Weekly Ramblings of an Australian Stock Trader – incorporating ASXweekendtrader.com

There’s no mistaking it. Uranium is a touchy subject, and it’s been exposed to some wild swings.

After rising aggressively in 2010, the uranium spot price dropped after the Fukushima Daiichi nuclear disaster. It fell straight to $50, before bouncing and then re-testing this level again five months later in August.

In the six months since then, we have seen the uranium price hold above $50. In fact, after the year from hell for investors, it looks to me as though uranium stocks are now showing signs of recovery.

 

 
Source: Cameco
 

The thing is, it wasn’t just uranium that fell after Fukushima. [Read more →]

It’s a way to invest in shares without having to do all the hard work of researching individual companies.

We don’t recommend it for everyone. But if you want stock market exposure without taking big risks, here’s a simple way to go about it…

Have you ever heard of Exchange Traded Funds (ETFs) ? They are hugely popular in the U.S. and U.K.

An ETF is a basket of stocks that trades as a single share. In the old days (10 years ago) a fund manager would buy a whole bunch of popular shares, parcel them into a fund and then list the fund on the stock market. And that was it. [Read more →]

February 22nd 2012 – Australasian Investment Review – (AIR)

A fitful reaction from the markets to the news that the second bailout of Greece is much closer after eurozone finance ministers agreed to the latest bailout package.

Most Asian markets rose, all major European markets fell and US markets were cautious. Gold and oil rose, the euro rose, then dipped.

In fact the reaction was muted. The Dow hit 13,000 for the first time since May 2008, then retreated to end the day slightly down.

And the Australian dollar, a good global barometer for ‘risk on’ investing and confidence, sold off slightly overnight as investors worried about the deal working.

While the bailout grabbed the headlines, the chances of Greece being bailed out in the true sense of the phrase are receding because the 130 billion euro package won’t be enough to give the stricken country long term stability.

The package will aim to reduce Greece’s debts from around 160% of GDP now to 121% by 2020. That, according to a secret report obtained by the Financial Times, is pie in the sky stuff. [Read more →]

February 22nd 2012 – Australasian Investment Review – (AIR)

Just a suggestion that OneSteel, in seeking a new name, might be about to ditch its low profit steel making business, was enough to send the shares up more than 12% by the close yesterday.The shares hit a high in trading yesterday of 85c, a rise of nearly 14% on the news of the planned name change which dominated reports and investor commentaries about the group’s interim results and outlook.

They ignored the 3c unfranked interim dividend (down from 6c for the same period of 2010-11) which told us that despite the weak profit and problems in the local steel industry, the high value of the Australian dollar, and a fall in global iron ore export prices, management remains essentially confident about the outlook. [Read more →]

February 22nd 2012 – Australasian Investment Review – (AIR)

February 21st 2012 – Australasian Investment Review – (AIR)

February 21st 2012 – Australasian Investment Review – (AIR)

February 21st 2012 – Australasian Investment Review – (AIR)

Australia’s largest steelmaker, Bluescope Steel, reckons it is laying the foundations for a return to profits after revealing a total loss of more than half a billion dollars for the six months to December 31.

The loss of $530 million was driven mostly by the impact of last year’s restructuring and plant closures and sackings at Port Kembla and Westernport in Victoria.

The company had a loss of $55 million for the first half of the 2010-11 financial year.

The loss included significant one-off restructuring costs of $260 million, impairment of deferred tax assets ($184 million) and income advanced under the federal government’s Steel Transformation Plan ($46 million), the company said. [Read more →]

It took awhile, but are the wheels finally coming off in Europe? Last year, I figured either a Greek default or an Italian default on government debt was a certainty. It didn’t happen. But it may happen this year. And it may happen soon. What should you do before it does?

To be honest, all the news from Greece and Europe is discouraging. If the Greeks don’t get a second bailout of €130 billion by March 20th, they’ll probably default on the €14 billion worth of bonds that mature on that date. That would trigger a default and probably bankruptcy. Those are just the financial consequences. The social and political consequences are more troubling.

To avoid defaulting, Greek politicians are being forced to accept years and years of austerity measures imposed by the European Union (EU) and the International Monetary Fund (IMF).

Now don’t get me wrong. Some structural changes to the Greek welfare state are long overdue. The trouble is, even under the IMF’s projections, austerity measures will reduce Greece’s debt-to-GDP ratio to 120%…by 2020.

That’s absurd. And in the meantime, Greece will have to accept a long list of politically unacceptable limitations on government spending. It’s hard to imagine the Greek people putting up with this for much longer, especially when the alternative to permanent austerity (and subservience to Berlin) is a simple default. [Read more →]

I think we’re now approaching the final act of the four-year-old Global Financial Crisis.

How it will play out is anyone’s guess. But one thing’s for sure: there’s still a lot of uncertainty in this market.

And not only in shares.

The Aussie dollar is trading near all-time highs against the US dollar and the euro.

The banks are overweight on mortgage debt.

Have you stopped to ask how safe your cash is?

If you perceive a risk in the stock market, do you really think it’s any safer to put your cash in term deposits or cash management accounts in Australian banks? [Read more →]