 1,500 Index fell to 5.6 percent of shares available for trading in February, down from a record 12 percent during the credit crisis and the lowest ever in data compiled by Bespoke Investment Group and Bloomberg starting six years ago. The last time the number of shares borrowed and sold short approached this level, the equity gauge lost 3.3 percent in the next three months.

9.Italian debt jumped in 2012 to 127 percent of gross domestic product from 120.8 percent a year earlier. As Bloomberg notes, that’s the most since 1924, when Mussolini won 64 percent of the popular vote in elections that opposition members said were marked by irregularities and even more strangely the Government has misunderstood the concept of austerity as spending has risen almost 3% in the last three years…Greek youth unemployment has now reached a scary 59% and Italian Unemployment was 11.7%…

 

And finally……….

 

A man escapes from prison where he has been for the past 15 years. He breaks into a house to look for money and guns and finds a young couple in bed. He orders the guy out of bed and ties him to a chair and then whilst tying the girl to the bed he gets on top of her, kisses her neck, then gets up and goes into the bathroom.

 

While he’s in there, the husband tells his wife, “Listen, this guy is an escaped convict, look at his clothes! He probably spent lots of time in jail and hasn’t seen a woman in years. I saw how he kissed your neck.” If he wants sex, don’t resist, don’t complain, do whatever he tells you. Satisfy him no matter how much he nauseates you. This guy is probably very dangerous. If he gets angry, he’ll kill us. Be strong, honey. I love you.”

 

To which his wife responds, “He wasn’t kissing my neck. He was whispering in my ear. He told me he was gay, that he thought you were cute and he asked me if we had any Vaseline. I told him it was in the bathroom. Satisfy him no matter how much he nauseates you. Be strong honey, I love you too!!”

 

Have a good day

 

Clarence

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