Morning sports fans,

There are always things in life I find hard to understand. Linkedin is one.How Uber can be valued at over $10bn?How the equity markets keep going up as the bond markets do the same with falling yields. How the US economy is expected to contract by 0.5% in the GDP numbers tonight yet the Fed is pulling back on the throttle? The falling yields around the world ,the low volatility (Vix is near record lows) the falling volumes,the falling gold price despite a full a not so civil war happening in Ukraine ,German unemployment rising very unexpectedly and Amazon’s business model(it has one?).

The focus is now heavily on Super Mario to deliver some stimulus…more pressure than State of Origin…let’s hope he doesn’t go all Queensland on us…

 

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I have been cautious and you know what ,I feel I am right to be…my simple banking index is now around 184…my simple resource index which is the sum of RIO ,BHP and FMG is around 104.And we are supposed to have had a mining bonanza!!!More like a banking bonanza…its all about the yield..if the resource stocks didn’t have to invest huge sums of money into long term projects and just pay out the dividends to the short term punters then they would be a whole lot better off.

Anyway our market is flirting with 6 year highs again…and yet volumes are atrocious..its all in the big end of town..we are currently doing around $3bn a day which doesn’t even rouse a supermodel these days or a NSW politician for that matter.

Expect a modest intake of air today…pause and hold!!May is nearly over and it looks like I have been slightly wrong on my call of sell in May etc…still never suggested a crash just a pullback to 5300 perhaps..more sideways than massive down…still see more sideways to down as we hit the summer season in thethethe Northern Hemisphere..looks like we have thethe same in Sydney these days too…retails must be hurting big time…do I put the winter stuff out or keep the boardies in the window..and what the hell am I going to do with all these wolly jumpers!!!!

Idea of the Day ( I like to think of them as pearls!!)

Now I read today from one small investment newsletter about their list of takeover targets..they included QAN…really again? They also listed MMS …one trick pony and eventually Abbott and his hit squad will run out of excuses not to have a go at these lurks and perks!!So what else was on their list? CAB charge..again really?Suppose if Uber is worth $10 bn then anything is possible..SMX and the TRS shop..says it all on the last one!!!

Personally I would look at strategic assets that have been run badly that are in a state of flux where the management is changing or has changed and the assets are hard to replace organically..thats why TWE was such a sitter..look for businesses that are so good that they can be run by an idiot because pretty soon they will be!!!

Will try and come up with a few suggestions…Do think that OFX has been treated somewhat harshly but it does not pay to disappoint…maybe something like ALL is worth a look especially given the bit below about their Facebook games rolling out…also one starting to appear on my radar is LNG ..has had a great run so timing is important but on the watch list..

Things to make me go mmmmm!!!

These guys really do have a licence to print money!!!!De La Rue, has claimed its turnaround programme is working after reporting a 6pc jump in revenues to £513.3m and a 43pc rise underlying operating profits of £90.5m.Seems they only print the funny money though for places like Sudan and Libya as the contract to print UK notes is with a Aussie company Innovia Security.Cant be that hard to make money surely!!

Do you want fries with that ?McDonalds announced it will return 18b to 20 b to shareholders between 2014 and 2016.

Spanish 10 years closed down 9 basis points to a record low of 2.8%.Italian 10 years closed down 7 to 2.93% and near record lows also. Portugal’s 10 years sank 12 basis  points  to 3.55%….German unemployment unexpectedly increased in May with the number of people out of work rising to a seasonal adjusted level by 23,927 in the month.Ling on a prayer springs to mind!!!Didn’t they see the election results..

A long awaited consolidation of oil and gas in the Cooper Basin may have been kick-started with Drillsearch Energy’s friendly $41 million scrip bid for its neighbour, Ambassador Oil & Gas. Drillsearch is offering one of its shares for every 5.4 Ambassador shares, implying a value of 29.3¢ per share, or $41.6 million.

Poker machine maker Aristocrat Leisure will soon have its popular Facebook games ready for play on smartphones and tablets. Aristocrat says its Heart of Vegas suite of games on Facebook is growing and was one of the social media site’s top new games of last year. A new Facebook application, the Jackpot Dreams suite of games, also has been launched.

Seems that one gold stock is in demand Papillion.PIR looks like it is on the receiving end of a take over bid by the Canadians…still in suspense ,I know it s killing me,but waiting for more details..$600m plus deal..another one..

Exchange-traded funds that buy computer and software shares absorbed $1.1 billion of fresh cash last week, more than any other industry.Google Inc., Facebook Inc. and Apple are up more than 9 percent in the past month as investors shopped for larger companies with stable earnings.And don’t forget its different this time..The Power Shares Trust the biggest technology ETF, attracted almost $1 billion last week, the largest deposit since March, data compiled by Bloomberg show. About $2.9 billion was pulled out in April, the most since 2000.Facebook trades at 80 times earnings whilst Glamazon trades at 505 times…I thought 80 was tippy.

 

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Everyone seems to be a bit down on WES as they eye off what to spend with their war chest of money…Healthscope has been mentioned…detractors have suggested that they know nothing about running a a healthcare business…seem to remember they knew nothing about running a supermarket chain either…but nor did the people running it at the time for that matter…you just buy the talent..did it with Coles…Curtis springs to mind and Robert is your fathers brother…they know business  so may not be a disaster if they step outside their skill set..

Nice report in the newspaper…fairfax of course..der!….suggesting that the Westfield don’t pay their fair share of corporate tax..not that they are doing anything illegal of course..its just Unaustralian!!!Not sure if that word warrants capitals..

Good to see that Christopher Pyne is now going to chase Uni Students into the grave for their HECS debts…now theres a PR nightmare for the Government.Very edifying and compassionate approach Whiney Pyney!

Big shout out to my very good friend Richard ,who is visiting Canberra at the moment and walking the corridors of power…otherwise known as the Casino Canberra…good luck trying to make sense of the mess that is Politics at the moment..and a tip once you’ve drunk your own mini bar you should just pass out like normal people do..not go looking for friends

I was asked by a school master the other day how do I invest in the growth of Aussie agriculture and the importance of Australia on supplying the growng middle class in Asia….wasn’t really sure…most are being gobbled up by Multinationals Goodman,Chessy companies and dairy etc…but Australian Agricultural Company: has narrowed its ­annual loss to $39.9 million after a switch to premium boxed beef sales helped offset drought .The new focus on branded beef sales delivered early gains, with gross profits from that business more than trebling to $17m.Not that many ways to play food in thsi country..very fragmented…

And finally……

A blind man is sitting at the “Small Bar ” in  Crows Nest (I can recommend it!!)

After a while, he yells to the bartender, “Hey, you wanna hear a blonde joke?”

The entire place becomes so quiet you could hear a pin drop.

In a deep, husky voice, the woman sitting next to him says,

“Before you tell that joke, sir, I think it’s only fair…. given that you are blind….that you should know five things:

Number 1: I’m a 6-foot-tall, 175-lb. blonde woman with a black belt in karate.

Number 2: The bartender is a blonde girl who keeps a baseball bat under the counter.

Number 3: The lady to your right is a blonde champion wrestler.

Number 4: The woman sitting next to me is a blonde professional weightlifter.

And number 5: The bouncer is a blonde woman who once killed a man in self-defence!

Now, think about it seriously, mister. Do ya still wanna tell that blonde joke?”

The blind man thinks for a second, then shakes his head, and mutters,

 

“Nah.. . not if I’m gonna have to explain it five times.”

Have a great Thursday

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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Get a Global take on things at http://www.ntmarkets.com

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