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Morning all,

Fair is Fair and Foul is fair! That’s what the quote should be in the US anyway..bad numbers mean more money from Ben, good numbers just mean good numbers…

Win /win until…..anyway I have been in the markets long enough to know that as the bad numbers pile up and they are ignored the marlet will push higher if it wants to but eventually it will reverse and these days of computers trading so quickly it is vicious…only have to look at Japan to see that ..after a 45% rise this year it has fallen 10% in a matter of days…with 2000 point moves intra day…volatility is back…anyway to our market…seems everyone from GS to UBS has now announced the yield trade is dead and resources are the place to go..of course this announcement is after they have fallen 15% in the banks..anyone would think they shorted before they got vocal and are now covering as everyone else catches up!!cynical not me…anyway yesterday we saw the Banks rally off their lows and the support that is 6% yields is quiet hard to go past….I still think the banks TLS and other yield stories are a good way to go…can’t get too excited when Iron Ore is being crushed ,Coal is a dirty word and Oil is going nowhere ..the only positive for the BHPs and RIO s is the lower Aussie dollar…both with new management so I suspect that the companies will look very different in two years time…

Last night we saw Gold pop..maybe it’s not dead after all..expect some picking over the ruins of gold stocks in the coming few days…although how long it lasts remains to be seen given their stretched funding and tax loss selling to come.

My call today is up 30 as we close out the month..it has been a sell in May month for sure..especially in the banks…I am still of the belief that we will track sideways to slightly down in the coming months as election fever takes hold…Japan has more to fall..another 10% until reality bites…Aussie dollar has more to fall 92 cents see we shall…sorry gone all Yoda there…

Idea of the Day

The TLS question? To sell or not to sell…that’s is the question..there is a school of thought that as overseas punters have so many TLS they are going to continue to sell and lock in their profits…the asbestos issue has reared its head out West as the NBN contractors use TLS tunnels to put in the new fibre and the job cuts that they will do are a sign of more money to be written off on Sensis etc…yeah I know all that but TLS has never been about massive growth…it’s a steady ship in times of trouble…domestic based business that is numero uno in mobile ,getting a big fat cheque from the Government(whichever one) for its copper and virtually guaranteeing 28cents div for life ..well not quite life but certainly for Thodey’s reign!!It’s always been about the yield..its 5.9% fully franked…now call me old fashioned but if the economy is hurting and rates fall, doesn’t that yield make it more attractive…maybe the overseas guys will leave for sunnier climbs but there is still lots of money in deposit accounts that will start to see lower returns..these baby’s are a buy for income seeking missiles…may be an idea to use current weakness to accumulate…could be wrong but time will tell!

Things to make me go…..Sayonara!

1.Big news …the special one is returning to manage Chelsea!!yay!!Welcome back and Tom Waterhouse has apologised for being everywhere…the gambling bete noir is going to scale back his mug on TV ..Peter Fitzsimmons will be chuffed to bits!!

2.Yesterdays Capex numbers conformed what every mining services company has fessed up to in the last two months..the resource boom is over..it’s transistion time boys..whats left?Let’s hope the cupboard isn’t bare!

3. The most extended sentiment I’ve ever seen is 98% bearishness mid-March of 2009. I’d say the bullishness today looks remarkably similar to the bearishness of March 2009, said Jeff Gunlach from Doubleline…now I don’t really know who this guy is or what he has done for humanity but he is higher profile than me that’s for sure so I am happy to listen…everyone is long in the US, never going down in our lifetime…I just wonder!!!

4.French jobless numbers!

French jobs

The number of people out of work in France hit a record high in April, the daily Les Echos said on Thursday, casting more doubt on President Francois Hollande’s pledge to reverse a long-running rise in unemployment. The number of registered jobseekers rose by about 40,000 in April from March’s previous high, the financial daily reported ahead of the official publication of the figures later on Thursday.

5. ASX: ASIC has shelved plans to force high-frequency traders to “rest” small orders on the market for a set time and meet a minimum size on dark-pool trades, in a win for sophisticated traders and banks. ASX CEO Elmer Funke Kupper told the Stockbrokers Association conference ahead of ASIC’s backflip that the proposal would not work and be costly to implement…for whom ?

6.Sorry Gerry…but it’s structural..not a fad… Online retailers’: sales are continuing to vastly outpace traditional merchants, with internet purchases by Australian shoppers up by 23 per cent last month compared to the same month a year earlier.

7. And who are you going to believe analysts or the company….what’s it gonna be boys yes or no?…Wesfarmers: shares have taken a beating since Richard Goyder ruled out a hefty special dividend or buyback at this week’s strategy day.  The stock had run hard since anaylsts put out a report saying Wesfarmers would have $3 billion in excess capital in 12 months’ time, making it a capital management candidate.

8.Good to see how easily you can come unstuck in public life..there is of course Eddie and his mouth and then there is Tony and his letter supporting the pigs in the trough political parties…let’s face it the parties are in a mess and if they cannot sort out their own finances how do we expect them to sort out the country’s!!!Really guys it’s not a great look…think Clive Palmer should be given a good at running the country for a while…or Gina…or Andrew..in fact anyone but Tony or Julia!!

And finally……

Instead of a joke this morning I thought I might mention that on Doctors orders I am getting fit and have decided as a goal to run the City to Surf…never run that far before so it’s a challenge to say the least…so this is where you the reader comes in..I am doing it for Starlight Children’s Foundation and would  love to raise $700…so here is the link to donate if you feel so inclined…hoping to do it and finish without suffering some kind of episode…here is the link and would love to get some dosh in for a good cause..

City to Surf Sponsorship

Jokes back next week…Have a great weekend




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