Strategy Blog

Background Noises: (parenthesis within <???> are updates)
Iran is very close to being in possession of nuclear war heads. Pakistan, one of the most unstable states in the world, has an arsenal. Northern Korea a national catastrophe also has possession. Only Robert Muggabe can match those states in sublime nastiness, but his country cannot afford anything. North Korea is blocked in its ambitions by China which will not permit ultimate foolishness. India will stamp on a Pakistani political horror which would bring out the bombs. Iran is another kettle of fish, prone to stoning to death women who have confessed under torture to have sex with another man. Iran will suffer selective and massive air strikes from the USA and Israel at first hint of nuclear head rattling. Air Space permissions will be granted by Iraq and Saudi. Even so - this background noise, though not a black swan event because it is expected, will produce a flock of unknowns. I am operating on the basis that reason will prevail and a major war incident will not take place, so:

First: given 'the trend is your friend' - the trend is up. Look at THE chart - the FTSE - not this year, or last year but for the last 10 years or even more. The trend is up. I see no reason why the trend will be otherwise. The imperial conquest of humanity by Islam; the arrival of a massive meteorite; or even cataclysmic global destruction by atomic war or the intervention of a God (thus proving my opinion that there is no such thing, wrong) might alter the trend. Since none of those are immediate prospects... the trend remains our friend. The market will rise.

1.1 Looking at the overview indices of major countries... ALL of the Far East Countries have an upward trend. The West, on the whole is a sideways zig-zag. But who cares about Greece when faced with China! THE trend is up.

Second: individual shares will not, may not, shall rise or fall - who knows? There are two kinds of investor; (except the prats who ring you up to get you to buy unspecified shares (...'which are exciting the analysists upstairs, like never before')soon to be released on the AIM market - who are no investors at all):
The Two Kinds of Investor are:

*Those who do not know what they are doing, and

*Those who know that they do not know what they are doing.

Make every mindset effort to get into the second bracket and be honest with yourself.

Third: Research, keep your mind open for news, read the press, pick up tips, do your own research; learn about charts and charting; always consider the fundamentals of the share, or the sector, or the market - indeed all of them. Watch global events. THINK!

Fourth: Maintain a broad portfolio: have some High Street; Oil; Commodities; Travel; High Technology; gilt edged stuff; and some promising, even if dodgy, penny shares - like I bought Rockhopper and Desire in the 10s and 20s and 30s - stayed faithful for years on the news and the fundamental of the rising price of oil - and have been selling from 150 to 350, and still have some. Old adage - do not put all your eggs in the same basket... not rocket science! (I did that in the beginning and got blown out of the water three times, being a slow learner.)

Fifth: there is no one system, otherwise someone would have found it and be the present King or Queen of the World. (In the hot bed of the City those clever little sods who make thousands a day for themselves with dangerous playing with other folk's money, and do well, even have the arrogance to call themselves: "Masters of the Universe" - like as not they are ever such nasty people who are essentially unhappy... I hope so, as jealousy wracks my soul)

Within the notion of trends I see oil rising, remorslessly. I paid 12p a gallon in my 20s. If oil goes up, oil shares will go up, especially those who are tapping it. BP will, Shell too. As the price goes up, as it will (about 78$ a gallon as I write this in August 2010, let's revisit this from time to time <88$ in November!>), the exploration shares will rise too, especially those who are able to fund exploration out of their own tapping <Rockhopper and Desire did this majestically>. Premier Oil can, so will Desire and Rockhopper. And I am watching Matra (Criteria: Penny Share; oil; exploration; potential - but could go bust. See feature soon.). I have, since writing the above, also come across MAX Petroleum - go to my page on OIL thoughts for details. Now have 10,000. the 'blogs' on the home page, if your scroll down tell you all about it, and the OIL page has a note.

Banks have taken a drubbing, their own stupid fault. But those institutions are manned by some very very clever men. Do you think they have been sitting collecting their bonus payments for only losing 50 billion a year. No - they are getting it right; building funds; bulding funds; building funds - moving into profit. LLOY and RBS will have a strategy to get rid of the government holdings by paying them off as soon as they can. They will do this by going into profit. LLOY just made a billion in a quarter... nearly as good as BP's five billion. These are fundamental facts to play against tales of debt and pain from accidents and mistakes. These great institutions are short term recovery stocks which should be held in my view.
<RBS proudly declare an improved situation only having lost 1.3 BILLION comparted with 1.8 in the Q3. The financial twists to produced this can only be understood by God and the authors who probably have forgotten the meanings as soon as they are written. But their salaries remain close to that of the Archangels. There must be a pay scale up there)
High Yielders:
I did not like Laura Ashley, which has been mentioned to me as a share worth being invested in. There is a dividend of 1p a share... which has remained the same for years, but the share price has come down 300% or so, and thus the YIELD has grown to more than 7%. Might be worth holding for the yield alone, but I think this a dull share with little future - watch me be wrong (or right). When I wrote that it was £0.12. <now 18 - I was dead wrong.>

I like GAME - there is a shop on every high street and in every shopping precinct - and kids and adults buy their stuff - every time I pass these shops there are people young and old, buying. They have been in profit for years though at times I have they have grown too quickly and may have over extended themselves. But the yield is also around 8% - I have been adding them, having already made quite a lot with them, buying and selling. Am continuing to add.

Watch this space.

Global Sell Off

Wendesday 25th August: Thus blared the headline as I munched breakfast and felt faint in front of Bloomberg. BHP BILLINGTON more or less mines for everything so I wondered if I should begin to build a stake (expensive). But that is an aside. The continuing fall in USA house starts and their continuous fall in empoloyed (or increase in unemployed - not sure which has the greatest threatening tone) and the perceived slowing of the RISE in the economy of China and India - still racing in my view - is harming sentiment. I keep an eye on the FTSE which is still above 5,000. Oil is falling in price... 72.73 UK Crude for October. This is about 15% less than a few months ago. Everything points toward opportunity to mutter, 'Double dip.' I just do not see it. I am wrapped and entwined in the eventual ending of evil, and the recent economic bonfire of greed is at ember level, and the present situation is a flare up, not a huge arrival of more dry timber, if I can put it that way. A really hard winter in the north will throw oil into a huge and rapid rise. Read somewhere of 100 by mid-winter. I drink to that, and certainly think it could happen. Although the American debacle and the European follow-on; the banks mess in the UK; and the European follow on... all of these things are not over, but they are contained. If things are so bad, why is inflation on the up. But then that happened in the worst days of the 20s and 30s in Germany etc. Then came a war.. a huge war ... which boosted everything from death to radar. There is going to be a turn, and we could, at this time, be at the bottom. The bottom of the sea has an uneven surface, maybe we are bouncing along the bottom. But is it the bottom of bottoms or are we bouncing along towards a new chasm. Bugger it, I don't like the analogy.

1st February 2011

I can think of no revolution which succeeded without the complicity or tolerance of the military. Historically there is a tendency for the military, in the final analysis, to side with the masses because they would otherwise fire on their own. Iran was a good example, so is Egypt. Circumstances today with the internet bring the real threat to dictators, be they 'elected' or note, of the domino effect of the events in North Africa. Syria is critically a potential for a fall, with the exception that there is a ruling hierarchy of a tribal nature there, similar to the rule of the Serbs within a greater Tito Jugoslavia. When the revolt came it meant a state breakup - this might happen in Syria. Threats to oil and gas supplies and stability in the whole of the Middle East make these collective events almost a Black Swan. Interesting.