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The English weather, like average stock charts, reverted to normal behaviour during a rain spoiled August. We still hope in vain for some better news concerning Betonsports or Langbar. However the latest on the former is that the company has been refused leave to start up its US arm and for the latter it appears the legal entanglements and the uncovering of financial shenanigans might take quite a time to sort out.
In the wider world, oil prices moderate to below $70; at least until the next hiatus threatens supplies. Gold also steadies lower indicating less worry out there. Interest rates on the other hand are behaving nervously. The US appears to have decided to mark time for a period although the next move might still be up if inflation does not moderate. Euroland seems likely to have some more rises in the pipeline in spite of keeping them on hold at the last meeting. At home the monetary policy committee are tipped to keep rates steady until Xmas perhaps when another rise may be necessary. Hopefully it will be the last of this cycle. The property market and debt seem to be giving the consumer cause for thought. The weakness in parts of the retail system and consumers heavy indebtedness may lead to curbing of credit. In spite of all these worries a soft landing for western economies is possible and this is throwing a lifeline to equity markets. All major markets have been trading sideways over the summer with modest strengthening. Over the last month they have all risen and last week similarly they rose about 1%. A benign outlook is therefore suggested but some pundits think there may be some volatility in the next couple of months as the future outlook begins to unfold. A situation, perhaps, where equities continue to climb a wall of worry. Don’t they always?
British consumers particularly are suffering high energy prices. Even though petrol prices have fallen slightly the energy suppliers are still applying swingeing increases in gas and electricity prices. Not a happy prospect as winter approaches.
Commodities have been affected by worries of more Chilean strikes. BHP Billiton seem to have settled their immediate problems but more interruptions to supply may occur as other companies try to negotiate their own deals with organised labour. Mining companies are generally well off their highs probably on talk of global retreat.
Mobius club has not had a meeting for nearly two months, so there will be plenty to discuss at this next meeting. We are now predominantly in cash. Our share holdings consist of two lame ducks, Langbar and Betonsports and the rapidly expanding mechanical portfolio. The latter are not doing particularly well but they will be given time to prove themselves. Robert Walters is looking the star buy so far and news I have read is very positive on prospects. L of L may be suffering some retail jitters. Delta is a share with little volatility and no movement of any great moment has taken place since purchase..
The club recently took a large profit from the sale of its Hamworthy stake. Hopefully we shall be able to repeat the profitable operation again in future if the market as a whole or Hamworthy itself falls in price.
Looking at my own portfolio I am pleased to report that Ashtead is making steady progress after its rights issue was almost fully subscribed (96%). Obviously it would have pleased the company and shareholders like myself if the offer had been oversubscribed but they have the cash and anyone taking up the rights is now showing a 30% gain in a matter of days. Subsea has pleased me with the news of the first copper to be raised from Celia. The sample landed has proved to be of superb quality and net salvage value of the cargo is estimated to be £15.8m. The company intends to sell onto the open market when 500 tonnes has been recovered. The target is to recover the cargo by the end of September. The company will keep 90% of the sales while the insurers Lloyds of London will get the remainder. I believe Mobius club still has the opportunity to make money from an investment in this company.
Two club members have visited CMC Markets in the City of London to take advantage of the charting course offered as a prize to Mobius Club at this years Proshare awards. They enjoyed the experience very much. The remaining club members, who wish to take the chance, will be going to a future seminar.
Acknowledgements to Daily Telegraph and FT.