Random Catch-Up
I just read the latest Gleason Report and thought it may be time to catch up on some suggestions I’ve made recently. Many people, especially North American readers will find the Gleason Report confronting, as he discusses the end of an empire, fiat money and a global redistribution of wealth. The more confronting and absurd I find something the greater the consideration I give it and I encourage everyone to seriously consider Gleason’s views. There are lots of holes in what Gleason says, for example while manufacturing may have moved to China much of the actual purchase price is paid to US companies. Whether it be clothing or high tech gear Chinese manufacturers actually get the smallest slice of the pie, while US marketing, IP, sales et al get the big slices.
I have tried to encourage North American’s who I correspond with at places like TMF to consider Australian investments as a way to diversify out of US denominated assets. I’m not sure if any of them have heeded my suggestions, but I hope they have as the ones that come to mind have comparatively outperformed.
Biota Holding, BTA, today crossed the $0.60 cent mark, up around 80% from when I recommended it. I did hear form an Australian the other day who did buy Biota after I analysed it, the lucky/skilled guy bought at $0.31 which was a better price than any of my purchases. He’s older and clearly more patient than I. The Biota story continues to develop. Tamiflu, which is the main competitor to Relenza, now proving to be ineffective against major flu strains. If only GSK would start to market Relenza, then some serious profits could be attained.
Incitec Pivot, IPL, is currently trading at $2.39, up about 15% since I recommended it. After my analysis I found that many major US value investors were buying the US equivalent, Potash Corp. of Saskatchewan, POT. I wondered if I should buy some POT for old times sake 
Telstra, TLS, I still like the Telstra story a lot, though there are some serious question marks and uncertainty hanging over the company at the moment. I bought some the other day and would love to buy more under $3. The $0.28 dividend still looks safe and I continue to like their broadband strategy. I am not a perma-Teltra-bull and did recommend selling Telstra at around $4.30. Everything swings from undervalued to fairly valued and beyond. If you buy good assets when they’re undervalued and sell them when they’re fairly valued you can’t go too far wrong. Though saying that I still believe most investors should stick to long term timing via index funds.
I don’t think the market has bottomed yet, but I also think that waiting and watching for a bottom is a fruitless game for most investors. I only mention this as I get regular emails and calls asking me if I’m using margin yet. The answer is I will only use margin at massively oversold levels or once the early signs of a recovery are underway.
I’m working on a post about the historic returns and valuations of the Australian stock market. As I’ve got a lot on this week here is a starter for five.
Dividends are now higher than cash. That was the rationale behind my recent purchases of General Electric and Telstra. It is also why I started buying into Australian banks too soon, but despite the share price falls those investments have been somewhat cushioned by their dividends.
Disclaimer: This should be read after each of my posts. Keep in mind that I do not provide any investment advice and this blog is simply my ramblings and personal mutterings which you have stumbled upon. I may have positions in the companies mentioned, either long or short or be considering buying them. NOTE: I use words like ”recommended” as a convenient phrase as I do not not actually recommend any transactions to anyone ever. What I do recommend is you read the Gleason Report and if you find it highly agitates you, then I encourage you to consider whether you are emotionally mature enough to be an investor. It’s fine to disagree with his views or even find them ludicrous, but emotionally reactions will get you slaughtered in the market.
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