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In spite of the new financial year taking over, accompanied by dire predictions, the first month has seen buoyant stockmarkets especially the US and Europe. In fact the US particularly is breaking new ground with the Dow well over 13000 and it only took 192 days from the time it broke through 12000. Not bad going. At the moment it seems caution is being thrown to the winds as big companies on each side of the Atlantic are announcing good news on earnings. Only problem with that is for European companies, like Ashtead, earning dollars but paying dividends in their home currency which is more than likely to be rising against the US dollar.

Of course, the bad news has not gone away, it is only taking a back seat for awhile. Inflation forecasts are bleak and more interest rate rises are pencilled in. If a central bank is panicked into stepping up the rate rises at a faster rate than expected then the S*** may hit the fan. As usual we will see as things unfold. It is May now and the guys with their big bonuses will presumably be on their way to the airport soon to jet off to the sun and start spending their well-earned brass?? Not to mention thousands of smaller investors who will be thankful for some good capital appreciation over the last months. Additionally we have had a continuation of the Mergers and Acquisition trend which has seen a number of large and medium sized companies get the offer of a lifetime, sending even more cash to investors. All in all the scenario looks benign just now but we know how quickly things can turn ugly.

Commodities are still very high and mining companies remain volatile. Much excitement particularly surrounds uranium mines which are thought to be very much in the sights of companies and countries who are ramping up plans to build more nuclear stations. British Energy is thought to be one of the winners going forward and fortunately Mobius bought a tranche of shares in a semi-systematic beauty contest recently. Our club members are very pleased with Mourad’s regular work, picking shares which in the main are doing very well for the club. It is early days yet but at this rate and barring a catastrophic fall on the markets we are starting to see the kind of returns we all think we deserve. I do expect the next unit value to hit a new high when it is calculated and announced. Great for the club and many thanks to Mourad for steering us in the right direction

From being heavily in cash last autumn the club now hold a greater number of different stocks than ever and we are getting closer to being fully invested. One share recently purchased in the toolkit portfolio is Tanfield. We have been late at the party but the flow of good news is still more or less continuous and so at the moment we appear to be about 25% in profit although the spread is wide. At the end of last week (27April) the new highs in London totalled 124 and included Standard Chartered, my favourite bank, Bodycote and Airpartner. Since the latter passed £10 it has been rising almost every day. So much so, one might think it was being taken over. Bodycote on the other hand rebuffed Sulzer this week even after the bidder increased it’s bid and now the SP is sliding back. To below 300p as I write. Perhaps it could be a target for us again at some time in the future.

Many other shares in which I or the club have had interest in the past such as: Arm, Surfcontrol, Capita and Lavendon have also hit new highs and continue to do so this week. as Surf gets a bid too. Too good to be true? Well, yes. I think these toppy conditions cannot go on for ever but while it does it pays to remain invested.. New lows totalled 43 but included a lot of treasuries (but not index-linked which figured in the new high section) so watch this space. It is not a very good sign.

Another share came back from the dead over the last seven days. Tribal had been plumbing the depths but following a trading update it took off again(up 33% in week) and started to look a reasonable investment again. Persimmon and Dim Data came a cropper last week but Percy for one has bounced this week. and certainly seems to exhibit the sort of strong characteristics that we hoped for amongst housebuilders when we bought in.

I am now packing my bags for the holidays and am praying that a stockmarket crash does not occur while I am away and unable to sell off. Good luck all.

ML - Acknowledgements to Daily Telegraph and FT.