Week 49 of 2012
Modest gains for the leading indices which off the back of greater gains through early Dec is not bad at all. While Fiscal cliff talks continue and QE extends its way into 2013, some investors are beginning to show the bruises of the last 2 years. For commodity plays, it has been a poor 24 months. Some stocks are in finer form than they were back in the dark days of 2009 yet are mysteriously trading below even those levels.
CAZA Oil & Gas is a good example of a stock that fell victim to the markets casino style trading games. After being fairly rock solid at 20p levels, the stock drifted as low as 6p on nothing significant – no negative news, just market trading. In the last few weeks – reality has returned and the stock is back trading at 20p. In short, the small caps in particular have been much harder to ‘hold’ against the wild swings in volatility. It tests an investors patience to the limit especially when good news greeted will a muted response yet any negative news is met with such bearish conviction. The half full or half empty balance is firmly to the negative in this current climate. The market appears happier to be shown to be proven wrong than price in any optimism.
News from the UK budget plans on AIM stocks being ISA’able might be of some help in terms of attraction – and perhaps the very fact that this ‘rule’ is about to change for the better suggests more about the dwindling interest in these volatile loosely regulated indexes.
The market has a habit of doing the opposite to what investors think is coming. So perhaps 2013 will see the pi sidelined on AIM stocks just as the II’s enter?
The Dow closed up 130pts higher than last week at 13155. The FTSE 100 closed up 47pts at 5914.
A virtual portfolio has been set up using the 2011 final trading day close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. 2 newspaper top tens for 2012 have been included to help monitor/compare against.
Week 49 stock picks summary:
Premier/Antrim failed on Cyclone drill leaving Antrim looking rather ‘cheap’ against its fair value. The company has solid production, cash flow and booked reserves. With no debt to boot, at £60mln market cap, it looks like another market error. Perhaps like the CAZA story, it will recover quickly once the games been completed.
The Independent stock picks added to its fine 2012 performance and being crowned champion for the second year running is just 3 weeks away. Tempus Times continues to slug it out with thesharehub’s B-list picks – The latter assumes second spot and will be keen to push into double figures? The AIM listed dominant Hotlist is flagging along with the main AIM index. As Christmas nears it will take some miracle to see it end in the blue.
Current standings / Week 49 Results
1. The Independent 2012 +46.51% (weekly gain of 2.35%)
2. Thesharehub’s ‘B’ List 2012 +9.87% (weekly gain of 0.63%)
3. Tempus Times 2012 +9.40% (weekly gain of 0.07%)
4. Thesharehub’s 2012 Hotlist -9.61% (weekly loss of 2.66%)