It is nearly the end of April and the weather here has changed to cold and wet again. I’m thinking of changing my car and have one at a local dealership in mind. I’m not in a hurry but at the end of the month, salespeople like to add a little to their commission. I hope to get a salesperson so enthusiastic to make a sale, that they will reduce the price or do a good deal on the part exchange to get that end of the month bonus.
Many investors make an investment in a small company and hope they make it big. I have high hopes that Solo Oil will make it big with its shares in oil discoveries both in Tanzania and in the UK.
Basic economics tell us that supply and demand dictate prices. The current over-supply of oil has reduced the price to under $50 a barrel but is this rule always true and what drives demand? If everyone gets a pay rise, demand is increased but where does the money come from? All money comes from central banks, of course, and so it is the central banks that create demand by printing money.
After the stock market was trashed last Friday we had the aftershocks that saw banks and house builders losing up to 30% of their market capitalisation. Then, the dead cat bounced, the market recovered a little this week. So why did it crash so spectacularly on Friday and what can we learn from it? We have to understand the role of market makers in all this. We need to understand the Brexit aftershocks.
Pharma in focus
Pharma in focus was really the theme of the week with Immupharma soaring as trials of its Lupuzor drug appear to be successful. The inventor of the drug is also due to give a lecture on the developments which is expected to be positive news. In early trading today, many investors were selling and taking profits and so quite a big drop this morning. (more…)