Morning all,

Seems the great asset bubble is feeling a little tired at the moment. No one wants to leave the party or pop the bubble as it has been too good but equally it seems no one is willing to push more hot air into it either. So here we are back and filling, consolidating and pausing. The US is waiting for more guidance from Uncle Ben, the OECD downgraded the world’s growth prospects again last night and here in the Land Downunder the engine of performance has stalled. That engine is the banks and now they are ex div it’s hard to see why you need to rush to buy them.

And so as we grind through the AGM season to be followed by the floating anything with a pulse season, it looks like the market will struggle for a little while longer as we sort the wheat from the Chaff…still believe that we will see 5600 by Xmas but the lifting will have to be done by the BHP/RIO/WPL/FMG’s of the market and the banks to join in a little..another down 20-30 day in hand..

Idea of the Day

Yesterday I attended two conferences. One was our in house Life Science conference and the other was Symposium’s Resource conference. I was speaking at the resource one and giving a brief roundup of the year that was and thoughts for the year to come…

If anyone can remember that far back 2013 started with a bang..fiscal cliff sorted and we haven’t looked back since..except for May/June when we got the wobbles…I wrote back then that you should have been buying banks as their yields were too good to refuse..had a look at my ramblings and NAB were yielding close to 7% at one stage when I suggested buying them..now look at them…Anyway it was nice to be right occasionally ..always easy in hindsight…so here is a list of what I am expecting for 2014 ..at least what I talked about at the Symposium.

Lower Aussie Dollar as US Strengthens

US tapers its stimulus in March as economy improves

Rising Interest Rate Climate Globally

Next RBA move up

China continues to improve

Japan sees better days ahead

Asset bubbles expand and look increasingly stretched

Equity Markets need to focus on growth not income

First signs of earnings growth-PE Expansion

US goes through the Debt Ceiling all over again in February

In the sectors.

•             Financials-Class act 28% of the Index. “Buy the Banks Die with the Banks”!

•             Gold -Only the strong survive. Hedging is back ! Gold to bottom out

•             Small Resources-M&A activity to drive the sector

•             Materials-Iron Ore bears are going to back flip with pike

•             Industrials-Continue to feel the pinch as local economy remains subdued

•             Retailers-Banking on a great Xmas and January Sales period. Internet continues to eat their lunch.

•             Mining services-Focus on production not construction

•             Energy-Increasing focus on US gas exports

•             Biotech and Tech Stocks-Continued high valuations to be driven by US

Couple of stocks caught my eye at the conferences though…in Resource land Altona (AOH) and Gold Road..especially Gold Road (GOR)…recent discovery is a game changer as its bulk mining similar to Regis and AOH has a pretty impressive copper operation going in Finland..yeah I know land of the Rally driver and Nokia!But they are making money and producing..both well worth a look…

In life sciences..or Bio Techs ..what I find hard to get my head around is the money involved in this market..the cost of trials, the cost of the drugs especially in the US and the power that these companies can wield.It is a massive industry with massive amounts of cash being spent on acquisitions…you can understand why health care in the US is so expensive given the money being bandied around..truly staggering..anyway saw the SPL and PAB presentation which were pretty good..PAB is currently doing a rights issue to fund their trials..we are involved but even so I liked this one…low market cap with lots of potential..starting to get some interesting results in their Cancer treatments..worth a look for those seeking high risk high reward..they do tend to be binary outcomes and take years but this may be worth it.

Things to make me go mmmmm!

And the truth shall set you free…Larry Fink who is a mega bull has come out of the closet with these remarks..hit Zombieland at the close..as did the OECD downgrades

*FINK SAYS PENSION FUNDS TO START SELLING STOCKS TO REBALANCE

*FINK SAYS STRUCTURAL UNEMPLOYMENT GROWING

*FINK SAYS QE NOT HELPING WITH STRUCTURAL UNEMPLOYMENT

*FINK SAYS CENTRAL BANKS’ POWERS TO CREATE JOBS LIMITED

And still in the US it seems the Census Bureau has been fudging the unemployment numbers..doh!And its Thanksgiving Holiday retail spending season but seems that they are expecting the worse with Wal Mart talking about the weakest Holiday season since 2009!seems records on the Dow do not translate into jobs and growth! Strange that!

England lose to Germany in a friendly…No such thing is there?

Strange reports today about Nathan Rees having his political career ruined by his admitting to adultery..strange I didn’t know he still had a political career!

Over in the UK, the Chairman of the venerable but broke Co Op bank has resigned amidst issues with a former Chaiman that was filmed buying drugs…beware of the Flowers as I am sure they are gonna get you?

News that the banks are fighting hard for the Mortgage dollar is hitting commission rates to Mortgage brokers..but to the good..looks like MOC will have their fees INCREASED!!!Good news indeed for those investors who have been following my advice on this one.

From the World of Astrology.. Global growth for 2013 and 2014 has been downgraded “significantly” after weak prospects in emerging markets, says the Organisation for Economic Co-operation and Development.

Global GDP this year is now expected to grow by 2.7%, down from 3.1% forecast in May.But it said global economic growth would speed up by 2015.

JP ‘the Whale’ Morgan have copped a record fine of $13bn for past crimes and dirty deeds from Washinton Mutual..and now there is an investigation into fixing the gold price in the UK.

GrainCorp: Clive Palmer plans private members bill opposing ADM’s A$2.2b takeover, reports Bloomberg.

National Storage have launched a $124 million bookbuild. The co. is looking to sell 126.3 million securities at 98¢ each. The deal was priced with an estimated 2014 calendar yield distribution yield of 8 per cent and in line with the trust’s net asset value. According to a term sheet sent to fund managers, the proceeds would be used to reduce debt and fund the acquisition of National Storage Group, Artarmon Centre and the Marion Road Commercial Property.

Ten will bring back “So You Think You Can run a TV station  Australia” as part of its 2014 line-up as it seeks to lure back advertisers after its audience figures slumped to a 10-year-low.

And finally….
The mother-in-law arrives home from the shops to find her son-in-law Paddy
in a steaming rage and hurriedly packing his suitcase.
“What happened Paddy ?” she asks anxiously.
“What happened!! I’ll tell you what happened. I sent an email to my wife
telling her I was coming home today from my fishing trip.

I get home…  and guess what I found ? Yes, your daughter, my wife, with Joe Murphy in
our marital bed! This is unforgivable, the end of our marriage. I’m done.
“Ah now, calm down, calm down Paddy!” says his mother-in-law. “There is
something very odd going on here. Jean would never do such a thing! There
must be a simple explanation. I’ll go speak to her immediately and find
out what happened.”

Moments later, the mother-in-law comes back with a big smile.

“Paddy. I told you there must be a simple explanation …..she never got
your E-mail!”

Have a great day

Clarence

XXX

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