A strange coincidence #finance #investments
By a strange coincidence, my car insurance is due today and the premium has gone up 20%. This seems the norm this year across the industry. I have my insurance with the AA who have been upgraded by brokers Morgan Stanley this morning to ‘overweight’. The share price has shot up by 4.85% in early trading. Every cloud has a silver lining…
It was another strange coincidence that the stock market and London property market recovered following the announcement of quantitative easing earlier this year after the Brexit vote. Jeremy Corbyn mentioned council homes in a PMQ’s question, this week. If the money printed by QE went to build council homes instead of boosting the stock market and the London mortgage market would the jobs created be a strange coincidence too or could we actually do something to boost job creation while boosting the construction industry too. I know the building of basic domestic dwellings isn’t as prestigious or grandiose as building a high-speed railway to nowhere, but it would create more jobs for bricklayers.
The super low-interest rates not only boosts the private housing market but also allows companies to invest through ‘leveraging’ rather than actually inspiring confidence in investors. These low-interest rates also boost consumer spending, at least in the short term. So we have seen retailers make modest gains in their share prices of late, but are these short term gains?
Uncertainty seems to be dominating the London stock market at the moment. The fallout from the Brexit vote lingers and companies developing new oil fields and new drugs on the AIM seem to be out of favour. Solo Oil changed it’s strategy this week and the share price lost ground again. I still think there is stored up value, though. Maybe, when their cash flow improvement hits the balance sheet we will see a better share price?
By another strange coincidence, Monitise has said that they too have changed their strategy and appear to be coming back from the brink after a huge loss. Although a very speculative investment, I think Monitise could be worth the risk.
Premier Foods is making progress and has drifted upwards again this week. They had interest from overseas when the pound was much higher and now the low value of the pound makes PFD a bargain, overseas investors have lost interest. That could change very quickly for the better on a little good news.
That’s all for this week. Over the next week, I’ll be watching the value of the pound and the oil price. Changes in both could present opportunities.
If you would like to follow this blog, just enter your email address at the top of the sidebar and by another strange coincidence, you can follow me on Twitter. There are more ideas on my Facebook page.