Fools rush in...

In reply to Isaac, post #223

Soco missed a good opportunity to sell up IMO.

Of all the several assets Soco have sold over the years, AIUI, each and every one has never been marketed 'ready for sale'. As a matter of course, any number of companies talk to Soco on a regular basis about their assets, as no doubt happens with many others. When both potential acquiror and seller objectives come together, then a deal is done. That's a proven method of getting a better price than putting assets up for sale in the open market.

Soco is up for sale every day

As is any other asset at the right price. The point being that Soco with its long experience of successful disposals backed up by large shareholder approvals knows better than any amateur masquerading as a city specialist spouting ill considered proclamations when it is best to do so !

Bad day at the office DJ? ;-))

From the pub - hell, I needed it.

D

In reply to marben100, post #225

but still have over 12% in cash

Well I admire your nerve Mark but I've been 40 % cash since May and have increased this to 60% recently.
How can one have any confidence in the the political leadership in Europe.?
I long ago came round to the idea that the only way they feel they can sell anything sufficiently radical to their electoral base is to wait for the bottom to drop out of the market.

I'm still of the opinion that the similarities in the current situation to the US crash of 1929 and the Japanese market in the 90's overtake the dissimilarities and I expect the blue line in the attached graph to make a stab at a similar profile going forward.

http://www.advisorperspectives.com/dshort/updates/Real-Mega-Bears.php

We will see.!

In reply to ohisay, post #229

Hi ohisay,

I have no confidence in Europe's leaders (or the US's FTM). But I do have confidence in the strong balance sheets of many "emerging" economies and their self-interest. ;0) Moreover, whilst China is slowing to.. oooh a shockingly poor 9% growth rate ;0) - I can't see its demand for raw materials reducing much. And all these economic shocks are hindering investment in new production, keeping supplies tight.

Asia and Brazil are the places to be, IMO, and you'll observe that directly or indirectly, that's where my investment is focussed (except the BLND bit today - though I've noted it mentioned that some view London property  as an emerging market asset, for good reason).

Cheers,

Mark

PS I put emerging in quotes because my own view is that many of these economies have already emerged, with substantial middle classes, enjoying liefstyles previously thought to be the preserve of the West. IMO much of the western investment community hasn't understood this yet. Annualised car sales in China have surpassed those in the US and continue to grow - yet the Chinese economy is claimed to be a fraction the size of the US one? Pull the other one - its largely a question of currency distortions IMO.

In reply to ohisay, post #229

I've been 40 % cash since May and have increased this to 60% recently.....

How can one have any confidence in the the political leadership in Europe.?
I long ago came round to the idea that the only way they feel they can sell anything sufficiently radical to their electoral base is to wait for the bottom to drop out of the market.

....mmmmm.......I think that is a fair point - and not just in Europe. However....what is "the market"? I know what you are referring to (equities) but frankly equities are perceived to be a "rich man's toy" by the electorate! What the electorate actually care about are things like jobs, house prices, retail prices and taxes - and I would argue that on all fronts (except perhaps housing) the recent news has been sufficiently gloomy that the electorate fully realise that "something must be done". Of course some sections of the electorate are still mithering away at the Liberal Democrats for having "broken" their pledge on student fees (overlooking the fact that they are only a small part of the Tory-led coalition)....but in general I'd say that the electorate would be pretty receptive right now to radical action.....

....which makes me wonder just how many people might be running cash balances of 40...50...60% in their portfolios and who might flip over to the buy side en masse in the event that we get some convincing coordinated political moves.  It seems to me that what we have right now is a simple crisis of confidence...."simple" in the sense that everyone but everyone is expecting things to get much worse in the near-term but there is limited evidence from current stats to show that is already happening - and "simple" in the sense that the principal driver is pure "sentiment".

Of course what isn't "simple" is the idea that there may be global agreement on a "fix" - but it isn't impossible for the IMF, World Bank, US, UK, France and Germany to cobble together a plan of action (with the rest of the world following a lead)...and it seems to me (partly from watching high-level debates and speeches in the last 24 hours) that there is now an emerging high-level agreement on the need for coordinated action. 

One weekend (perhaps fairly soon?) we may find that agreement has been reached and a plan hatched - and that could turn markets around extremely sharply. So I have three takeaways from that thought:

1. Don't be short on Fridays

2. It may be more dangerous to run large cash balances (or big shorts) at this point as it is to be 100% committed to the market.

3. Some corporates may deploy their cash balances in takeover bids before the market is perceived to have hit bottom - because then it is easier to get shareholder agreement.

I'm continuing to do nothing - sat on cash balances of around 10-15% of the portfolio and waiting for one or two "special situations" to turn into cash.....but if I was running 40/50/60% cash I would certainly be deploying some very large chunks of it in the coming weeks (though perhaps more on Wednesdays and Thursdays than on Fridays).

ee

In reply to emptyend, post #231

I was looking at the yields available on Belgian telecoms companies yesterday. Belgacom, where the government is reported to be looking to sell off it's stake at some stage, but surely not anywhere near current price,Telenet and Mobistar.

The top and bottom of it is that there is a lack of competition, mainly because the market is small and the government sees telecoms as another revenue raising trick. Yields are10% plus and about 60% more for telenet, which has the best offering in my view.

These companies will continue to churn out huge amounts of cash, however much the politicians do their best to screw up the world economy, imv and there is always a chance that one weekend they might, as ee says, get their act together.

http://www.beursduivel.be/koersen-BEL20.index

Worth a look for any euro investors, like SirL.

repo

I'd agree completely there ee.

Investors are getting fatigued, whipsawed by the markets and so money is being hoarded with zero confidence at the moment. Default option is cash or bonds as a parking home with maybe some tobacco or pharma/global titans. There's no appetite for anything with the slightest perception of risk, despite the evident health of many companies and the emerging mkt health as mentioned by Mark.

Sooner or later though the fatigue of low rates on bonds and cash will wear them down.

I'm not so sure on the "masses" getting radical front though. The public sectors are so dominant and powerful and self interest so strong that they will not accept the pain imo. Any forced radical action would be political suicide imo. Have the politicians got the nerve to do what's right over self interest?

But I do accept that there is a growing intl feeling of "something has to be done". I do wonder if the most radical solutions aren't being discussed - say full union in the EU - politcally and monetary.

In reply to djpreston, post #226

Mark, Darren,
What's the view on Vedanta Resources (LON:VED) - seems to have / be taking a real pasting over the last few months?
Bob.

In reply to BobGe, post #234

When it comes to the major miners, I'm happy to leave my stock selections largely to Evy Hambro & co at Blackrock. They've done a pretty good job over the years. I save my analysis time to the juniors that are too small for the likes of Blackrock and may be underanalysed.

Blackrock's latest top 10 weightings are as follows:

Cheers,

Mark

And what's more, evy's trust is on a whacking discount. Why on earth does anyone buy the UT? More to the point, and my major gripe, why is there no discount management in place?

In reply to repobear, post #232

Re: Belgian telcos

It's not just Belgium, Eurozone telcos are collapsing all over. Good examples of blue chips that I have seen mentioned elsewhere are France Telecom (> 12% yield) and Telefonica (~11% yield (from Google on the ADR)).

Surprisingly BT doesn't seem to be so out of favour.

Jim Rogers heavily short stocks & Emerging markets. Long Commodities.

http://www.youtube.com/watch?v=ujHUvp-nEmo

Wow, taking a bath today...some of the moves down are a sight to behold. (:

Amerisur -8.5%
AST -12%
Blvn -11.9%
BNK -8.4%
BPC -13.8%
COV -9.1%
EO -9.3%
GKP -9.9%
IAE -6.5%
MRS -10.3%
MXP -9%
NEW -12.1%
NOP -10.9%
NPE -8.5%
Ophr -14.8%
PMG -8.9%
RKH -9.7%
RRL -9.6%
TRP -14.4%
XEL -10.1%

BG -6.3%

Absolutely gobsmacked.

Busy day for me, topping up in:

• Coastal Energy (LON:CEO)
• Medusa Mining (LON:MML)
• Plastics Capital (LON:PLA)

Added some J Sainsbury (LON:SBRY) for the first time to my high yield sub-portfolio. That subportfolio is now yielding 6.8% (historic) and I expect its aggregate dividend to rise rather than to decline.

Got an overnight order filled for some HK:0575 Regent Pacific @ HK$0.175 . Now that one is an extraordinary situation. At my buy price, the market cap. is US$81.4m. It has cash of US$64.1m, no debt, and listed investments worth US$107.2m, by my calculation (plus some small investments in associated companies) - even after recent market falls. The company has a history of paying special dividends when it realises major investments. Its largest current investment is 21.6m shares in Aussie iron ore miner, BC Iron (ASX:BCI). It is executing a share buyback programme. These markets throw up some extraordinary opportunities ;0)

Took some profits on some midcap company short positions I had, which helps keep my cash topped up. But added to my short on Carpetright (LON:CPR). It actually rose today - but a trading update is due later this month (25th), and it ain't gonna look pretty. ;0)

Still have a decent short position across a number of midcap stocks that I feel are overvalued (short-term). On days like today they ease the pain of the overall hit my portfolio takes, making it easier to grit the teeth and deploy cash judiciously.

Keep fighting the good fight!

Toodle pip,

Mark

I don't think those following Mark's strategy of drip feeding money will lose in the long term. I think it is sound.

But I suspect we are heading for 4500 on the FTSE and 1000 on the S&P, I hope to buy up loads of stocks at this level.

Technical Analysis does work and right now it says lower markets.

The axe to my portfollio back in July/Aug now looks like a good move, had I held onto those risky small caps I would be much worse off, some of them are off 50% since I sold!

Infact all the stocks I sold are well of their July/August levels.

AIM sucks - I don't plan to buy any AIM Stocks.

I think the trick is to stick to solid companies with good balance sheets & ones that are in good growth sectors that have been hit hard. I plan to focus on dividend paying stocks, I can wait a long time especially if they are prepared to pay 7-8% dividends for doing so.

Mark's very kind to share his purchases with readers, I certainly have some of those stocks on my watch list and definetly intend to buy, it is a case of timing for me.

I do think there is going to be some kind of massive stimulus at somepoint that will see a big rally in the markets, I am playing a risky game of trying to preempt such a move when in reality I might just be better off drip feeding into beaten down stocks - Time will tell.

Seems to me that the eye of the storm is fast approaching and it might be useful to consider our situations.

I'm interested in people's assessment of the success of whatever strategy they have followed since the storm broke (or say when this thread started) through to now.

Seems to me there are 2 obvious notional strategies that we can take as controls to compare our actual strategy against.

Control 1) do nothing - ignore the crisis (what crisis?) and hold tight

Control 2) sell everything and go 100% into cash

Our actual strategies as revealed here and elsewhere have varied considerably. Speaking for myself, I went partly into cash but was not early enough to avoid pain. Then subsequently moved further into cash to around 50% accepting some pain but not very much. Have held the remaining positions which have pretty much all taken beatings. So really I've effectively done half and half between the 2 controls but with the disadvantage of being too slow off the mark.

I have to say that I would have been much better off just going all out for Control 2. What's irritating me is that around May 2010 I was spooked by the stormclouds and went 100% into cash in a single morning. That proved to be an excellent move which saved me a lot over the next few weeks. By the time this storm blew up I had re-invested most (70%???) of my funds and was still looking for buying opportunties for the rest, so was much too slow and too dim to repeat my houdini impression. How long do I have to do this investing thing before I get to be basically competent?

Do those of you who have simply sat tight still feel comfortable?

Do those of you who have been bottom fishing think they are ahead as a result?

Do any of us know what we are doing?

Good luck chaps.

I'm fully invested and will remain so. Each month I work, earn money and add to my portfolio.

My view is that I am entirely ignorant of what will happen to the market in the short-medium term. I don't try and guess things which I don't have a clue about.

In the long term I believe overall GDP will continue the upwards trend.

So I'll be buying this month and next, etc.

In reply to tournesol, post #242

Do those of you who have simply sat tight still feel comfortable?

Yes - poorer on a mark to market basis (for now)....but still comfortable

But then my pension fund is still all in cash and bonds (as for the last 4 years) and I'm still sitting on 25% of the cash from the sale of my Dana stake last year.....and my main holding in SOCO International (LON:SIA) hasn't suffered as much as some.

I think that last night's 350 point turnaround in the last hour of the Dow is indicative of the sort of moves we are going to see shortly.  Valuations seem well below where they should be based on fundamentals - and there is enough cash on the sidelines to more than correct that.......just as soon as people believe that politicians have got the proper measure of the scale of global problems with debt and the will to take credible action.

100% cash would be vastly too risky, IMO, unless one is expecting to spend it in months rather than years.

ee

ps...note the Premier Oil (LON:PMO) takeover of Encore this morning. Those with corporate objectives to meet are not going to sit by idly......

...and just sold my entire holding of Encore @ 72p, freeing up rather a lot of cash. :0))))

Happy to leave it to the arbitrageurs to try to make anything extra over the 70p cash offer. Don't particularly want the Premier Oil (LON:PMO) shares.

Cheers,

Mark

Well if you wanted a contrarian indicator this must be close to being the real thing.

.I think 'll just watch..


http://www.bloomberg.com/news/2011-10-10/short-selling-rising-most-since-2006-as-11-trillion-is-erased-from-stocks.html

Investors are increasing bearish trades around the world by the most in at least five years, convinced the lowest valuations since 2009 will prove no barrier to losses after $11 trillion was erased from equities.

Bearish bets last increased faster in March 2009, the same month the S&P 500 began a bull market that doubled its value. The surge in equity prices came seven months after NYSE short interest climbed to an all-time high in July 2008. The U.S. equity benchmark rose 2.1 percent to 1,155.46 last week.