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Morning all,

Remember that game that we used to play called opposites day, well the US markets sure do. After a 106 point rise on Black Caviar Tuesday they came back Wednesday and gave it all back. The theory goes that as the US economy picks up then the QEIII prop that has been flooding the Dow with cheap money will come to an end and that is not good for equities. Expect some weakness again today. Goldman Sucks big switch was in evidence yesterday as the thundering herd piled into BHP.Will it last..Probably not as Iron Ore collapsed last night to $113 a tonne and to rub salt into the wounds the Aussie dollar rallied as the US markets fell. The only good news out there was in the Gold market which seems to like it when the Dow falls.

We also saw oil fall as well as copper so the only light for our market today is if the banks come back into favour…Now you all know I have been suggesting its worth moving back into banks on this dip. Well I still do nothing has changed but play it on the back foot and look out beyond the next few months..these are core stocks in any portfolio remember Einstein from yesterday..compound interest…well that’s the banks…they are solid businesses ok they may have got a bit expensive in the last 18 months but if you missed out on all the fun then this may be the window after they have all gone ex div to accumulate a few.

Idea of the Day

My Sell in May idea has worked out despite some moments..now what is the strategy going forward I hear you say?..well, if you have been following my rants in the morning you will be aware that I believe that the next quarter is going to get harder than the first…no big gains in the banks ,no big gains in resources and the election looming..good to see the pollies with their snouts in the trough again..is Canberra another world?Anyway caution is required going into the next period there will be some good opportunities to get set for the end of the year rally beginning straight after Abbott gets elected PM and Julia gets posted to the Vatican to atone for her sins! So my best advice is don’t rush in bide your time,pick stocks you like and prices you are happy to buy them at..I would still look to the yield plays although Goldmans suggest not but its going to be hard to go past 6% fully franked yields as rates stay low and deposits get scrunched!

Oh and don’t forget those stocks that will benefit from a lower Aussie Dollar…looks like the trend is set to take us down to 90 cents with all that entails.You know the stocks…if you need another list let me know…

Things to make me go all Eddie McGuire!!

1.Couple of numbers due out at 11.30 today..will be important for the Dollar..am expecting disappointment..
ABS private new capital expenditure and expected expenditure for March quarter –
ABS building approvals for April.

2.Good to see the Westfield boys defend their salaries..they are worth it…apparently..course they are ,aren’t all CEO and Chairman. 9% of shareholders voted against the money the Lowy family get paid..really? Only 9%!

3.Who said China was slowing down…certainly in Macau things are pretty good still with the Whales rolling in..at Sky 32, an elite oasis of luxury on the 32nd floor of the Galaxy Macau casino, offers commanding views, a waterfall, a bar with vintage single malt whiskeys – and six sumptuous rooms where players must commit to betting at least 10 million yuan ($1.6 million).All good there then!!

4.We have finally built the “Casino at the End of the Universe.”Says ‘Mark J. Grant who wrote a book called Out of the Box’

April’s margin debt in America now stands at an all-time record of $384 billion. Forget the summer of 2007, sub-prime mortgages are but a forgotten and distant memory. We are here. We made it. This is the biggest casino ever built!
This isn’t Vegas.

5.ANZ’s $425 million share buyback makes it the third of the big four banks to announce capital management in the past six months, underlining the strength of Australia’s major lenders and raising investor expectations that NAB will soon follow suit. The announcement by ANZ on Wednesday came as Standard & Poors said credit default swaps (CDS), which measure investors’ perceived riskiness of a bank, for Australia’s four major lenders hit three-year lows.

6.BHP Billiton said the era of expansion in the Australian coal industry has ground to a halt. Industry executives and investors expect few if any of $73.5 billion of planned projects will be developed amid market conditions worse than during the global financial crisis. The world’s largest coking coalminer, BHP Billiton, will complete current expansion projects approved when prices are higher, but has all but ruled out any further growth in the short to medium term.

7.Wesfarmers CEO Richard Goyder says the market’s short-term focus on dividends and capital returns won’t stop the $42 billion conglomerate investing for growth, but he has all but ruled out a big takeover deal such as the $19 billion acquisition of Coles in 2007. Mr Goyder said Wesfarmers would not be “seduced” into returning excess capital or buying back shares to satisfy the market’s focus on capital management and yields.

8.Those canny investors that piled into ibonds from Apple are feeling like they may have bought a lemon rather than an Apple. Certainly a sour taste as the irrational exuberance for all things Apple has crumbled for those investors.Down about 11% on 30 years so far !! And 7% on Ten Years..now I diont even reckon Apple will be around in 30 years..look at Nokia and Blackberry..and the Dodo!!

9.And good to see last night that Zombieland has embraced the extend and pretend philosophy and given many Euro countries more time to get their budgets in order!They now have until whenever…whatever!
And finally…thank you to everyone who has sent me jokes..I am overwhelmed…makes my job far easier..

So here’s today’s one…and all done in the best possible taste!

Patrick, who was on holiday from Ireland was on Bondi beach and couldn’t seem to make it with any of the girls.
So, he asked the local lifeguard for some advice.
”Mate, it’s obvious,” says the lifeguard, “you’re wearing them old baggy swimming trunks that make ya look like an old geezer.  
They’re years outta style.
Your best bet is to grab yourself a pair of Speedos – about two sizes too small and drop a fist sized potato down inside ’em.
I’m tellin’ ya mate…you’ll have all the babes ya want!”
The following weekend, Patrick hits the beach with his spanking new tight Speedos, and his fist sized potato.
Everybody on the beach was disgusted as he walked by, covering their faces, turning away and laughing, looking sick!
So Patrick went back to the lifeguard again and asked him,
“What’s wrong now?”
“JAHEESUS!” said the lifeguard, “Mate. The potato goes in front!”

Have a good day




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