Morning all,

After all the exuberance of the surprise “No Taper” it was inevitable there would be a pullback .Albeit a small one in the US.Zombieland continued higher in reaction and Gold stayed at its elevated levels.Now that Ben has confounded every commentator in the World and confused a few more, it seems his credibility has taken a hit…he did have a chance to start to get us off the sugar hit but he wimped..plain and simple…we had all got used to the hit and probably would have welcomed prudent monetary policy but it seems he didn’t want to risk it…gutless Ben…Yellen will be no better …so maybe QEIII will become like a TPG internet plan..unlimited !!

ben-bernanke

We had a rush of blood to the head yesterday as you would expect and some pretty serious moves in unloved Gold shares…expect them to continue bubbling around as the Gold price was still pretty good last night and the Aussie dollar fell. Not sure the gold rally will last forever so make hay while the sun shines!!!

We should have a small profit taking type day today as we knock on the door of 5300…

Interesting to watch the WA premier last night argue for higher taxes through GST increase…this is the guy that didn’t want the mining tax…apparently he wants us all to pay not just the lucrative miners…think he has installed the new software package called Hypocrisy 1.0…not the first Pollie to do so it seems….anyway after losing their AAA rating seems the WA economy has some issues…here’s an idea for the Government…abolish income tax and replace it with a 20% GST…all those tax dodging accountants gone…GST on all imports over $100 from the net and so much time wasted on tax minimisation put to much better use…Thatcher had it right when she lowered the tax thresholds and rates and actually raised more revenue..anyway I digress!!!

Idea of the Day

GEM..have been a huge winner for me in the last few months with my price target now of 330 being reached…good news indeed for those that followed the story..now our analyst has upgraded her forecast again…But the bigger thing in Child care land is the emergence of corporate activity in this space..ok it’s only in the UK but the Ontario Pension Fund which knows a thing about investing in stable ,dividend paying assets for the long haul(they own a lot of toll roads) have made some overtures to the UK’s biggest chain of centres called Busy Bees…valuing the company at 220 m quid..they have 212 centres..so does this transaction provide a guide to the valuation of our GEM…possibly… GEM have around 205 ish centres and are valued at nearly $900m…seems a lot more per centre…are they really worth $4m a centre…they pay around 4 times EBIT and the last four centres cost them $4m for the lot..so why is the market now valuing them at $4m when GEM buys them at $1m?????There is a question for people far smarter than me…the UK childcare industry is the most heavily subsidised in the World by the Government..now I am not saying our analyst is too bullish with the $4.20 valuation but it’s a great model you have to agree, when you buy something for $1m and then investors immediately give you a valuation of $4m for it…simples!!!maybe it’s the yield…maybe but my target has been reached so time to ease off a little I suspect..Ok in Aussie dollars it’s a valuation in the UK of $1.7m a centre but we are still twice the price..anyway just saying!!!

Things to make me go mmmmm!!!

 

Gold analysts are the most bullish in three weeks after the Federal Reserve’s surprise decision not to taper stimulus increased demand for bullion as a hedge against accelerating inflation and currency debasement. Definitely the top!!!

Biggest news today in the tech world is not the queues for the new iPhone..really?…it is the announcement that a personal jetpack will be available next year..capable of soaring to 7000m and flying at 80km/h…now that I would queue for!!

Great Theft Auto becomes the biggest video game for its first days takings at around $800m…more money in these things than films these days!!

These boys play big games.. BP is at the centre of one of the world’s biggest gas sales agreements, worth up to $100bn (£62bn) over 25 years, after signing a deal to supply energy from a Caspian Sea project that could reduce Europe’s reliance on Russian fossil fuels.

JP Morgan has agreed to pay about $920m in penalties to US and UK regulators over the “unsafe and unsound practices” that led to its $6.2bn London Whale losses last year…..not the end of it either apparently!!!

The International Monetary Fund sees continued sluggish global growth as it reviews its economic outlook, Managing Director Christine Lagarde said. “The IMF will release its updated forecasts in a few weeks,” Lagarde said in a speech today at the U.S. Chamber of Commerce in Washington. “For now, let me say that while we are seeing some signs of recovery, global growth remains subdued.”…these guys have not got it right at all anytime…

A few weeks ago I listed the risks as I saw them…let’s have another look…

1.Syria-sorted..well maybe!

2.German Elections-this weekend but a shoe in.

3.Greek Bailout/Italian Parliament debacle-Ongoing but will be forever!

4.US Budget-Looming.

5.Tapering-Biggie but not in our lifetime now it seems.

6.Indian currency crisis-no one cares.

7.Asian Currency crisis-no one cares.

8.Brazilian Currency crisis-Crisis,what crisis!

9.Australian Election leadership crisis! Tony is da man!!

10.ASX 200 going Ex-Dividend-Doesn’t seem a problem

11.Rising inflation in US-apparently that is good

12.Rising interest rates in US.-Ben has sorted that too!

So does that mean we are out of the woods…well certainly as the risks recede the upside increases…5500/5600 by Xmas is very doable if the resource stocks kick as well…remember my bucket of banks for $100 in September 11 which I recommended ..same time I recommended the bucket of resource stocks..BHP,RIO and FMG…well these were $100 too…now 105 against the banks at 173!!!win some lose some but in order to get to 5600 the Resource bucket has to perform!!!!Just has too!!!

And finally..in the spirit of all times Apple and the new iPhone and iOS7..big thank you to Caroline for this one!!

INSTALLING A HUSBAND

Dear Tech Support,
Last year I upgraded from Boyfriend 5.0 to Husband 1.0 and noticed a distinct slow down in overall system performance, particularly in the flower and jewellery applications, which operated flawlessly under Boyfriend 5.0…

In addition, Husband 1.0 Uninstalled many other valuable programs, such as Romance 9.5 and Personal Attention 6.5, and then installed undesirable programs such as NRL 5.0, NPC 3.0 and Golf Clubs 4.1.

Conversation 8.0 no longer runs, and Housecleaning 2.6 simply crashes the system. Please note that I have tried running Nagging 5.3 to fix these problems, but to no avail…

What can I do?

Signed,
Desperate

DEAR DESPERATE,
First, keep in mind, Boyfriend 5.0 is an Entertainment Package, while Husband 1.0 is an Operating System. Please enter command: ithoughtyoulovedme.HTML, try to download Tears 6.2, and do not forget to install the Guilt 3.0 update. If those applications work as designed, Husband 1.0 should then automatically run the applications Jewellery 2.0 and Flowers 3.5. However, remember, overuse of the above application can cause Husband 1.0 to default to Grumpy Silence 2.5, Happy Hour 7.0, or Beer 6.1. (Please note that Beer 6.1 is a very bad program that will download the Farting and Snoring Loudly Beta.)

Whatever you do, DO NOT under any circumstances install Mother-In-Law 1.0 (it runs a virus in the background that will eventually seize control of all your system resources.) In addition, please do not attempt to reinstall the Boyfriend 5.0 program. This is an unsupported application and will crash Husband 1.0. In summary, Husband 1.0 is a great program, but it does have limited memory and cannot learn new applications quickly. You might consider buying additional software to improve memory and performance. We recommend Cooking 3.0 and Hot Lingerie 7.7.

Good Luck!
Tech Support

 

Excited to be doing Sky TV’s Business week this afternoon at 4.30 with Dr Shane Oliver!!Big time clever !!Will have to be on my toes!!

I am away for a couple of weeks …Bawley Point is not great for communications…

Have a great weekend 

Clarence

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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.

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