Morning all,

Apologies for the lateness of this email but I have been seeing two Oil companies today..COE and BRU..so will write something about them in more detail when I have processed the info.

As to the market..it’s May..time for a pause today after the euphoria of yesterday’s ANZ result…Banks were the only game in town and today some reality has returned..the big rise in ANZ profits was due to the sacking of lots of people..there is a limit to how long that can go on for. Their Asian strategy is not really producing the goodies as yet but they hope they will. Bad debts also a drivers as were mortgage margins. Not huge organic growth though…one of my fellow commentators who is far higher profile than me just whacks the banks on a 5% yield and then says that is where the prices are going to go..maybe he is right but if you own the bank shares keep them, if you don’t I am still not sure I would be piling in based on a flat 5% yield across the board!

Anyway as I write this, I know its late, the market is down 30 as a result of Chinese PMI coming in below estimates…I still believe that the May to September half will be worse than what we have seen so far this year…unless of course Charlie Aitken is right and the banks do go to that yield in which case I will look like a goose..not for the first time I hear you say!!

Idea of the Day

BRU came in to our office today and as you all know I am a fan….finally got to meet the new MD and impressive is a word I would use…this is a company in transistion…transistion to being a very large company in the years to come but after a  period of incredible success which I think surprised even them, they are now catching up with themselves..they are putting in place the structures and philosophy that will last them 20 years and transform the company..the market is short BRU as they believe that they need to raise hundreds of millions of dollars at some stage..this is wrong, the market is wrong…they will do farm outs after they have increased the value of their projects ..they will spend 20-30m to increase value 10 fold…I remain convinced these are a long term buy and will be the next WPL or STO in ten years..the new guy is the man to take this company a long way..Eric Streigtberg is still very much involved but Keiran Wulff gives this more credibility than just a  lucky few wells in a huge area…one to continue to accumulate on the back foot!

Things to make me go …WTF?

1.Apple has become an investment bankers dream..they have $145m in cash stashed away but they have launched a massive bond program to raise $17bn to pay shareholders….so let me get this straight…you borrow money when you have cash to pay to the people you have borrowed the money off…really?..this makes sense does it..of course no banker or broker worth his salt will question the logic of this but it sure beats me!!!

2.And in other weird news….Woolworths has been buying Australian-made Lynx, Rexona and Impulse deodorants from Singapore for 60 to 75 per cent of the price it pays locally. When the manufacturer, Anglo-Dutch grocery giant Unilever, discovered that Woolworths was parallel importing three of its top-selling brands, its first reaction was to shut down Woolworths’ source of supply, rather than negotiate over prices with its largest Australian customer. Undeterred, Woolworths has set up a permanent team to explore further parallel importing opportunities in a bid to reduce the prices consumers pay for groceries.

3.In more parallel worlds.. Gold holdings in exchange-traded products plunged 174 metric tons last month, the biggest drop ever, as prices entered a bear market and wiped $17.9 billion from the value of the funds.

Holdings in the ETPs slumped 7.1 percent in April to 2,275.84 tons, the lowest since October 2011, data compiled by Bloomberg show. The value of the assets dropped to $108.1 billion….this is while the physical is being snapped up in Mints across the World…real people with real money buying real Gold…how can that be!!

4.And at risk of being looked at weirdly…the Tom Waterhouse scandal…if this guy is such an expert why would anyone bet against him..I want a bookie that is an idiot who gives the wrong odds and loses..not a smug Eddie Everywhere boy who knows what punters want..only cos his Mum told him!

5. The manufacturing sector is at its weakest in four years as the strong Australian dollar, rising labour costs and high energy prices continue to hit the industry, a private monthly measure has found.

The latest data strengthens the case for an interest rate cut next Tuesday, after RBA figures that showed continued weakness in private sector credit growth were released yesterday.

6.And the great house price boom seems to be faltering at the mo… Dwelling values contracted by 0.5 per cent over the month of April after posting a solid 2.8 per cent gain over the first three months of 2013, RP Data figures show.

And finally…thanks Hans for this one!!!

Four guys have been going on the same fishing trip for many years. This year, Ron’s wife puts her foot down and tells him he isn’t going. Bitterly disappointed he phones and tells the others that he can’t go.

Two days later, the other guys get to the camping site only to find Ron sitting there with a tent already set up. “Dang Ron, how did you talk your missus into letting you go?”

“Well, yesterday evening, after my wife finished reading “Fifty Shades Of Gray,” she dragged me into our bedroom, on the bed she had handcuffs and ropes!

She told me to tie and handcuff her to the bed, so I did.

Then she said, “Do whatever you want.”

So, here I am!

Clarence

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