Thu 28 August 2008

Oil for One and Oil for All

Oil shares are looking perky again. If oil prices rise, it’s not so good for many other kinds of company. Their costs shoot up which diminishes their profits.

But if the price of oil goes up, the big producers make more money. So is this time to invest even more in the ebony nectar? Well, I think it might be. For these reasons.

Full story | Posted by ShareCrazy on Thu Aug 28, 07:43 AM in Thought For The Day

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This Morning in London

This morning in London the performance of major shares was mixed. Firmer crude prices buoyed energy stocks, and Petrofac’s better-than-expected first-half results announcement offered support in the sector. Shares in mining companies were also lifted on the back of better copper prices. However, Britain’s main opened relatively flat as gains were offset by a slump in the house building sector, led down by Taylor Wimpey’s sharp fall in first-half profits. Later today, we are likely to see investors turn their attention towards U.S durable goods data.

Posted by George Marklow on Wed Aug 27, 10:26 AM in Market Update

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What the Brokers Say

• Citigroup has a hold for Bovis Homes, cutting target to 460p from 480p

• Cazenove downgrades Enterprise Inns to underperform from in line

• Oriel Securities upgrades Hardy Oil & Gas to hold from reduce

Full story | Posted by ShareCrazy on Wed Aug 27, 09:59 AM in Broker Recommendations

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What the Papers Say

The FT says ‘Northern Rock woes take toll on City’s reputation’, the Times comments ‘Rio basks in Chinese sun as regulators hover’, whilst the Telegraph reports ‘Sterling slide strengthens case for a rate cut and housing market statistics confirms it.’

Full story | Posted by ShareCrazy on Wed Aug 27, 09:07 AM in Paper Round

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Don'T Always Look on the Bright Side

Hello Crazies.

You may know by now that I have a tendency to look on the bright side. This is inbed optimism and I contend that most share shifters have it – otherwise they would not risk their money by trading stock.

You may also have noticed that through most of the present downturn, I’ve been saying it won’t last. And of course, it won’t. Every bear market is balanced by a bull market – and it’s just a matter of timing and cycles.

Or at least Crazyland has run on that pattern up till now. And as the world gets richer (generally speaking) then I’ve no reason to believe that, as the years roll by, the grand old game will continue to be profitable – if not every year – then possibly for most of ‘em.

And yet being too optimistic can have dire results, if we’re not careful. If we think shares will rise every time, rather than fall, we will be wrong – and could lose money.

Whatever our overview of the share situation, we should never forget that on many days, share values will decay. If we can grasp that very obvious fact, then we will sell stocks as easily as we buy them.

At the moment, the optimistic urge can make us bury our heads in the sand when times are poor. I believe this to be a mistake. Because if shares begin to fall, then they should be sold to avoid further damage. Yes, they may perk up after we sell them, but in my experience a falling share continues on that dodgy path, even if it does rise two steps before it falls back three.

Those shares which keep on rising, especially in bear markets, are well worth supporting – at least until they start falling. And falling shares should not automatically be expected to rise afterwards. Sometimes they just don’t. Rocking on.

Posted by Malcolm Stacey on Wed Aug 27, 07:47 AM in Thought For The Day

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Last Night in New York

Shares closed generally up, with energy shares leading the market’s limited gains and helping investors put aside the view that the Federal Reserve might raise interest rates to curb inflation. A summary of the Fed’s closed-door meeting on 5th August illustrated renewed concern among Fed officials about the mix of weak growth and elevated energy prices

The Dow Jones gained 26.62 to 11412.87, the Nasdaq slipped 3.62 to 2361.97, while the S&P closed up 4.67-points to finish at 1271.51

Posted by ShareCrazy on Wed Aug 27, 06:49 AM in Market Update

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What the Brokers Say

• UBS retains neutral for Rentokil, cuts target price to 76p from 90p

• Landsbanki upgrades Carillion to hold from reduce

• Altium has a hold for Axon Group raising target to 600p from 525p

Full story | Posted by ShareCrazy on Tue Aug 26, 10:54 AM in Broker Recommendations

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This Morning in London

This morning in London blue chip stocks slumped following a tumble in the U.S markets overnight as worries about credit losses resurfaced. Banks were hit hard once again and shares in RBS, Barclays and HBOS all fell. Commodities stocks were similarly bearish and shares in oil companies dipped as crude prices floated around the $115 a barrel mark. Weaker metals prices also weighed on mining stocks. Later today, the U.S. new home sales data for July and the consumer confidence figures for August, both released at 2pm London time, will serve as a health check on the American economy.

Posted by George Marklow on Tue Aug 26, 09:43 AM in Market Update

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What the Papers Say

The FT reports ‘UBS set to cut wage bill by up to $4-billion’, the Times says ‘Brown faces high-level revolt over windfall tax’, whilst the Telegraph reports ‘Co-Op to give 250 biggest food stores a taste of mini-banks.’

Full story | Posted by ShareCrazy on Tue Aug 26, 08:08 AM in Paper Round

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It'S Safer to Spread Your Jam Around

Dear Crazies,

In these difficult and uncertain days, it pays to take steps to limit your losses when things go pear shaped. You can, of course, set an automatic stop loss with stocks you buy through Sharecrazy. com.

But because of some technicalities of this procedure, such stop losses can’t always be guaranteed. However, it’s often a good idea to put automatic stop losses in place for the many times they do help.

Yet there is another way you can curb your losses without taking any action which involves constantly monitoring the progress of your stock. And it’s devilishly simple.

The trick is to buy into as many companies as you can, by investing small amounts, rather than huge wodges of cash. For example, if you hold shares in 100 companies after investing £200 in each firm , it will cost you £20,000 smackers.

Now if one of these companies crashes altogether, you will only lose 1%. If five companies go belly up – and you’d have to be exceedingly unlucky for this to happen, then you’d still only lose 5% of your total cash.

If one the other hand you split your £20,000 into only two companies and one firm goes bust, you’ll shed £10,000. Ouch!

Now I’m talking extremes here. You probably won’t buy as many as 100 companies, even if you had £20,000 to spend. And you almost certainly would not be rash enough to invest in only two firms.

But I’m trying to make a point. If you are a cautious soul, as I am and which I strongly advise in Crazyland, then spreading your money over a lot of companies, rather than a few is the safer bet.

But there is a snag -isn’t there always? If you spread the money thinly, the rewards when one of your companies strikes it really big, will be on the small side. But you can’t have it all ways. I prefer a lot of smaller gains to one big one – and the chance of a nasty loss. But you must make up your own mind. As we all rock on.

Posted by Malcolm Stacey on Tue Aug 26, 07:07 AM in Thought For The Day

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