The stock market is closed today after a 4 day week that saw a lot of nervousness. Geopolitical risks seemed to be heightened by tensions between the EU and the UK and the US under the leadership of Donald Trump seems to lack direction. The Federal Reserve plans to increase interest rates, Trump wants them to stay low. The United States needs its own people to save and invest. They can’t rely on more inward investment from China and so a more regulated and less risky financial system coupled with higher interest rates would seem to make sense. Meanwhile, we small investors need to avoid putting all our eggs into one basket by diversifying.
Any sign of common-sense and cooperation between the superpowers is good for the global economy. There doesn’t seem to be much chance of that at the moment as things get more volatile. Someone once said there is never a bad day on the stock market, when it’s down you buy and when it’s up you sell. It’s not quite as simple as that but there are always opportunities. We need certainty but we find continued risk and uncertainty.
Solo Oil isn’t the only stock in my portfolio but it is the one I’ve been watching this week. It has soared from 0.42 to 0.53 (BID) since last Friday. The spread is still ridiculously high at 7.55%. The games market makers play! They have triggered a lot of stop-losses this week and stopped the games of some day traders.
I don’t have much news this week except for Solo Oil which made some progress as we await news of Ntorya 2. That well was spudded last month and I thought we might have news before now. Private investors are positive and more people are buying than selling. There are inevitably a few who bought when the shares were at the bottom who are taking their profits.
The stock market will close at lunchtime today and for small investors, it will be the ending of trading for 2016. Did we have a good year? I saw my portfolio take a huge dive following the Brexit vote but as the market recovered my returns recovered too. So I’ll be ending 2016 reasonably happy with my investments.
The value of money used to be determined by the gold standard. Now we have ‘fiat’ money, value seems to be determined by confidence and sentiment. The way the global economy works seems so strange to me. The price of things we are told is determined by supply and demand. (more…)
The other day I read that the majority of members of parliament are now landlords and have their money invested in the London property market. It only needs the government to fund a London building programme to burst that bubble. No wonder they’re all scared of Corbyn getting into number 10! (more…)
When we are looking to invest, we can do a SWOT analysis on the company and look at Strengths, weaknesses, opportunities and threats. One threat that always seems to be there and is hard to predict is political uncertainty. (more…)
Different people view investments differently, some think long term and some think short term. Greed drives some people to invest and the need for financial security drives others. As a small investor I keep an open mind, but favour companies that are basically good companies, but going through a difficult time. (more…)
I added Balfour Beatty to my investment portfolio this week. I’ve had it on my watch list for a while and decided to buy when they became sole contractor for new national infrastructure framework organised by Scope group. (more…)
If you are not familiar with multi-bagger investments, it simply means the value of your investment goes up by multiples of what you originally paid for it. This is a far cry from the 1.5% per year that banks offer on some accounts (including the bonus!). (more…)
Shares in Britain’s house builders are falling today after George Osborne said that he would now give the Bank of England stronger powers to curb mortgage lending. The Bank’s Governor Mark Carney also noted that interest rates could rise sooner than expected. More ‘forward guidance’, so anything can happen. (more…)
Investing in companies that have problems or that are making a loss is contrary to normal wisdom, but the returns often justify the risk. I bought Lloyds Banking Group for just under 30p and today they are just under 80p. That is about as good as it gets. Or is it? I could do better on Solo Oil. (more…)
Economics and investment
Royal Mail Group
This week Royal Mail Group started trading on the stock market and the share value increased to 496p from 330p, giving small investors a profit, at least on paper. It also added value to an asset for the government. (more…)
A lot of shares seem cheap now as we appear to be coming out of a recession. Taylor Wimpey shares have been rising steadily since 2008, but are still a fraction of what they were in 2007. They could return to the highs of over £4.00 a share as the economy recovers. I think there is a housing shortage and they are in a good position to do the building, if the government gets it’s act together.
My first investment blog post was nearly 2 years ago now. I wrote that after buying shares in Premier foods for 4p each. The company was heavily in debt, but the shares went to 18p before a 1 for 10 share swap. They are still at 129.59 at the time of writing. That’s a return of over 220% so far!
This week George Osborne told the world that the government wants to sell it’s shares in Royal Bank of Scotland, signalling intent to dump billion of pounds worth on the stock market. This was done to coincide with the bank announcing huge ‘paper’ losses. Not surprisingly the banks share price tanked on the stock market and so did Lloyd’s Banking Group. Well done George…
I bought shares on the stock market a few years ago because I thought there would be a take over bid on a company. There was and I thought I was going to make money, until a large investor blocked the bid. That investor lost a fortune and I didn’t do too well. You pay to learn and now I have got my money back and then some.
Buying in a bear market
When there are more sellers than buyers in the market, traders call it a bear market and when the buyers outnumber the sellers, they call it a bull market. This appears to be a bear market; but the government is buying back it’s bonds by ‘printing’ money. What will the financial institutions do with the new money they get from selling bonds? I think they are buying shares in the markets again but being very selective. I have bought shares in another company that is making a loss; the Royal Bank of Scotland Group.