January Investometer and Quick Notes
Here’s my investometer for the end of January showing actual percent invested in equities.
My only purchase of note was in January was Catch The Wind. I continued to accumulate cash in our SMSF and am busy investigating opportunities. Nothing tickles my fancy at the moment.
I became concerned last month when several posters on one of the discussion boards I frequent commented they had moved to fully invested. As markets were hitting new high and were priced above fair value I took that as sign to be cautious.
Quick Notes
Elders has continued its downward trend. I didn’t expect it to continue to fall so sharply and so may actually be paying attention when it crosses $1.20, which I ear marked as a point for more detailed analysis.
If you haven’t noticed the recent move in Verus Investments Limited (VIL) then wake up and take a look. This is a coulda woulda shoulda for me as I started watching late last year (yes only two months ago) when it was a third of the current price. I almost ponied up for a small amount around four cents and now with shares around nine cents I can’t bring myself to buy in. The same thing happened to me last year with the Chinese BYD. It’s no wonder I’m keen to fold momentum into my investment strategy.
490,150,553 VIL shares traded hands today. A staggering amount as there are only 630,451,589 shares on issue. That’s right 77% of shares traded hands today! Though with VIL now the favourite play toy of traders a large percentage of the shares traded today would have been the same shares swapping hands throughout the day. What a ride for those with a ticket.
For US reader I reiterate that penny shares in Australia are a lot more common and not a reflection of the quality of the company. VIL is a highly speculative oil and gas explorer, but the price of the shares should not be used as an investment criteria.
Mauldin’s Outside the Box was big picture and very interesting this week. Following is the summary of the article by Simon Hunt, though the summary in doesn’t do justice to the excellent article.
In summary, global economic recovery will disappoint as set out below:-
- Growth will slow in the first half of this year
- It should recover late this year with a modest recovery likely in 2011.
- The seeds of the next credit crisis have been sown by soaring government debt and monetary largesse. It may well be the need for a huge issuance of government loans that will cause the next credit crisis, starting around 2012 and reaching its apex in 2013.
- A new global recession, part of the ongoing depression, will begin that year and last at least two years.
- The world is unlikely to begin a new period of sustainable growth until 2018 at the earliest.
- Until then markets will remain volatile and should be traded rather than now making long-term investments.
Related posts:
Leave your response!