Speculator share rally on stimulus speculation
The Australian share market and dollar have staged spectacular turnarounds, with All ordinaries index rising phoenix-like from falls of more than 5 per cent to finish with a 1 per cent gain. Fund Manager, Roger Montgomery reveals his thoughts following the market turnaround. Read the article.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Ash Little
:
I had a look at TLS and CBA yesterday and I really can’t see why the analysts are so excite.
Sure TLS managed to stop the bleeding in the last 6 months but NPAT growth of 0.3% growth in the last 6 months is hardly worthy of the cartwheels that I am getting from the herd.
CBA headline profit growth looked very impressive but much more than 100% of this was due to reductions in provisions for doubtful debts……Given Australia is currently growing below trend and financial problems are more than emerging in Europe and the US then I am not getting this reduction………I am no expert on Bank provisioning but it is interesting to note that they were at their lowest in 2007.( Just at a time when history reveals they should have been at their highest)
Just a few thoughts
Dave T
:
Ash,
I think TLS is getting drummed up by the ‘income herd’ who are rubbing their hands looking at the dividend yield and singing the praises of the government – who is effectively paying for TLS’s dividend over the next two years. Amidst all the pessimism and lack of capital growth across the market the same herd probably view dividend investing as their way of ‘beating the index’.
Dave
Ash Little
:
Hey Dave
Thanks for that,
If my calc are correct( and they are often not) Then TLS have to use every penny of the govy payment to reduce debt so they can compete on the NBN………It will be very hard for them to compete in the retail enviroment otherwise.
TLS is going from a bully to leming.
Will they make the right decision?………..no of course not……..
A relative of mine thinks it is going to $4………..I don’t short often but if it does it is a no brainer
Dave T
:
Roger,
This article put great stocks CSL and WOW together with the likes of TLS, and then called them all defensive! I’m a little bit offended :-)