Most people understand the basics of economics. Recently there has been a worldwide glut of oil and so there was competition among producers that led to the oil price falling to below $50 a barrel which meant many producers were selling at a loss. Supply and demand largely dictate prices but in the case of oil, we also had to look at how much oil was stored. It will take a while before those stocks are deleted. When oil stocks are low then the oil price could soar to new heights again.
As a small investor, I’m always watching the market and this week my attention was turned towards the US markets. The Federal Reserve increased their base rate and this has global implications. The Bank of England decided to leave our rates unchanged, but for how long? There are already signs that the US dollar will appreciate against other currencies and my shares in GSK are finding favour again and seem a bargain compared to their October price. They have lost £2.00 a share in 2 months.
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.
This week we seem to be seeing a change direction for the government. Teresa May, was by any standards impressive when she made her speech to the party conference. She did, however, praise the record of the Cameron government and still seems a little out of touch. The pound crashed this week down to 1.2454 this morning. She hasn’t got a vote of confidence from the market.
The stock market rallied a bit yesterday after the Federal Reserve decided to delay interest rate rises to later in the year. Uncertainty still worries investors and it seems this morning some dealers are taking profits and so the main market is down. I would be down too, but diversity rules for me and so I’m up as some of my AIM shares come good.
It seems likely that Britain will stay in the European Union but the uncertainty is depressing the stock market. We could see a surge of confidence once the referendum is over with. The big loser if Britain does leave the EU would be the City of London because they make huge amounts of money from Europe.
Market risk changes constantly. Economic downturns, terrorist risk, perceived risks by rating agencies and political risk all weighs on sentiment. The sentiment that drives buying and selling in the market. (more…)
The all share index on the London stock market is down nearly 4% this week, which is a lot for small private investors. There are some bargains to be had but falling markets have had a devastating effect on the value of portfolios in recent months. We have to think long term and consider buying. (more…)
At one time all the traders in the City of London had East end accents. Now they are all Oxbridge educated and talk posh, they also panic when sentiment goes against the market. They don’t appreciate that they are the sentiment. So the Shanghai composite took a dive on Monday and we saw posh boy panic in London. (more…)
I won’t pretend to be an expert on the world economy, but there does appear to be bubbles and cycles. Cycles when the Chinese Yuan is strong and then a cycle when the Yuan is weak. Do these cycles just happen or are they engineered by governments? The answer this week, was the value of the Yuan being cut by the Chinese government. Bubbles too can be engineered by governments, especially property bubbles, like we see in London now. (more…)
It was another boring week watching the stock market. The FTSE 100 is still down at 6744.47, much lower than it’s high of 7122.74. I think it’s unlikely to recover until we have some good news from Europe and Greece in particular. Austerity seems to be stifling international trade. (more…)
The good news this week was that RSA Insurance may be taken over by Zurich. That sent the price up to 518, but it has dropped back to 516. (more…)
Crisis bargain hunting
It looks like the Greece crisis is over, at least for now, but prices haven’t fully recovered. The FTSE 100 index is still way down off it’s high of earlier this year. At the time of writing, it’s on 6,791.51. Will it go back up past 7000? (more…)
Politics have been depressing the stock markets this week, with the Greek debt crisis lingering on. It seems the credit crunch that followed the Lehman’s Brothers collapse just goes on and on. The problems seem systemic, markets can’t decide and adjust economies. (more…)
A featured Post by Mike Maynard
There are lots of stories on the internet about buying penny shares in innovative companies that end up worth pounds and give early investors a fortune. I don’t think many people get the opportunity to invest early on in the life of a company, but there are some penny shares in the AIM market that might soar to great heights one day.
The FTSE 100 reached a new high again this week and is slowly moving towards 7000. With many shares doing well, is it a time to sell? Most investors look to buy low and sell high and some prices seem high now. (more…)
This week TSB issued a statement: “TSB confirms that it has received a preliminary proposal from Sabadell which may or may not result in a formal offer for the entire share capital of the Company.” Banco de Sabadell SA has offered 340p in cash per share for TSB sending the share price up to 325p (more…)
The FTSE 100 climbed to new highs this week and although this gave investors confidence, red lights flashed on my dashboard. With interest rates still rock bottom and even negative interest rates being considered, institutional investors are looking for safe havens on the stock market. (more…)
The excitement over the discovery of oil and gas soon died down when they realised there wasn’t quite as much as they thought. It sent Solo Oil’s price up over a penny and for a while we danced in the streets and celebrated. (more…)
If you have been following my finance posts you will know I started investing on the stock exchange a few years ago. I see it as an education, I’m still learning. Yesterday, was an interesting day just before the market closed there was news of an oil strike that sent shares in Solo Oil soaring. (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…)
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…)
I usually do an investment post when I make a new investment on the stock market. On my watch-list for some time has been the troubled insurance group, Royal Sun Alliance. I had a discount on dealing fees on Wednesday, so I decided to buy. (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.