This is part three in my Biota series. I attended the Biota AGM on Wednesday. The presentations can be viewed here and the results are available here.
Background. Biota is a small molecule drug development company which focuses on drug discovery. Their business model is to license early. To use a baseball analogy, Biota aim to get a lot of players on bases rather than swing for home runs like most biotech firms. Biota have one main revenue stream in the flu antiviral Relenza and three major products in development, LANI, …

In the Notice of Extraordinary General Meeting Great Southern outlines to investors why they seek to exchange shares for woodlots and cattle droves. What follows is just my notes and in no way a recommendation for anyone. The deal appears to be reasonable for MIS holders, whose real mistake was originally investing in the MIS projects. MIS investors should be angry at themselves for believing a new financial product was going to be profitable for them. New financial products are designed to make promoters, advisors and banks wealthy. None of …

There are always underlying fundamental reasons for asset bubbles. If you ever find yourself thinking it is different this time then you should be very afraid.

After the tech bubble I remember seeing T-shirts and hearing the catch cry. “Just one more bubble please”. We’ve had another bubble or two since then, but I’d bet a penny to a pound that the same people wearing the T-shirts back then are wearing them again now.

Cycles will never end. Get used to it. Figure out to to profit from it and more importantly figure out how not to loose your shirt.

Despite predicting (or at least assimilating, reiterating and believing) the recession , the Chinese stock implosion, the fall of oil, the fall of commodities and the credit bust I have not profited from those predictions coming true.

The Fusion Portfolio is making the following trade at today’s close of US markets, Monday 28th October.
Selling the portfolio’s entire position in SPY, 2000 shares.
Buying 4,000 ULPIX, Ultra Bull Fund.
Due to the continuing strength of the US dollar the portfolio will record only a small loss of around 5% on the SPY position. This compares to the almost 17% drop of the SPY and 14% fall on STW.AX, the Australian S&P ASX200 index.
I will be writing a full portfolio update at the end of the month and will include my …

Most pundits are forecasting inflation will rise. So what does that mean to you? Before I discuss the implication of inflation let’s have a look at a chart based on one of the most accurate inflation forecasters around. The following chart is from Financial Trend Forecaster and they state “The Moore Inflation Predictor© (MIP) is a highly accurate graphical representation forecasting the future direction of the inflation rate. It has a 97%+ accuracy rate on forecasting inflation rate direction & turning points.”

The completely obvious factor is the faster inflation …

Interest Rate Securities come in four primary flavours:

Corporate Bonds. An unsecured loan to a company for a fixed period of time at a fixed rate of interest.
Floating rate notes. An interest rate security that pays interest at a variable rate that is set periodically in relation to an underlying reference rate.
Convertible Notes. A loan made to a company at a fixed rate of interest with the right to be either redeemed (i.e. repaid by the company) for cash or converted into ordinary shares at a predetermined date or within a …

Conclusion
Cyclical company, at the bottom of their earnings cycle with historically low ratios, like P/E, P/B, P/S and P/FCF. Close to upswing in their earnings cycle due to probable margin expansion. Will also benefit from ratio expansion. Both fundamental and technical conditions in place for substantial price rise.
Investment in-line with my general thesis that commodity prices, DOW inputs, will fall as demand falls. The expanding margins should more than offset any softening in demand for DOW products. The agreed Rohm and Haas acquisition is an added risk with the massive …

Part One of my Biota analysis was an example of how I initially approach investigating a biotech. In short read the filings and company website to get a base idea of products, pipeline, management, cash and cash flow. Then determine a rough value to see if there is any point in digging deeper. As I concluded I saw a lot of assets and existing cash flow going for a bargain price. I initiated a position in a personal account on Friday. This is part two in my Biota series.
I have …

I posted the following on the TMF Stock Advisor subscribers board, Stock That Interest You, on 11 July 2007. It was in reponse to a new investor asking whether to invest in BHP, because his fiance was making so much money being invested in it. The ADRs traded for $65.93 that day, three months later BHP hit a high of $85.67 before peaking at $88.88 10 months after my post. BHP ADRs closed at $35.07 on Friday. I’m posting this here for a few reasons:

The post contains some good usable …

Intel is a cyclical growth company. As such it should be bought at a discount to the S&P500. The good news is Intel currently trade at a discount with a ttm P/E of 12.46 and INTC is close to all time low valuations.