A good week for all 2018 picks including the newspaper tipsters. It feels rather buoyant out there at present with the sun shining and Commodity stocks flying. But spare a thought (not for too long mind you) for Kairos hedge fund. They made roughly £150m shorting Carillion (approx) and then got smacked for six on Ocado to the tune of much the same… £150m+ (roughly). Win some and lose some? Looking at the timing of trades, it wasn’t a slow build decision. Someone somewhere at Karios decided that a hefty short on Ocado was a good idea. Now… as many know… ‘apparently’ the Carillion collapse was telegraphed to ‘some’ lucky bods months in advance tut tut. I doubt the FCA will have them by the necks but suffice to say, Carillion was a free short bet for some. I’m not suggesting that Karios had a heads up on Carillion’s precarious position but merely highlighting that shorting Carillon may not have been as inspired as it first appears. Looking at the woeful short position decision on Ocado, one would assume Karios’ luck ran out or they got some duff info… ouch. Shorting the big grocery/ supermarkets might have seemed like a good idea some months ago, but after Sainsbury/Asda pulled the rug under more spiv shorting hedge funds, you’d think some would have learned their lesson. When it comes to village idiots, Karios are not the only ones. Marshall Wace seem to be picking wrong bets more times than a punter on a fixed odds betting machine. Perhaps the EU should introduce a law to reduce Hedge Funds shorts to a minimum punt of £2 per stock? Now wouldn’t that be a great idea? Save them losing clients money and abusing the market on a daily basis? To be balanced, we all make good calls and bad. It’s never nice when you score at both ends. The Casino has a habit of getting your money off you even after its dished out some carrots. So just because you’ve made a few good calls of late and suddenly think you’re warren buffet, just remember, today’s market is at all time highs, the recent bullish run on equities is fundamentally down to low interest rates and QE. If you can’t make a few quid in this market, then you are definately in the wrong place.
After a few years of hanging off a cliff by its toenails, Premier Oil finally surges higher. The catcher development is a story about a field that plateaued at the right time. After PMO’s Solan development disaster, it will come with much cheer to investors who have been subjected to a helter skelter ride. PMO look out of the woods for now and based on past valuations, the market has still left some headroom to fill. 180p+ looks a fair level to ‘plateau’ through 2018 summer period. 2017 ShareHub pick ‘Tullow’ has also bounced back. The bots and Algo’s are really struggling to balance the upward movement of these stocks while trying to contain the major Indices. It’s all linked in some form or another. Considering the FTSE100 is notoriously ‘commodity’ heavy, it’s surprising the 8000 level has not been broken already. Looking at the next reshuffle the FTSE100 and FTSE250 could see many of the blackgold (and Gas) producers coming back into the mix. It wouldn’t hurt to pay attention to the admission / valuation criteria on some stocks like Premier Oil, historically, funds are forced to buy in upon entry and this often brings with it higher volumes, a different type of investor and solid spikes. Not always… but often.
Elsewhere… Gold has wobbled of late and looks odds on to bounce higher once the Hedge funds have had their fill. Risk factors are still very high across the Mena region but in other global parts issues over North Korea have reduced and it’s all gone eerily quiet over Russia. With the World Cup kicking off in Moscow in just under 4 weeks time, it’s going to be a precarious time for all involved. Hence it comes as no surprise to see tensions reduced ahead of this global televised bonanza. The media, sponsors and advertising channels have all invested billions into this event so important not to shoot themselves in the foot! First game up is OPEC vs NON-OPEC.
Congrats to Megan and Harry. Due to the unseasonable UK weather, Harry was not the only red top gleaming on the day. A few scorched followers will have been reaching for the calamine lotion on Sunday. Blighty was sparkling in every way as media channels beamed across the globe. Bodes well for Carney and co so I wouldn’t rule out an August Rate rise just yet.
Week 20 Review:
Stunning performance from the DailyMail picks which has turned a 10% decline some weeks ago into a 7.3% profit. The Algo’s are dragging every cat and dog up in the FTSE off the back of the commodity recovery. In theory that should begin to rebalance as blue chips get sold off and commodity stocks replace them. That said, never a bright idea to have all eggs in one basket so some diversification never goes amiss. A good recovery from AMER helped the ShareHub picks rise to 13% and that’s with weak performances from HUM, PFC, SQZ and WRES thrown in. When (or IF) these stocks finally buck the trend and surge higher, the ShareHub picks should be out of sight. For the moment, hats off to the DailyMail for putting in a fight. The Guardian picks are perhaps an example of how the blue chips (in general) are being parked while money finds its way into more ‘popular’ stocks.
Week 20 positions below: