31 December, 2001: Last day in a disastrous year, and we had been burgled twice as well and ... The miss of the year must be Edinburgh Oil and Gas which was on my Explorer's research list and the catch of the year was Marconi, caught that old fish at almost its bottom.
I was doing my research over the past few days (e.g., FT, bulletin boards and so on). I think the chart for FTSE100 is looking good from this level. My prediction for next year is that FTSE100 will at least reach 6,000, perhaps in the first half of 2002. Whether it will hold onto its gains at the end of the year is another matter.
At the moment, I am particularly interested in Investment Trusts, since they can be traded as liquidly as shares while some of them are currently carrying good discounts to their asset values with significant yields (40% or so because the falling share prices!). I think it will be worthwhile to invest in Investment Trusts who specialise in Japan, Index-linked (such as Close FTSE100) and property. You can do some research on III. Have a prosperous and lucky 2002!
27th December, 2001: Well, there are always going to uncertainties. I was studying some high-yielding shares in this market at the moment. Today, I bought a few, e.g., Amberley, UK Coal, Newcastle United. Let's see how they go for me. With the bank paying pathetic interests, I think it is on everybody's mind that alternative ways of investments must be sought. So coming back to the Stock Market is a distinct option, I think. With the Dow Jones going level and square for so long, there has to be a decisive change of direction, either up or down. Ha, that is not really clever. But my guess is that it will actually go up from here, if history repeats itself with Nikkei looking more likely for a good run from the current level. You can either worry yourself too much with no actions, or you can take a plunge and regret later if it fails, ha! Anyway, I might have had one drink too much since this is a festival period.
There must be many stocks which can double from their current price level in one or two years time. Let's go find them. Cheer up.
12 December, 2001: With Christmas coming soon, this looks increasingly likely that there won't be much big bonus for the city folks this year. Well, they will be ok, if they had been saving up!
Gazing at the charts is a downbeat affair nowadays. I think the trend is going down, and very rapidly so! The cut of US interest rate to 1.75% is almost disastrous to signal the end game for the mini-bull run, which was spurred on by the September 11 event, ironically.
Now you have had your fun, it is time to hybernate and enjoy your beauty sleep. Of course, there will be a time when a bull run emerges out of the blue. So the best advice is to keep on observing the market and pick up the bargains at bottom price. With this mini-run as a foundation, there should be some sort of fundamental support for the whole market. This time, the slump won't be that bad, I think. So keep buying on weakness for the long run. Be brave and keep cool!
6th December, 2001: The bull run is almost coming to its end. But if they capture Bin Laden, then there might be a celebration rally all the way to Christmas.
I have been looking around for values. I think I am going to buy a few water shares at rock bottom prices with good yields. They will come up one day, and I am patient.
I have very little enthusiasm about techs at this level. I'd rather invest in income shares with a good yield, say, around 6%, which is better than the banks and the building societies.
For my observations below, I got it wrong with Psion. But I dislike this one tremendously. This is the one some of our pension money is being misused, I think. Anyway, if you are in profit, cash in.
3rd December, 2001: Chart-gazing is an intense business as you have to make up your mind in the myrid of pointers. I studied the Dow Jones charts for all periods at length tonight. The gloomy news is that my gut feeling tells me that the Dow Jones is heading for a major correction of all time. But what could be the trigger for such a horrendous event? Could it be World War III? Obviously, that would be mad! In any case, the risk of investing in the Dow Jones is so high that you should stay well away from the Stock Market for the months to come. If you have anything that is still in profit, you may think about cashing in all of them and sit on your cash for now.
While the Nasdaq chart does not look that bad, still, it is doubtful if the Nasdaq could hold onto a life of its own if the Dow Jones collapses. To be honest, this looks like a dodgy market at the moment.
Several key issues must be resolved before we can see certainty in this market and make some decent money under a normal condition. The capture of Bin Laden could be a trigger for a reversal of the recent weakness in this legless market. The coming-to-terms between Israelis and Palestanians could be another key issue. The avoidance of the Argentinian crisis would be the last piece of the Jigsaw. On the surface, we seem to have avoided or beaten a global recession with the American economy showing some signs of recovery in recent months. Deep down, it might just have a ray of sunshine before the darkness sets in. It is doom and gloom in the charts.
I was looking at the good old utility shares, some of which do offer a good dividend yield. As we are in a low inflation era, the low interest rate for our cash at the bank is actually not that bad. So if you can't find your heart in this market, you'd better leave your cash in the bank and see it grow at a slower rate. It is better to be safe than sorry.
Remember, out of 100 people who invest in the market (shares, currencies, etc), normally there is only ONE winner! Could that be you?! Take care and good luck. Funny enough, a lot of tech investment trusts are selling at good discounts at the moment, while remember, we rushed for them at a huge premium not too too long ago. Hmmmmmmmmmmmmmmm!
Nasdaq has climbed out of the short-term and medium-term resistance lines, which is excellent news for tech investors. But it has come to confront the long-term resistance line, which will be a huge quest next week. All eyes will be on this battle to see whether Nasdaq has finally bottomed out. If it does, then despite the momentary blips, the general trend will be on the up and we should all throw our cautions to the wind and buy more tech stocks (be choosy though!).
The story for Dow Jones is quite different. It has broken the short-term resistance line and has yet to challenge the medium to long-term resistance lines. It will be quite a hard task for the Dow from now on.
Maybe, there is a case for continuing the rotation we have witnessed into tech stocks. The great bull run for techs will not be with us in the foreseeable future, but the sector as a whole may offer more upside than other stocks. This should include both technology shares and telecom shares, but make sure that you avoid the media stocks.
Yes, last week, I did make a Lastminute decision to buy Lastminute.com. I was glad that I avoided it in its floatation. Now, after the test of time, I think this one might just work. I will buy some more if there is any weakness.
You may want to read this interesting article from Reuters, which will make your mind go around further.
17 November 2001: How time flies! I am a bit surprised at how smoothly the war in Afganistan has gone about and the euphoria in the market because of this. I did miss this run. Well, I did manage to cash in one more winner in British Airways at a 33% gain, which is a shock to me. Maybe they do fly!
The outlook for the market is not optimistic, since the charts for both Nasdaq and Dow Jones are both encountering long-term resistence lines. If next week does not hold up, then the long-term trend downwards for the whole market will continue. However, with stockbrokers screaming for their bonuses, we may still see some surprises. If you are in profit, I would advise to cash in asap!!! If you still want to be in, trawl at the bottom: do not buy the momentum shares which had enjoyed their momentums. Some of them are already over-valued. I might buy one or two penny shares, just for the fun of it. Otherwise, I would still be sitting tight on my cash.
There are tremendous amount of uncertainties. Further terrorist attacks over the festival period would be the worst nightmare. Be very careful now, don't get carried away. Yes, the bull run will eventually come, and it would be underpinned by this mini-run that we had in the past few weeks. Investors had a timely courage-booster, but the fundamentals are still appalling and the uncertainty is still too much to be ignored.
27 October 2001: There are only two ways to go from here, up or down. I think the most likely direction is for the market to fall sharply in the coming weeks, sending shock waves all around the world. This is not pessimism at work, as you know I am no pessimist. I think this is what they say as reality checks in. The American economy will rear its ugly tail in the coming weeks with more gloomy and yet more tell-tale signs of the Big R word (recession). And the weakness in the American economy has already started to hurt everybody deep down the line.
On the other hand, for long-term investors, the recovery will eventually come. So the prevailing investment philosophy should be contrarian, picking up from the bottom of this market. Adding to that, stay invested for the long-term benefit. I have finally bought myself a stakeholder pension from Standard Life last week. I guess I have got quite a balanced portfolio at the moment,albeit, in a tiny scale. I am holding onto my cash tightly and wait for the right moments to invest again. Let's wait and see. Patience is a virtue!!!
21 October, 2001: I got out just before the market started to look a bit wobbly. I made around £2,000 this time, which is quite good since this has been long time coming. Too long, really! Surely, this gives me a boost of confidence. Yes, we are living in a rather uncertain or treacherous world. But I do have the same feeling as the bull run we had two years back. I have been doing some research on some stocks. I will publish them as soon as possible. So watch this space. Together, we may identify winners of greater multitude. Yes, the cash in my account is itching to multiply. Patience is a virtue. A bull run will start probably after this week. So do your research now and make your own choices. There are many potential good winners out there. I know some people have been trawling the bottom to great effects. It is also a risky game. The best strategy is to find the winners for the medium term, so that they should have significant fundamental support for the short-term. And nobody is going to blame you when you cash in if there is a short-term bull run on the price.
The best share I bought in this last lot was Marconi. I bought at 18.75 pence and sold at 43 pence. On the other ones, I only made around 50% profit at most. So have to try again and do better, ha! Next time, I promise that I will let you what I have bought. Well, since nobody is really watching this space. It will be a quiet earner.
14 October 2001: Are you in a catch-22 situation because you are feeling that you have missed the boat? Well, don't be. I reckon this market still has tremendous upside from here. Obviously, we took the gamble and they are paying off now, with 30%, 40% profits on a number of our selections. We have agreed that we will only cash in if they hit 100%. It is better than keeping the money in the bank, isn't it? We live in a very dis-integrated world, whereby many of us seem to live in different spheres of humanity. Yes, we sympathise with those involved in the war and we carefully observe what the terrorists would want to do to this world. Eventually, equilibrium will be reached of some sort. But curiously, the market always guns up in this sort of turmoils, as if people would want to indulge in a bit more fantasy than usual, in times of greater uncertainty and fluctuation. So be brave and make up your own mind. Making money from investing in the stock market is never an easy thing. So don't kick yourself yet, kick that bull ass and make it run faster.
May peace and harmony be with us all.
4 October, 2001: Something good seems to be coming out of the American Tragedy. And more curiously perhaps for share investors, this is perhaps the best time ever to invest in the Stock Market. With concerted international efforts in all arenas achieved through the response after the Tragedy, it is likely that a potential global recession has been avoided at the 11th hour. Obviously, from what I have seen so far (politically, economically and so on), there are a lot of encouraging signs for a good run for the Stock Market from these levels. One of my selections has reached 30% gain as of today. Let's wait and see. Gods willing, if we have a war, let's have a good one for humanity.
29 September, 2001: So the world seems to be working closerly together than ever, for better or for worse. Let's hope it is for better. Maybe, we have really learnt a lesson from the American Tragedy on 11 September.
Yes, I did invest a certain amount of money in the market in the past two weeks. I am holding these for the long term. Currently, half of them are in green and another half in red. So nothing special, really. More to report later.
Today, we should talk about stakeholder pension. I have just received a reminder from Hargreaves. It seems immediate action is required. The basic idea is that you invest £2808 and the government tops it up with £792, which makes up £3600. This is a long-term investment, free of tax and capital gains. They seem to have obtained a good deal from Standard Life. Let's support this mutual giant with a bit more of our money. I think it is a good deal. If you have something to spare for your future (you can get your hands on your stakeholder pension when you reach 50), then go for it!
For the TMTs, I am really praying that the telecoms should bounce back a little, well, since I have bought most of the telecoms. Sector consolidation is a must for the next move. Fingers crossed.
18 September 2001: Time to sort out our family fortune. It came to both of us(my wife and myself) that there are some shares of sound values for the long term in this market. So we have decided to invest some money and see how this strategy works out in the longer run. I think my target profitability is about a minimum of 20%, which seems to be better than leaving the cash in the bank, since the rates has just been cut to 4.75% by Bank of England today. The main value could come in over-reaction to the American Tragedy in the market and the concerted actions by central banks around the globe has signified a new era of close interaction. Please remember it is always better to make these individual family decisions between the family members, not by youself alone!
Many have argued that this potential global recession is going to bite deeper than previous ones, since the world economy today is so interwoven. Then, the best way to save us all from this disastrous scenarios is by working together closely. If any, the American Tragedy does remind us that we live in and share the same global Commons where we need to work together for the management of its resources and its sustainable development. I hope for the best. God bless us all. It is important that the loss of all those innocent lives should serve a significant purpose to the human race as a whole over the long run. I look forword to seeing the birth of a new era!
15 September 2001: The American Tragedy is the reason that all of us are feeling a bit like staring at the vacuum of our fates--not knowing where, when, what, how, and why. To show a mark of respect, I would like to quote the following from Hargreaves Lansdown:
WHAT NOW FOR WORLD STOCKMARKETS?
In the tragic aftermath of the terrorist attack on the US any chance that recession might have been averted has probably disappeared. Just as we saw events unfurl in the Gulf War ten years ago, visions of buildings crumbling will paralyse the American consumer. It is only the American consumer that has kept the world economy going. The security at airports, ports, stations and in public buildings will cause Americans to "stay at home". The associated spending - clothes, restaurants etc - must decline. The knock-on effect will probably be worse than envisaged. Whilst there is talk that the G8 countries will orchestrate a radical interest rate cut, only time will tell whether this will outweigh the likely increase in fuel prices and reluctance to consume.
Today, I believe that investors could sensibly pursue the strategy of increasing liquidity in their portfolios. It doesn't seem wrong to me today to sell poor performing investments, and look to real quality such as gilt edged stock or even hold cash pending a further possible shakeout in the aftermath of the World Trade Center disaster.
PETER K. HARGREAVES
CHIEF EXECUTIVE
This coming from someone who makes a living by your investment in the market is really a sobre reminder that sometimes we do come back to our humane senses after disasters like this one. It is not really going to be the end of our world, it is just going to be the beginning of a new era. Let's hope it is for the better over the long run. Sit on your hands is the best advice at the moment from anyone, unless you have to make a living on this market for your daily expenses........Well, tough it out and observe and think long and hard about what has gone so wrong with humanity this far!
8 September, 2001: The worst is still to come. The best site for looking at charts is www.ft.com, and I have had a good gaze at them all. I think the Nasdaq chart is actually looking better than the Dow Jones' chart. The latter has a significant downside, possibly to 8,000 or even 6,500 if we write off all the euphoria connected with the Clinton years. That is a nightmare scenario for share investment, long term or short term. The Nasdaq chart still suggests a slow death by a thousand cuts, so more sliding is more likely than a major landslide than the Dow.
The game now is to be brave and make up your own mind about this market!
Fortunately, I still have not made up my mind about this year's share ISA. Maybe, I will wait a bit longer, or maybe I will just be the dare devil to catch the falling knives. In that sense, it is more likely that I will try to invest in a niche ISA, such as Japan or Far East. What goes round comes around, so will be the fortune of economy in the world. It is the scare fact which is going to hunt the US market for a long time. A bit like the hangover after the honeymoon. Hey, are we talking about s.. or sexy shares?! Mad, you have got to be mad to invest in this share market at the moment and some of the prices are mad enough to justify human madness. Mad Market Disease (MMD), have you caught it yet?!
If you have spare cash, you have got to buy the cash ISAs which are tax efficient and accessible. If you are thinking about buying a house, then your chance of buying it on the cheap is coming in the next few months. When the job market collapses, the housing market will too. If you have still got some more cash available, then how about carpet begging in mutual organisations or investing in a stakeholder pension as per my previous comments. Well, if.....if you are that cash rich, how about taking up a small business catering for recession, ha! No shares, just share the jokes for now and watch a bit of football if your wife goes shopping!
2 September 2001: Hey, guys, so this is a serious downturn for the Dow and Nas. Can they go down further from here? The Nasdaq chart does not suggest a significant downturn, which is good news for long-term investors. I am thinking of buying my shares ISA for this year at this level. But will I buy tech ISA or something else? I think it is highly likely that I will avoid the techs for now, since the Nasdaq chart seems to suggest a death by a thousand cuts scenario for the next few months. So it will be a bumpy range-bound ride from now on. For short-term investors, this is perhaps the worst nightmare ever.
I am not going to invest any new money into short-term shares at the moment. It is just not that exciting. The best thing to do at the moment is wait and see. If you need to go into this market for your daily keeping, then watch out for the new comers and pennies. It is there that you might be able to make some money if you are clever enough.
26 August 2001: Take your pick or spin a coin. Who knows which way this market is going next?! I think the chance for a severe downturn for all stock markets are still very much with us. It all depends on the US economy. Though lots of spare cash might be flowing into the US economy, the lack of confidence in future job prospects in industry and business might prevent the US consumers from spending all that dosh. If they choose to save more than they spend, we are in for the darkest era for share investment.
Obviously, that is the general outlook. Clever investors can make money rain or shine. I still favour the bios and explorers and some penny shares (like Screen). Do your research and be brave if you want to stay in. Otherwise, look away now and wait for the signs of a major re-direction, I mean recovery
18 August 2001: So I was right about the Nasdaq as it is now heading towards its leggy position of 1,700. But hold on, I have had another look at its chart. I think this time it is going to be a few painful months ahead rather than a plunge and a straight come-back. So stay away and watch the new football season for a while. It is not the time to plunge yet. It is far better to leave your money in the saving account and earn some interest while the market gets over this summer of sickness. The best saving rate is the E-saving account at Nationwide. Be a member and enjoy the benefit, you know what I mean.
Take care and be happy. The time for making money out of the stock market will be back with us. And when that happens, I should let you know the first here. Ha!
11 August: So my apprehension about the Nasdaq was quite right. It was down more than 100 points on the week. So when is the big rally? It is funny that us human beings tend to go for the easier option and look for a big rally without the leg-up sign, ha! I think the rally will only come when everyone (well, almost all of us) has been scared or bored to the extremely. The market would be so blue that we'd singing the song for the end of the world. So look out for that drop to 1,600 for the Nasdaq.
For the long-term investors, it is great time to invest in tracker funds. Hargreaves Lansdown seems to be offering the best discount. Also, don't forget to invest in mutual funds, such as ones from Standard Life, Liverpool Victoria, Scottish Legal Life, M&G etc.. Check it out with Hargreaves.
So some of you have to stay in the market to stay bubbly and lively. It is time to look at the explorers, biotechs and special-situation shares (SSSs), which are due for some news, bids, or whatever. These are extremely volatile and risky. So watch them day in day out, and be sure to run your stop-loss system.
For the contrarian investors, it is better to stay out at the moment. The market could go either way in a big margin, so the margin for error is really big. Take care.
3 August 2001: Hey, guys, I think my optimism last week was a bit short-sighted. Looking at the chart of Nasdaq again this week, I think this one is a downer again! It has not managed a major rally over the resistance line, so don't jump into the turbulent water yet, there are many sharks about.
Did you read the reports on Reuters.com? Ha, so they are rather pessimistic about the outlook of Corporate America. I guess only the most profitable companies will outperform this year. So that is funny. No more growth story, just old boring profitability. If you want to find a profitable (or sustainably profitable) company in techs, you need to wear your magnifier!
One suspicious value buy at the moment is Trafficmaster at 88.75 pence. I think this one is a good each way bet. Good luck.
23 July: This year has certainly been a difficult year to make good money out of this market. While technology shares suffered a massive hangover from the euphoria in the past year or two, some of the oldies have gone out of the roof beyond everybody's expectation.
At the beginning of the year, I researched into two interesting areas, e.g. biotechs and explorers. To date, winners from the bio-list may be far and between as follows: Advanced Medicine Group: +12.5%; Biotrace: +51.35%; Fulcrum Pharma: +13.33%; Medical House: +50%; Skyepharma: +25%; Theratase: +37.84%.
For the explorers, there are a number of good winners as the following: Gold Mines of Sardina: +26.09%; Alkane Energy: 33.33%; Aminex: +13.46%; Anglesey Mining: +25%; Dragon Oil: +111.43%; Edinburgh Oil and Gas: +170%; JKX Oil and Gas: +16.36%; Navan Mining: +9.2%; Paladine Resources: +53.13%; Westmount Energy: +115.79%. The whole list is up by 16.88% to date. Perhaps, we should have run a investment fund in the explorers and made a mint by now, ha!
To be honest, I am currently out of the market altogether. I sometimes take a lazy look at it and look away again. My heart is out of this at the moment. It is just the passion is gone. I currently have two private portfolios, one is down about 50%, the other one is almost nowhere to be seen apart from two bright spots, where 50% of the fund is invested. So I will have to leave them like that and see what will happen to them, say, in five or ten years' time. Some of them would have disappeared by then, and I am only praying for two or three stars in each portfolio to shine. Fingers crossed!
Ok, I am out of the market. So they say sometimes you can see better that way. My gut feeling is that Dow Jones will rally from 10,000 and Nasdaq from 2,000, barring any major misfortunes in this unpredicatable world. This means that we should start our buying from the current levels and chase them all the way up! Of course, nobody is listening to me, myself included. Let's wait for the footie and indulge in our fantasies of goals and championship for a while!
16 June: The chart of Nasdaq is really not looking so good at the moment. Implicitly, I have been wondering whether it is going to touch 1,600 to make that all essential second leg before it can finally be sent on its way for substantial recovery. Under the circumstances, I would advise you to be extremely cautious on taking out positions on tech-type shares.
Having been surprised at the recent surge of explorer stocks last week, I notice that they are gunning up for more. When the market is volatile and nervous like the current one, maybe people start to prefer the risks in exploring for the unknown: Alkane Energy: +43.01%; Anglesey Mining: +25%; Dragon Oil +81.43%; Edinburgh Oil and Gas +115%(AMAZING!); Gold Mines of Sardinia, +45.65%; JKX Oil & Gas, 14.55%; Minmet, 10.94%; Navan Mining, +43.68%; Paladin Resources, +75%, Westmount Energy, 118.42% (UNBELIEVEABLE!). It just shows that I was right to research into these two areas: bios and explorers for this year.
If you have made good money this year, you must have beem blindfolded, ha!
Keep your heads up, everyone!
10 June: Somehow, these days I am more pessimistic about the Nasdaq than optimistic. The signs are more about lack of breakouts and a tendency to fall off the cliff again. Let's wait and see.
I was shocked to find so many winners from my explorers' research list as follows: Alkane Energy: +43.01%; Anglesey Mining: +12.5%; Dragon Oil +71.43%; Edinburgh Oil and Gas +95%; Gold Mines of Sardinia, +45.65%; JKX Oil & Gas, 14.55%; Minmet, 10.94%; Navan Mining, +43.68%; Paladin Resources, +75%, Westmount Energy, 118.42% (UNBELIEVEABLE!). It just shows that I was right to research into these two areas: bios and explorers for this year. But pity, I did not follow strictly my own findings, ha! I hope some of you have benefited more than I did. Not too long ago, I was lamenting the lack of winners from the explorers list. It did not take too long to change all that! It has certainly not have been my year this one. I can only look up to the future.
19 May: (sorry, the content was lost in the space again!)
11 May: Our little Screen has continued its magnificant rise to 65% by now. With its main customers being the public-funded police forces, I think this one will weather the slowdown a lot better than others. I am expecting it to rise to £2 before the end of 2001!!!
It is also time to follow the directors and bite into Minmet at 16.75 pence. I am holding this one as another of my hopefuls.
One massive gamble at the moment is Bright Station at 10 pence. It is in a 'to be or not to be' situation. So if you are prepared to lose all, it is worth a gamble. The upside is of course positively linked with the risk involved. I could see it go to 20 pence or more from here. Only gamble what you can lose, remember!
Another gamble is Cable & Wireless at 447.5 pence. This one is going to report next Wednesday. You can either wait for the report and try to do something then or jump in on Monday. This one is certainly interesting to be watched next week.
5 May:
Screen has done us extremely proud with a rise of 56.67%. It has certainly made my day there. Given that this is supposed to be the star of my portfolio, I am looking forward to more gains. We all have our dreams!
Harrier Group has come up nicely with a rise of 15%. It seems that Bob Morton's companies do have more fundamentals for success than most of the others.
What should we do now? I think it is time to reflect upon what has happened to the many failed companies in the market and pick out the winners which may be able to survive this difficult period and succeed. More to report later.
14 April: Happy Easter, everybody! So I was made a fool again by the market. Nasdaq did actually come up last week. But it is still in the danger zone with the index hopping between 1,600 and 2,000. I am not entirely convinced that it will break free next week. I still think that we will see 1,500 one way or the other. Hopefully, the market can prove me wrong. With my bond maturing the week after, I will be more than happy to see FTSE maintaining its current strength.
As for share ISAs, I think I might wait a bit to buy my tech ISAs. Even at this level, we should not be too worried to buy the tech ISAs for the long term. One thing which is clear to me is that the technological lead is either in the US or Europe, but not here in the UK!
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By the way, the only major British tech stock that has won my heart is ARM, which has not really disappointed the City so far. Buy if there is any further weakness. Another candidate might be Pace Micro. All the
