Wednesday, October 29

Newspaper Shares Tips

Online Stock Trades - Newspaper Share Tips

Shares to Watch

After a 10% rally in the DOW everything is right with the world again, at laest until this afternoon, so here are some places to put all that cash you've been hoarding (apparently Warren Buffett reads this blog)!

SAP -- caution; low visibility ahead is the warning from an increasing number of previously optimistic technology companies
BP -- steady acceleration as she goes
Emerging markets – after worst monthly fall ever are now 'submerging markets'.
British Airways suffers due to doubts re. merger with Iberia
Senior up after end of Boeing strike
Talk of stake increase by Joe Lewis lifts Mitchells & Butlers
Oxford Catalysts overshadowed by fundraising rumours
Ural Energy rumoured to be selling 4 production facilities


Buy BG Group –
Hold ARM –
Hold Cineworld

Talk that US pension funds want to move out of bonds and into equities

Tiddler to watch : Resaca Exploitation


Hold Aviva –
Hold ARM –
Avoid Aegis

ITV advertising tumbles


Hold ARM –
Hold Braemar Shipping –
Buy Cineworld

Colt Telecom hit by fears that corporate customers will cut spending drastically

Stock Picks

Online Stock Trading - Newspaper Share Tips

Shares to Watch

After a 10% rally in the DOW everything is right with the world again, at laest until this afternoon, so here are some places to put all that cash you've been hoarding (apparently Warren Buffett reads this blog)!

SAP -- caution; low visibility ahead is the warning from an increasing number of previously optimistic technology companies
BP -- steady acceleration as she goes
Emerging markets – after worst monthly fall ever are now 'submerging markets'.
British Airways suffers due to doubts re. merger with Iberia
Senior up after end of Boeing strike
Talk of stake increase by Joe Lewis lifts Mitchells & Butlers
Oxford Catalysts overshadowed by fundraising rumours
Ural Energy rumoured to be selling 4 production facilities


Buy BG Group –
Hold ARM –
Hold Cineworld

Talk that US pension funds want to move out of bonds and into equities

Tiddler to watch : Resaca Exploitation


Hold Aviva –
Hold ARM –
Avoid Aegis

ITV advertising tumbles


Hold ARM –
Hold Braemar Shipping –
Buy Cineworld

Colt Telecom hit by fears that corporate customers will cut spending drastically

Monday, October 27

Monday Stock Markets Slump

Stocks and Shares - Markets Slump Again - FTSE down 5%

MORNING REPORT: Shares fell sharply in London this morning, after falls on Wall Street on Friday and major losses across Asia, finance and miners being the worst casualties. THe DOW futures are sharply down so Wal Street is set for further falls.

By 10:30 the FTSE was down 185 points at 3,697.

The DOW fell 312 to 8,378, the S&P500 fell 31 points to 876 with the Nasdaq Comp down 52 points at 1,552. Could today or tomorrow be the day we finally see the final capitulation people are looking for?

In Asia, the Hang Seng fell a massive 12.7% - 1,602 points to 11,015.84, and the Nikkei fell 486 points to 7,162 to a 26 year low.

The DAX is down 165 points at the moment but that would be 365 points if it wasn’t for Volkswagen being up 90% this morning ! (due to Porsche increasing its stake)

In London the so-called ‘safer’ bank HSBC (supposedly protected by being invested in Asia) fell sharply by 9% as it turns out being in Asia is not such good protection after all HSBC shares were down over 70p (10%) at 620p at one point.

Banks in general are down Barclays down 5% to 181p, RBS down 4% at 58p and STAN down 8% to 694p, HBOS however is up 8% to 64p.

Miners are also down - Xstrata down 10% at 701p, Rio Tinto off 11% to 2020p and BHP Billiton own 10% at 785p.

Oil prices also fell, so we can all drive our cars again, US light crude for December down 66 cents to $63.49 a barrel.

Shell are down 5% to 1,404p, with BP off 6% at 413p and BG Group 10% lower at 647p.

According to Hometrack, house prices in England and Wales are down 7.3% in the year to October, and the pace of decline seems to be accelerating – with prices back to March 2006 levels – it’s worth bearing in mind that in the US prices are back at April 2004 levels.

The Centre for Economics and Business Research says house prices in the UK will continue to fall for another year and will not get back to 2007 levels until 2013 at the earliest,.

Housebuilders however are strong this morning on hopes of a cut in interest rates, possibly this week and possibly as much as 100 points. Persimmon also said underlying trading results for the full year will be in line with expectations.

Persimmon (PSN) shares are up 4% to 224p, while Barratt Developments (BDEV) are up 6% at 54p and Bovis Homes (BVS) is flat at 293p.

Monday Markets and Newspaper Roundup

Stocks and Shares - Monday Newspaper Roundup

The Nikkei fell 486 to 7162 the Hang Seng fell 1602 to 11015 Shanghai fell 116 to 1723 but the Kospi ended up 7 at 946 as they cut interest rates by 75 points.

FED expected to cut base rates by 50 points on Wednesday, with the Bank of England to follow by 100 points

Japanese banks fall as they announce ‘capital boost plan’ caused by over $9bn in investments in Morgan Stanley

Mumbai dropped 10% but recovered to drop just 2%


Investors fear that HSBC and Santander they will be sucked into the financial mess [In my experience it’s when people have invested in the companies that are seen as ‘safer’ that they then start to fall – jsut a few month ago people were recommending commodities and insurance companies – Ed.]


RAB Capital bans withdrawals from energy fund after falls in oil price


Collapsing sales of beer hurting pubs [which may explain why the pub next door has gone quiet recently ! – maybe it will close ? – Ed.]


Investment: Oil still promises slick performance (BP, Wood Group)

AIM Market: Amstelco - Metic Group

Sunday, October 26

Oprah Loves Amazon Kindle Ebook Reader

Stocks and Shares - Oprah Loves the Amazon Kindle Ebook Reader

Amazon has just received a huge endorsement for one of its very own electronic products - the Amazon Kindle Ebook Reader. Oprah Winfrey is displaying it on her website - Oprah's Favorite New Gadget with a very long 4 page article explaining how wonderful the Kindle is and how it is her favorite gadget, which is an amazing endorsement as Oprah has a faithful following of tens of millions of devotees. So if she is giving her seal of approval to the Kindle then you can expect many of her followers to go out and buy one (she is also offering a $50 discount via her website) - I would expect many people will seriously consider buying them as Christmas presents.oprah favorite gadget kindle ebook reader

The Kindle Ebook Reader itself is a very interesting piece of kit which allows people to wirelessly download books, magazines and newspapers (for around $10 for a book). The screen is made of of special materials and electronicink to make it look like a page i.e. not your usual tiring computer screen. Oprah points out the ecological factor of not having to destroy trrees to read a book/newspaper etc... but students will also find it very interesting as they have carry dozens of books around with them on their Kindle, without having to carry a bag full of book sweighing a ton.

Amazon should make plenty of money from the sales of the Kindle itself, plus of course they get paid every time someone downloads something onto it. The downloads are by they way more or less instantaneous.

So Amazon shares may well prove to be in demand. This is not a recommendation by the way, just me thinking out loud.

Home : Buy Stocks Online

Saturday, October 25

Time to Buy Shares?

Online Stock Trading - Is This the Time to Get Back into the Stock Market?

With the DOW at 8378 the Nasdaq at 1552 the S&P at 876 the FTSE at 3883 (almost back at its 2003 lows) is this the time to be getting back into the stockmarket? The obvious way of making money in the stockmarkets is to buy low and sell high, that is the essence of the stock market for beginners but it is also the essence of the stock market for experts.

It really is very simple ! Warren Buffett has been buying recently, so clearly it is worth examining whether this is the time for you to be joining him.

Personally I subscribe to the theory of the short-term bounce. A bounce starting next week and lasting for a month or so. So I will be watching the markets carefully next week, particularly Monday. Art Cashin, a well-respected New York trader said something interesting on Friday i.e. "the last Monday in October would be a good time for an end to the bear market" or words to that effect. For Art Cashin's explanation of what constitutes capitulation in a bear market see Was that Capitulation?. We may have seen capitulation in fact when the DOW hit 7882 around 10 days ago before rebounding. Personally I expect the DOW to move down to just below that figure before rebounding. Art Cashin is also expecting something sensational when the market does finally rebound, something like a 1000 point or more rise in a day.

Warren Buffett says that for the first time in years he has been buying US equities for his own personal account. Bear in mind however that he was buying them when the DOW was around 8200 and he stopped buying when the DOW suddenly rebounded 400 points. He can also afford to wait 5 years, as is his wont, if he times it wrong.

So I am tempted to follow the Oracle of Omaha and start picking stock up next week, particularly if there is an initial drop early in the week, but my time frame isn't the same as Warren Buffett's, I will be out pretty quick if it looks like things are turning smelly again.


Friday, October 24

Greenspan Fesses Up Markets Plummet

Online Stock Trading - Greenspan Fesses up - Blood and Guts on the Stockmarkets Again

Blood on the FTSE as it plummets again, down 316 (7.7%) at the moment. The Nikkei fell 9.6% yesterday and the USA will open down. If memory serves me right the recent low on the DOW was 7882 – it closed at 8692 last night after bouncing around all day and hitting a low of 8243. So I expect tin hats to be much in evidence when the USA wakes up.

Reasons to be cheerful – Warren Buffett was buying when the DOW was down around 8200.

Greenspan has finally seen the light ! There were 'flaws' in the economic model he had been following for forty years ! Ha ha - thanks Alan. Remind me of that job you used to do? Ah yes, FED Chairman. You couldn't make it up!

Predictions for the S&P are 823 or 780 – it closed at 908 yesterday.

The best performer in the FTSE is BGY which is only down 1.3% the worst performer is HBOS which is down around 20% - to see how red it all is check out - HeatMaps

Bob Parker – (analyst from Credit Suisse I believe) on CNBC – says "we are still not at the end of selling by hedge funds as they raise cash. Gold has further downside. – There could be a technical rally over the next month or so – but there is still distressed selling so this time may be different we need clear evidence that distressed selling is at an end.

Are brokers a good buy ? Profits of pure brokers (equity traders) driven by turnover – profits should be good – but anything to do with derivatives is very illiquid

Tech rally highly probably – for a sustained rally we need evidence of a turnaround in economic and corporate earnings growth which will not take place in the next 6 months. "

And all this with a ban on short selling of financial stocks still in effect in the UK.

Nobody is buying anything anymore, Sony's figures were awful, Toyota cars aren't shifting. Instead of giving $30 billion to charities (what do charities do with their money anyway?) Warren Buffett should hand his dough out to people struggling to pay their mortgages.

Wednesday, October 22

Evergreen Solar Good Investment

Stocks and Shares - Evergreen Solar Good Long-Term Buy

Solar panels you would think would be the place to be given the energy problems facing the world, but not all solar panel manufacturers are the same and a lot of them have plummeted recently, not so Evergreen Solar.

Jake Huneycutt has just written an excellent article on why Evergreen Solar (ESLR) is a good bargain.

Evergreen Solar makes solar panels using polysilicon, but they use a technology called 'string ribbon' and use 50% less crystalline silicon than than other manufacturers.

Most solar stocks have been less than stellar recently but Jake Huneycutt thinks Evergreen are a good bargain, saying it could have a very bright future ahead. He is also impressed by the management and believes Evergeen is more concerned about product quality than other companies. He sees an "immense upside with Evergreen."

It is not a stock he recommends for the short-term, he even says the price may decline further (so it would make sense to wait before buying it!) But it does seem to be a great long-term buy, i.e. at least 2-3 years.

He has a 3-year target price of $15. Upside potential over the next 5 years could range from $60 - $80 but the downside risk is that the stock drops all the way to $0 ! Not one for the fainthearted.

It is also worth bearing in mind that Evergreen Solar Inc. has just filed a lawsuit against Lehman Brothers and Barclays to recover around $12 million of stock loaned to Lehman that was allegedly "improperly sold" to Barclays.

Sunday, October 19


Online Trading - Domain Names Still a Sound Investment

Domain names (those things you see in the address bar of your web browser e.g. The Oracle Of Omaha ) are still a good investment in these troubled times.

The latest sales for the week ending October 12.

  1. - $300,000
  2. - $195,000
  3. - $99,000
  4. - $85,000
  5. - $70,000
  6. - $68,000
  7. - $55,802
  8. - $52,000
  9. - $47,500
  10. $37,500

Some surprising names in their and not a porn name in sight !

And the big one that is being sold by auction COLD.COM with a minimum bid of $1 million. The guy that bought this domain acquired it back in 1996 for nothing and has renewed it every year since - total cost $600 if memory serves me right. So not a bad return for a 12 year investment!

For more information on investing in domain names see domain name investing

President Sarkozy's Bank Account Hacked

Stocks and Shares - President Sarkozy’s Bank Account Hacked

The French President Nicolas Sarkozy informed police in September that 'small amounts' had been disappearing from his bank account. According to police the method that the “financial thieves” made was to make lots of small withdrawals in an ensure that their crimes remain undetected.

Parisian thieves apparently obtained passwords and confidential numbers of Mr Sarkozy’s “carte bleue” and withdrew regular amounts from Mr Sarkozy's annual salary of £195,000 a year.

Fraud squad officers are investigating the case “with the greatest discretion”, but so far nobody has been arrested. Clearly the “greatest discretion” does not include leaks to the press!

In 2007 Mr Sarkozy provoked a furious row himself after awarding himself a 140% pay rise. Up until then French heads of state were paid a relatively low salary then helped themselves to generous expenses, but Mr Sarkozy said he preferred the system to be more transparent, saying : "I want the French to know."

With regard to the hacking of Mr Sarkozy’s bank account, a financial prosecutor said "We can confirm that an investigation is underway into amounts of cash stolen from the President's bank account."

The French Minister for Consumption, Luc Chatel, speaking on Radio J said, this strange case "proves that this system of consumption via the Internet is not infallible and, as Secretary of State for Consumption, I find this worrying. ..... I think that today there are doubts in this respect, a lack of trust in the system and I think that those with most to gain, banks and consumers, must endeavour to improve matters, that is the objective which we have given them."

Thank you Luc but does that mean the fraud was the result of Mr Sarkozy using the Internet ? Maybe he just left his password lying about in his boudoir ?

Saturday, October 18

Andrew Lahde's Letter to the Idiots

Online Stock Trading - So Long Suckers Says Andrew Lahde

Andrew Lahde of Lahde Capital has just closed his hedge fund and cashed in his chips, In a letter to Investors Mr Lahde explains his thoughts on the "idiots" running banks (or ex-banks) around the world. He doesn't pull his punches. "I was in this game for the money. The
low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and
then the Harvard MBA, was there for the taking. These people who were (often)
truly not worthy of the education they received (or supposedly received) rose to
the top of companies such as AIG, Bear Stearns and Lehman Brothers and all
levels of our government."

Last year Andrew Lahde published another letter in which he said that he expected "the collapse in value of subprime mortgage-linked securities to be repeated for bonds backed by commercial property loans in a deep recession – which he also predicts."

“Our entire banking system is a complete disaster... In my opinion, nearly every major bank would be insolvent if they marked their assets to market.” He also explained that some of his own profits would be invested in gold and other precious metals. Although that was last year, so he may have got out of that by now too.

Mr Lahde also praised the values of hemp (not the type you smoke) as a highly ecological alternative food and energy source which can be used to make many energy-efficient products and save energy. This is very true - hemp is used to make highly energy-efficient hemp bricks, which are in turn used to build hemp houses (check out hempbricks .com and hemphouses .com)
Below is the full text of Andrew Lahde's remarkable letter, he doesn't name names unfortunately, but reading between the lines you can recognize some of the investment bankers that have led their banks (and the stock markets and economy of the Western world) down the toilet, whilst at the same time pocketing huge bonuses. Perhaps they weren't so stupid after all?

"Dear Investor,

Today I write not to gloat. Given the pain that nearly everyone is
experiencing, that would be entirely inappropriate. Nor am I writing to make
further predictions, as most of my forecasts in previous letters have unfolded
or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge
fund manager who was also closing up shop (a $300 million fund), was quoted as
saying, “What I have learned about the hedge fund business is that I hate it.” I
could not agree more with that statement. I was in this game for the money. The
low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and
then the Harvard MBA, was there for the taking. These people who were (often)
truly not worthy of the education they received (or supposedly received) rose to
the top of companies such as AIG, Bear Stearns and Lehman Brothers and all
levels of our government. All of this behavior supporting the Aristocracy, only
ended up making it easier for me to find people stupid enough to take the other
side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success.
However, I do not want to sound like a Hollywood actor accepting an award. The
money was reward enough. Furthermore, the endless list of those deserving thanks
know who they are.

I will no longer manage money for other people or institutions. I have enough
of my own wealth to manage. Some people, who think they have arrived at a
reasonable estimate of my net worth, might be surprised that I would call it
quits with such a small war chest. That is fine; I am content with my rewards.
Moreover, I will let others try to amass nine, ten or eleven figure net worths.
Meanwhile, their lives suck. Appointments back to back, booked solid for the
next three months, they look forward to their two week vacation in January
during which they will likely be glued to their Blackberries or other such
devices. What is the point? They will all be forgotten in fifty years anyway.
Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not
understand the legacy thing. Nearly everyone will be forgotten. Give up on
leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect
any type of reply to emails or voicemails within normal time frames or at all.
Andy Springer and his company will be handling the dissolution of the fund. And
don’t worry about my employees, they were always employed by Mr. Springer’s
company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate.
I truly do not have a strong opinion about any market right now, other than to
say that things will continue to get worse for some time, probably years. I am
content sitting on the sidelines and waiting. After all, sitting and waiting is
how we made money from the subprime debacle. I now have time to repair my
health, which was destroyed by the stress I layered onto myself over the past
two years, as well as my entire life — where I had to compete for spaces in
universities and graduate schools, jobs and assets under management — with those
who had all the advantages (rich parents) that I did not. May meritocracy be
part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal.
First, I point out the obvious flaws, whereby legislation was repeatedly brought
forth to Congress over the past eight years, which would have reigned in the
predatory lending practices of now mostly defunct institutions. These
institutions regularly filled the coffers of both parties in return for voting
down all of this legislation designed to protect the common citizen. This is an
outrage, yet no one seems to know or care about it. Since Thomas Jefferson and
Adam Smith passed, I would argue that there has been a dearth of worthy
philosophers in this country, at least ones focused on improving government.
Capitalism worked for two hundred years, but times change, and systems become
corrupt. George Soros, a man of staggering wealth, has stated that he would like
to be remembered as a philosopher. My suggestion is that this great man start
and sponsor a forum for great minds to come together to create a new system of
government that truly represents the common man’s interest, while at the same
time creating rewards great enough to attract the best and brightest minds to
serve in government roles without having to rely on corruption to further their
interests or lifestyles. This forum could be similar to the one used to create
the operating system, Linux, which competes with Microsoft’s near monopoly. I
believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an
alternative food and energy source. You won’t see it included in BP’s, “Feel
good. We are working on sustainable solutions,” television commercials, nor is
it mentioned in ADM’s similar commercials. But hemp has been used for at least
5,000 years for cloth and food, as well as just about everything that is
produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is
the male plant and it grows like a weed, hence the slang term. The original
American flag was made of hemp fiber and our Constitution was printed on paper
made of hemp. It was used as recently as World War II by the U.S. Government,
and then promptly made illegal after the war was won. At a time when rhetoric is
flying about becoming more self-sufficient in terms of energy, why is it illegal
to grow this plant in this country? Ah, the female. The evil female plant —
marijuana. It gets you high, it makes you laugh, it does not produce a hangover.
Unlike alcohol, it does not result in bar fights or wife beating. So, why is
this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol,
which is so heavily advertised in this country. My only conclusion as to why it
is illegal, is that Corporate America, which owns Congress, would rather sell
you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a
plant in your home without some of the profits going into their coffers. This
policy is ludicrous. It has surely contributed to our dependency on foreign
energy sources. Our policies have other countries literally laughing at our
stupidity, most notably Canada, as well as several European nations (both
Eastern and Western). You would not know this by paying attention to U.S. media
sources though, as they tend not to elaborate on who is laughing at the United
States this week. Please people, let’s stop the rhetoric and start thinking
about how we can truly become self-sufficient.

With that I say good-bye and good luck.

All the best,

Andrew Lahde”

I would guess that Mr Lahde has made himself quite a few friends but also a lot of enemies by publishing his letter. And despite his intentions I suspect we haven't heard the last of Andrew Lahde.

Thursday, October 16

Google's Earnings Rise Relentlessly

Online Stock Trading - Google's Earnings Rise and Rise

Investing in Stocks and Shares

Credit crunch, what credit crunch? Google continues to rake in the money from all those pesky ads. you see all over the web. Google’s earnings have resisted the downturn seen elsewhere in advertising. Its share price shot up 25% from its lows as a result.

Pro forma earnings, excluding stock compensation costs rose to $4.92 per share, beating consensus forecasts of $4.81. Revenues, net traffic acquisition costs, increased to $4.04bn, in line with forecasts.

Eric Schmidt, CEO said in a statment that the quarter had seen “strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business.”

Google’s core search advertising business continues to performed well despite the credit crisis and the slowing economy. This led to a rally that sent the company’s shares above $380 in after-market trading. They had been as low as $310 earlier in the day, their lowest point in almost three years.

How the share price will perform in future however is not clear. They could rally a couple of days and then continue their slide, or if there rest of the market recovers they could recover along with it. As they say "Don't fall in love with the upside"!

With regard to pay per click revenue (PPC), Google stated that the number of paid clicks rose 4% compared with the prior quarter, and 18% year on year. The economy may be in bad shape but people continue to use the web and click on ads. with increasing regularity. Why shouldn't they ? They are only interested in what they are looking for, no tthe cost to the poor long-suffering advertisers.

Google is also continuing to increase its workforce (unlike eBay which has clearly lost the plot) adding another 519 people over the quarter. Google company now employs 20,123 people.

Yahoo! is set to announce its quarterly earnings next week, against a backdrop of a possible renewed bid from Microsoft. Yahoo's share now trade around $13 compared to the more than $30 they turned down from Microsoft just a few short months ago, oh dear.

Saturday, October 11

Goodwin to Leave RBS Monday?

Stocks and Shares - Fred Goodwin to leave RBS ?

Stock Market Investing

There are plenty of people who don't like Fred Goodwin, the CEO of the fast-dwindling Royal Bank of Scotland, and plenty of people who have been calling for his head. I could write a whole blog post just about him, but I won't bother. Many of the comments made about him on the bulletin boards are highly derogatory and I won't repeat them here as this is a family blog.

But now it seems that he may be given the order of the mucky boot as early as next Monday, presumably without a golden parachute.

Why do I say this ? Am I psychic or a city insider ? No, unfortunately not. The fact is I have just read Robert Peston's blog, over at the BBC site, who for his part appears to be psychic, city insider, and government mouthpiece all rolled into one.

On his blog he says "Goodwin has told colleagues that his priority is to raise the desirable new capital, and that he wouldn't stay in his job after that if shareholders wanted him to go.

That's his coded way of saying he's off, possibly as soon as Monday - and he'll be replaced by the former Abbey finance director, Stephen Hester, who is currently chief executive of British Land."

He also says he expects HBOS, Lloyds TSB and Barclays to reveal that they are raising up to £25bn between them.

So we shall see just how reliable Mr Peston's information is. I wonder if he does share tips ?

UPDATE: According to the FT "Institutional investors made it clear Fred would have to step down if RBS came back to the market to raise capital. One investor said the price of raising capital would be a change of management. And the bank is aware of that."

Friday, October 10

Market Meltdown Crash Carnage Capitulation

Stocks and Shares - Market Meltdown Carnage Crash Capitulation?

Buying Stocks and Shares

Headless chickens coming home to roost?

Markets slumped nearly 10% in Asia, they are down 8% in Europe and the FTSE. What will the DOW, Nasdaq and S&P do this when they open?

Lots of people are talking about capitulation i.e. everyone just throws in the towel and gives up, which is when the markets bottom and start going back up.

I was shocked last night when watching the TV (in the UK) to see Michael Portillo (ex. Conservative Minister and now mediaman) to say he found the current situation 'terrifying'. Maybe he's losing some of his own money in this meltdown, or maybe I'm just being churlish. Be that as it may, his sentiment was significant in my mind by its forcefulness and indicated to me that we may be close to a bottom. The public at large is genuinely worried about what is happening to their money. They don't know where to put it!

Shares plummet 10% or more a day so you are tempted to put your money into cash. But where do you put your cash? 300,000 people in the UK have money in Icelandic banks which have just gone bust. The UK government has guaranteed their deposits but people are worried nevertheless and in Portillo's words terrified. This is real money people are risking.

My mother-in-law is talking about banks not lending money to each other!

So to my mind a capitulation could be close.

So how can we recognize capitulation? According to the highly experienced Art Cashin there are 3 things to look for.

  1. Markets fall and finish at the lows of the day
  2. Markets open lower and fall again until around 11 a.m.
  3. Around 11 a.m. markets turn around and roar back up.

After this you tend to get a market recovery that lasts a few months. Things may be different of course this time,but I will be curious to find out.

So not long to wait to see if these criteria are fulfilled today (Friday) if they aren't then we may just have to wait a little longer.

Lawrence Lindsay has just been on CNBC saying that the DOW might drop to 7200 and the S&P to 776.

Bear in mind too that Warren Buffett has been buying lately Warren Buffett Video.

Thursday, October 9

DOW Jones NASDAQ Plunge Again

Stocks and Shares - DOW Jones, NASDAQ and S&P Plummet Again Today At Close - Is this Capitulation?

A few days ago Jim Cramer was on CNBC TV telling people to stay out of the markets, and he was widely and often rudely criticized for his bearish opinions. If my memory serves me right he said he expected to see the DOW at 8378, well today his call looks pretty good, with the DOW falling 678 points on heavy volume and closing at around 8579, not far away from Jim Cramer's 8378. It could easily do the next 200 tomorrow.

Morgan Stanley down 24%
BoA down 8%
Merril Lynch down 25%
Exxon down 11%
Chevron down 12%
GM down 31% and people saying GM is fighting for its life, with a lot of Wall Street investors betting it won't make it.

A lot of the fall was in the last hour. Due to forced selling, and redemptions and continuing uncertainty in credit markets + credit uncertainty affecting earnings and financials - wider losses e.g. credit cards

Is this the capitulation Art Cashin has been looking for - link - if it is we will need to see a further sharp fall tomorrow until around 11 a.m. NY time, followed by a sharp rebound. If that happens Art says there should be a rally of a couple of months duration.

Councils Deposits with Icelandic Banks

Online Trading - Full List of Councils and Public Authorities with Money in Icelandic Banks

Stocks and Shares

For the full list of councils with deposits in failed Icelandic bank Landsbanki or its UK branch Heritable, or in other Icelandic institutions

  • Aylesbury District Council - £3 million
  • Barnet Council- £27 million
  • Bassetlaw District Council - £8 million
  • Bracknell Forest - TBC
  • Brent - £15 million
  • Breckland Council - £12 million
  • Bristol City Council - £8 million
  • Bridgend Council - £1 million
  • Bromley Borough Council - £5 million
  • Braintree District - £5 million
  • Buckinghamshire - £5 million
  • Burnley Council - TBC
  • Caerphilly County Council - £15 million.
  • Cheltenham Borough Council - £11 million
  • Cambridge City Council - £9 million
  • Cherwell District Council - £6.5 million
  • Cheshire County Council - £8.5 million
  • Canterbury City Council - £6 million
  • Ceredigion - £5.5 million
  • Cornwall County Council - £5 million
  • Cotswold District Council - £2 million
  • Chorley Council - TBC
  • Colchester Borough Council - £4 million
  • Daventry District Council - £8 million
  • Derwentside District Council - £7 million
  • Doncaster Council - £3 million
  • Dorset County Council - £28.1 million
  • Dover District Council - £1 million
  • East Ayrshire - £3 million
  • East Lindsey District Council - £4 million
  • East Staffordshire Borough Council - £4 million
  • Exeter City Council - £5 million
  • Flintshire Council - £3.7 million
  • Gateshead Council - £4.5 million
  • Gloucestershire County Council - £12 million
  • Gloucester City Council - £2 million
  • Great Yarmouth - £2 million
  • Havering Council - £12.5 million
  • Hertfordshire - £28 million
  • Hertsmere Borough Council - £1 million
  • Hillingdon Council - £20 million
  • Ipswich Borough Council - £5 million
  • Kent County Council - £50 million
  • Kirklees Council - £1 million
  • Lancashire County Council - £10 million
  • Lancaster City Council - £6 million
  • Lewes District Council - £1 million
  • Moray Council - £2 million
  • Monmouthshire Council - £1.2 million
  • Nottingham City Council - £42 million
  • Norfolk County Council - £32.5 million
  • North Ayrshire - £15 million
  • Northumberland County Council - £23 million
  • North East Lincolnshire Council - £7 million
  • North Lincolnshire Council - £ 5.5 million
  • North Somerset - £3 million
  • Newark and Sherwood District Council - £2 million
  • North Wiltshire District Council - £4 million
  • Oxfordshire County Council - £5 million
  • Oxfordshire District Council - £2.5 million
  • Oxford City Council - £4.5 million
  • Perth and Kinross Council - £1 million
  • Powys Council £4 million
  • Plymouth City Council £13 million
  • Redcar and Cleveland Council - £6 million
  • Rotherham Council - £3.8 million Rhondda Cynon Taff Council - £3 million
  • Stoke-on-Trent Council - £5 million
  • Somerset County Council - £25 million
  • Surrey County Council - £20 million
  • South Lanarkshire Council - £7.5 million
  • Sutton Council - £5.5 million South Ayrshire - £5 million
  • Solihull Council - £3 million
  • Stroud - £3 million Slough Council - £2.5 million
  • South Ham District Council - £1.25 million
  • Sevenoaks District Council - £1 million
  • Tonbridge and Malling Borough Council - £1 million
  • Tewkesbury Council - £1 million
  • Vale of White Horse District Council - £1 million
  • Westminster Council - £17 million
    West Sussex - £12.9 million
    Wakefield - £9 million
    West Oxfordshire District Council - £9 million
    Wyre Forest District Council - £9 million
    Wiltshire County Council - £8 million
    West Lindsey District Council - £7 million
    Wokingham Borough Council - £5 million
    Wycombe District Council - £2.5 million
    Winchester - £1 million
    Wychavon District Council - TBC

  • Other affected bodies
  • Metropolitan Police - £30 million
  • Transport For London - £40 million
  • Dorset Police Authority - £7 million
  • West Yorkshire Police Authority - £6 million
  • Sussex Police Authority - £6.8 million
  • Hertfordshire Police Authority - £3 million
  • Gwent Police Authority - £1 million

This is the full list at the moment but presumably there may be others at risk if things get worse.

Wednesday, October 8

DOW Jones No Capitulation Yet

Stocks and Shares - DOW Jones Today - No Capitulation Yet

The Dow Jones dropped again today finishing down 189 points after spending the day bouncing from one extreme to the other. It was the sixth successive day of losses, but was still not capitulation as defined by Art Cashin.

The Nasdaq fell 0.8% , the S&P 500 fell 1.1%.

According to Ryan Detrick, at Schaeffer's Investment Research "We're due for some type of bounce."

"The Fed and world governments have done a lot up until now and clearly nothing has worked. This move here is one the last bullets in the chamber."

Art Cashin would have preferred to see the markets go straight down from the open then bounce later in the day, but that didn’t happen, partly because the FED announced its rate cut before the markets opened. So it appears we still haven’t had the capitulation people are waiting for.

Detrick warned that money is being withdrawn from hedge funds and companies are starting to report earnings that may disappoint.

Central banks around the world made a co-ordinated 50 basis point rate cut, but that will take time to have an effect.

The cut cause a rally in Europe, but it didn’t last long. The FTSE ended down 5.2%. The DAX lost 5.9% and the CAC 40 fell 6.3%.

At 3:39 p.m., Henry Paulson gave an update on the economy and the $700 billion government bailout, and stocks turned negative again.

David R. Kotok, CIO of Cumberland Advisors, said Wall Street needs to see a climactic selling frenzy. This hasn’t happened because "Each time, the trigger for the reversal was an intervention. Therefore you didn't have a clean climax in which the last investor capitulates and throws in the towel in the ring. And here again, we didn't get it this morning."

Kotok says "we are in a bottoming process" but just haven't hit the actual bottom yet.
"I thought we might see it today … but we have this issue of response to an intervention," he said. "True terror doesn't get saved by a Federal intervention and that's the missing link. And it may be that we have exhausted the sellers without having the true terror. That remains to be seen."

So it would appear now that Government intervention is actually making things worse by preventing panic selling. The only thing left for the Government to do therefore is to give up and stop trying to stop the selling ! This is getting quite religious.

Kenneth S. Rogoff, from Harvard University on the other hand says the 50 basus point cut wasn’t aggressive enough. "The panic is so overwhelming at this point, that they really need to fire on all fronts," they "should have been more aggressive."

"They think 50 basis points is aggressive. But in this environment it's not. It should have been 100."

Personally I tend towards the do nothing theory and just let everyone panic until they realize that they are all panicked out.

Global Co-ordinated Rate Cut Announced

Stocks and Shares - Global Co-ordinated Rate Cut Announced

The FED, the Bank of England and the ECB have all managed to come together to agree to a co-ordinated rate cut of 0.5%.

Will the markets rally from here ? Well, Art Cashin would probably want to see the US markets drop at the open and then rebound, as this would then signal capitulation and a rebound in the markets for a couple of months. To see Art Cashin's explanation of capitulation and what it should look like and where we might be there today check out - capitulation

People have been calling for a co-ordinated rate cut for a while now, but now they have got it they may of course want something else.

Capitulation and Share Tips

Online Stock Trading - Rescue Plan and Newspaper Share Tips

Buying Stocks and Shares

Is this the end of the beginning or the beginning of the end or time to stock up on cheap shares?
Brown and Darling have announced their part nationalisation of the banks, was this all part of their secret socialist plan ? (I doubt it, as that would indicate some sort of intelligence at work). It is possible that it will, however, coincide with a short-term bottom and recovery in the markets, for why I say this see – Capitulation of the Stock Market?

The Dow closed down 508 points, the Nasdaq fell 108 and the S&P was down 60 at 996.23. Tokyo fell 9%. The FTSE is down 240 at the moment.

The transubstantiation of cash

CBA in talks with HBOS on BankWest takeover
Poor ad-spend forecasts hurts ITV

Fed prepares for rate cut as IMF recommends aggressive action in Europe

N Brown Hold on
Mouchel Hold
Carluccio's - Avoid
Tiddler to Watch : AMZ Holdings

BA shares hit by pensions fund worries
Oxford BioMedica boost
Ladbrokes fell 5.75p as they would be liable if Hilton Hotels Corporation (HHC) defaults

RBS boardroom clear-out follows share collapse (why did I always know that bankers were useless arrogant idiots? –Ed.)

Darling's £50-bn gamble won’t stave off recession
Recapitalisation: the nuclear option

Michael Page Sell
Northern Foods Hold
Kewill - Avoid

BA scams customers, says Ryanair boss (so what else is new ?)

IMF calls for action now to fight global recession
N Brown - Hold
Northern Foods - Hold
Carluccio's - Hold

Refinancing doesn’t calm Yell worries
Dmatek up after saying it has started takeover talks with LMS Capital

Share of the Day - Game Group

Software cutbacks hit Sage

Tuesday, October 7

Was that Capitulation?

Stocks and Shares - Have we Seen the Capitulation?

If you have been watching the stock markets and CNBC TV you will know that what people have been waiting for is capitulation. Well it is possible that we saw the first stage of capitulation today in New York.

Why do I make such a bold pronouncement? Well, because it's not mine. Art Cashin, who has been working on the NYSE for many decades described in simple terms what capitulation should look like.

First he said he was disappointed with the rally after the 800 point drop on Monday, that was not the capitulation he wanted to see. But then he went on to describe what a classic capitulation looks like.

He said that the market needs to fall off sharply and finish at the lows for the day (which is what happened today in New York - Tuesday). That is stage 1.

Then the next day (Wednesday) the market needs to start the day by falling further. This fall should continue until about 11.30 NY time, after which the market needs to rally sharply. This would be a sign that the markets have turned and will be in an uptrend for a couple of months.

So we don't have long to wait to see if that is what happens. Art Cashin has lots of experience on the stock market, so it will be interesting to see a) if things pan out as he described and b) if it leads to a recovery for a couple of months. Thank you Art !

And don't forget, both Warren Buffett and Anthony Bolton have been buying recently.

Buddy Can You Spare a Billion?

Stocks and Shares - Buddy Can You Spare a Billion?

Stock Market Investing

Are you suffering from the credit crunch? You can't pay your mortgage? You can't pay your rent? You can't pay your credit cards? Your car is falling apart 'cause you can't afford the repairs? You're switching the gas and electricity off to save money? You may be evicted? Well stop your self-centered whingeing and spare a thought for those who have lost billions ! Have you ever lost a few billion? I thought not. Well it probably doesn't feel good.

In fact it reminds me of the Tommy Cooper joke :

I went to the doctor's the other day. He said "Say aah". I said "Why?" He said "My cat's just died."

So, enough flippancy, here's the serious list of the suffering billionaires, the fact that they were the architects of their own and everyone else's downfall probably doesn't help, donations no doubt are welcome. Gordon Brown "Let them Eat Waste"- obviously knew tough times were ahead when he put in his expenses claim for £15 for lightbulbs. Very prudent Gordon, why can't we al be so clever?

  • Leslie Gonda - from $1.4 billion to mere millionaire .
  • Louis Gonda - from $1.7 billion to mere millionaire - clearly a family in mourning
  • Maurice Greenberg from $2.8 billion to mere millionaire
  • Ernest Rady - from $2.1 billion to mere millionaire
  • Clemmie Dixon Spangler Jr. - from $2.9 billion to $2 billion
  • Ernest Stempel - from $1.7 billion to mere millionaire
  • Steven Udvar-Hazy - from $4.1 billion to $2.8 billion
  • Sanford Weill - from $1.7 billion to mere millionaire

Monday, October 6

Warren Buffett's Investment

warren buffett

Stocks and Shares - Warren Buffett's Recent Buys

What has Warren Buffett been doing while the markets have been tanking? He's been investing. For reasons known only to myself I have managed to cobble together a site about Warren Buffett What has Warren Buffett been buying?

Home : Buy Stocks Online

Sunday, October 5

Fidelity Manager on Stocks Buying Spree

Stocks and Shares - Anthony Bolton from Fidelity International is Buying Cheap Stocks

Warren Buffett is not the only one who has started buying stocks (Goldman Sachs, GE, Wells Fargo). Anthony Bolton from Fidelity International thinks that prices at the moment are as cheap as he's seen them in his lifetime. He thinks the UK is at or near the bottom and he has become much more optimistic recently.

He had taken a rest from buying for a couple of years but is now back in the market. He also said that the upturn would be "protracted and slow" but that at 15 months this bear market was already very old. It could be argued of course that this bear market is slightly different to other ones in that it is had led to the bankruptcy of a number of major financial institutions and might still yet lead to the end of capitalism as we know it. But that's just my opinion and Mr Bolton has certainly a better track record at picking bottoms than I have.

So I hope he's right, as it would be nice to pick up some cheap shares and watch them soar! Bring back the tech bubble, that was fun.

What is Mr Bolton buying? From what I can gather he seems to like media stocks and some financials - he has concerns about all the banks "but a lot of those concerns are already reflected in the price."

Home : Buy Stocks Online

Friday, October 3

Warren Buffett Video Interview

Stocks and Shares -Video Interview with Warren Buffett

Charlie Rose has had a one hour video interview with Warren Buffett aka the Oracle of Omaha on the credit crisis. Warren Buffett is probably the most successful investor ever, well-known for his buy and hold value investing strategy. He has recently started buying - GE, Goldman Sachs, Wells Fargo, and when Warren Buffett buys people generally take notice.

For the video interview see The Oracle of Omaha - scroll down and click on 'Charlie Rose'

For Alice Schroeder's new and comprehensive biography on Warren Buffett - The Snowball : Warren Buffet and the Business of Life see The Sage of Omaha