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Morning all,

In disturbing news this morning I read that John Kinghorn (ICAC and RAMS fame) had his car tyres slashed while he was swimming at Balmoral Beach. The disturbing thing is that he has to  drive to the beach! If Kingey can’t afford to live beachside then what hope is there for mere mortals.! Anyway to the markets peeps..Was up early and on Sky Biz talking my usual rubbish…overnight Caterpillar took it hard after downgrading their forecasts …now why should this have been a surprise..every mining services company in the universe has been hit as miners cut back on Bob Carr like spending…they don’t need the latest and greatest kit to make truckloads of money…it’s about sweating the assets not buying new Tonka toys…BHP is doing all the right things…sweat those assets baby..push it work it…and look at all that lovely cash!!


Anyway on the seventh day God rested had a look around ,cracked a cold one and stoked up the BBQ. So it is with markets and ever shall be. Nothing goes up forever (well except the US debt that is) and so it came to pass yesterday with a 1-2 combo of Inflation beating expectations and news from China that the big banks are setting aside huge amounts for bad debts and the money market tightened. Any excuse to sell in an overstretched market was welcomed…now we need to take a break we have had 7 days straight up..lots of AGMs to comment on and the momentum trades that everyone is chasing are getting a little silly…XRO up to nearly $26 …capped at 3.25 billion…really?

Despite the SPI saying that we will be flat today I would expect to back and fill..we have the Chinese Flash(or not so ) today and all eyes will be on that..especially following yesterday’s movements over there.

Do not be sucked in though the markets will finish the year around 5600 ..any pullback will be brief and shallow..so if you take profits be prepared to get back in…Santa is on his way …have you been naughty or nice? Well have you punk! Sorry bit confused with my Hollywood stories.

Ideas of the Day

Where to find value….well, I would start by looking over the wreckage of the resource sector…I know it’s about as unpopular as  Kevin Rudd at a Julia Gillard book launch but it will turn..maybe not this week, maybe not next but it will turn..one day in the distant future Luke, no one will like Bank shares, no one will want income, they will just want to feel the force(or resource)…they will like well-run gold companies(there is such a beast..look at BDR)…they will buy energy stocks and the World will be a better place…one day…I have liked BHP ..still do !Like Iron Ore stocks in general in view of the continued strength in the price and demand from China.

So have talked SLR …hated, bombed out, nasty chart …but getting in around low 70’s should reward the brave and patient..

Banks will have to produce with their results or they will be in the firing line..mortgage growth good..business lending bad..cost cutting and lower bad debts the growth! Priced too much to perfection perhaps..

Things to make me go mmmmmm!

I asked a WSJ expert this morning on telly..if $85bn a month on QEIII wasn’t really working for the 47m people in the US that are on food stamps what will? He did not seem to understand the question..America where the rich get richer and the poor..well who cares about them anyway right? As long as they keep themselves to themselves!

NCM AGM meeting today will be a doozy!!Rubbish management and performance bonuses..good con eh?

Sydney property prices now average $700,000…crazy stuff…

Maybe this is connected…probably not, but Big Chinese banks have moved to raise their bad debt limits three fold as there are serious worries about the overheating property market again…so why not come to a major city out of China like Sydney or London! Getting the hell out of Dodge perhaps!

Looks like Target has another high profile recruit from the UK in a Marks and Sparks exec joining their ranks..first Gok, now Gill…hope Gillian Ridley Whittle can do better with Target  than M&S…

Tis the season nearly to be jolly and IPOs are upon us…Dick Smith, Nine ,Freelancer etc?Do not get too carried away by pictures of celebrities and beautiful people…easy to do..remember MYR..I do! Like Freelancer  though!!

Talking of IPOs…iBuy: is looking to IPO before Christmas. If successful, this will be the first pure online retail play on the ASX. iBuy sells branded products online across south-east Asia through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time. It was set up by iProperty and iCar founder Catcha Media, which will stay fully invested. The offer is pegged at about $30 million for a market capitalisation of circa $100 million

This one looks set to make interesting reading for a while to come…Brickworks shareholder Mark Carnegie and fund manager Perpetual have teamed up in an audacious move to break-up the controlling shareholding between the country’s largest brickmaker and conglomerate Washington H Soul Pattinson in what amounts to a $1 billion-plus demerger proposition.

HGG Henderson Group is a  London-listed stock listed as one of 7 European stocks to own for 2014 due to higher exposure to Europe in terms of assets under management says one expert…where were they when I was buying and recommending them to clients at 1.70!!Eh?If you want to get exposure maybe AMP is worth a look from an Aussie perspective.

AGL Energy: The solution to the predicted gas supply crisis facing 17.5 million east coast Australians is under people’s feet, the head of utility giant AGL Energy says. CEO Michael Fraser said Australia had enough gas resources to supply domestic businesses and households, but policies that blocked investment in new projects were the problem.

But if you want a Utility stock how about this one.. Meridian Energy’s IPO, the second of the three energy floats by the New Zealand government – is expected to price at about $NZ1.50, or just above this level, on Wednesday afternoon. Meridian is New Zealand’s biggest power generation company and is being sold with a staggering 13-plus per cent yield.

Good to see old Al out and about talking tosh…Greenspan must be pushing his new book and looking to buy a few extra Xmas presents as he spruiks away…couple of classic though from this old fossil…” today’s housing market doesn’t show the same conditions as it exhibited leading up to the housing crash, and is lending stability to the U.S. economy.”And let’s face it he should know as he created the GFC in the first place…don’t forget the Fed has shareholders..it’s not Publically owned!!

Good to see Joe Hockey giving the RBA a $9bn hand out to bolster their reserve stash…would have though these guys could have made it all by themselves if they were to front run a few announcements…maybe they are not so smart after all..

And while we are on politics (or lack of it splashed negatively across the media) our glorious leader has put a businessman and head of the Biz council in charge of the audit committee and assessing Government contracts..his firm has won over $500m in those contracts so they will be happy…Tony Shepherd Chairman of Transfield and Chairman of the Committee that looks into giving out contracts..perfect match!

After 19 months as a Senator the best anyone could say about Bob Carr was they would miss his resonant tones..he was good value then..NOT! Back to your huge pension Bob!

And finally….

I was at the bar the other night and overheard three very hefty women talking at the bar.

Their accent appeared to be Scottish, so I approached and asked, “Hello, are you three lassies from Scotland?”

One of them angrily screeched, “It’s Wales, Wales you bloody idiot!”

So I apologized and replied, “I am so sorry.  Are you three whales from Scotland?” 

And that’s the last thing I remember

Have a great day..I am off to a couple of AGMs myself today so will be interesting to see what they have to say.




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