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

Over the last six months, energy stocks have been some of the best performers in the stock market.

With good reason – global energy demand is set to keep soaring.

As I mentioned in yesterday’s Money Morning, the International energy Agency (IEA) estimates global energy demand will increase by ONE THIRD in the next 25 years.

So to get the ‘good oil’ on the oil and gas sector, I’m in Adelaide to join 3000 other delegates for the Australian Petroleum Production and Exploration Association (APPEA) annual conference.

It’s a pretty heavyweight conference…

We heard from the International Energy Agency (IEA).

Federal and State politicians have weighed in. [Read more →]

Investors need to accept the fact that ‘the game as we have all known it appears to be over’, says US investor Bill Gross. The co-founder of the world’s biggest bond fund, PIMCO, reckons that investors need to change their strategies in the wake of the financial crisis.

To understand how different things are now we have to look at the history of leveraging, before the financial crisis, says Gross. Since the early stages of the 20th century ‘the trend towards financial leverage has been ever upward’. Politicians set the rules, by relaxing regulation and freeing paper currency from real world constraints like gold.

Meanwhile ‘the private sector was more than willing to play the game, inventing new forms of credit, loosely known as derivatives’. The ever-expanding credit had a profound effect on investing attitudes, says Gross.  ‘“Stocks for the long run” was the almost universally accepted mantra, but… for most of the last half century [it was] “financial assets for the long run” – and your house was included by the way in that category of financial assets even though it was just a pile of sticks and stones.’ [Read more →]

Without supplies – whether it’s energy or food – a nation and its economy will quickly collapse.

We’ve see it proven time and again through history.
Whether it’s World Wars I and II, the Punic Wars, the Napoleonic Wars, Middle East wars, or the U.S. Revolutionary and Civil Wars, if you control the supply lines, you control the war and its outcome.

The Europeans know this more than anyone else.

Throughout history, barely a decade passes without one European state declaring war on another…or a civil war or revolution tearing a nation apart.

So, it’s essential to secure supply lines. [Read more →]

The oil and gas world meets in Australia this week.

Today and for the next two days I’m at the 50^th annual get-together for APPEA – that’s the ‘Australian Petroleum Producer and Explorer Association’.

I packed my bags and kissed the family goodbye last night to fly up here for this year’s conference. It’s a busy day ahead and I’ll tell you more about it tomorrow.

But this morning I just wanted to give you a heads up on the key issues driving the global energy market…what they mean for Australia…and most importantly what they mean for you…

With over 3000 delegates meeting at Adelaide’s Convention Centre it’s by far Australia’s biggest oil and gas conference.

No wonder it was so hard to find a hotel room! [Read more →]

The rate cuts in November and then December were supposed to save Australian house prices.

Yet less than six months later, recent economic data suggest things are getting worse.

According to RP Data, capital city house prices lost a combined 4.5% last year.
But ever the optimist, RP Data called this decline in April a ‘renewed softness’.

Even Tim Lawless, RP Data’s research director, admitted interest rate cuts won’t help the housing market. He said:

‘Our estimate of transaction volumes to February suggest that the two interest rate cuts in November and December last year are yet to provide a sustained stimulus to the market, with transaction volumes remaining reasonably steady around 31,000 each month. Comparing this with the sales rate through mid 2009 when around 45,000 homes were selling each month, the slowdown in buyer activity becomes quite clear.’

[Read more →]

A good example of long term astute trading is Warren Buffet who is now around 80 years young. He is currently worth an estimated cool $52 billion give or take a million or two.

And he has achieved that by essentially looking for quality, well-managed companies that are undervalued by the market. And he is prepared to wait for the right moment.

Probably one of his most ignored mantras is: “Don’t get rich quick.”Hence the name of this article.

What lessons can we learn from this Master Trader? [Read more →]

What I call the New Space Race is about to “take off” in a big way.

And front and centre is asteroid mining.

Yes, I mean literally digging into asteroids to extract ores and other materials

Not long ago, this was the stuff of sci-fi. (It smacks of the 1998 movie Armageddon, in which a team of roughnecks lands on an asteroid on a collision course with Earth in order to blow it out of the sky.)

Today, it’s a reality, thanks to advances in three fields – low-cost computing, cheaper rockets, and advanced robotics. [Read more →]

I bet you are wondering what criteria I use to pick my potential money making shares? Ok I will list them for you very briefly.

1. Adhere to your written down plan for buying and selling shares. I.e. The amount you are going to spend.

Have a stop loss in place (This is the amount you can afford to lose if things go the wrong way. 2% of the total value of your portfolio is a good guideline)

The % profit you want to make after allowing for brokerage etc.

The time frame you would like. (Not always possible) for the total transaction. Is it short, medium or long term? [Read more →]

Europe, Europe, Europe…

I know, you’re sick of hearing about Europe’s problems.

But the problem with Europe is that it won’t go away. And if it does go away, we’ll have even bigger problems. What a mess.
Of course, I’m talking about the Euro-currency zone and the European Union, not Europe itself.

I love Europe. I love every country in Europe. I love the different cultures. I love the different languages. I love the different societal models. I love the history of Europe.

And no doubt all the Europeans love all the same things about their Europe – except maybe some of their history. But even more than loving Europe, Europeans love their own countries. Why? Because they have different cultures, languages, societal models, and differing views of their history. Vive la différence!

So, whose bright idea was it to gloss over (with shiny promises and, later, a shiny new currency) thousands of years of differences and shove all Europeans into a funnel in the hopes that they’d all come out the other end as one homogeneous mass of humanity?

Oh, that would be the bankers and financiers who wanted a United States of Europe so that the free flow of goods and services payable with a common currency would make everyone better off, and make themselves better, better off, by a lot of betters.

And now, what a surprise! [Read more →]

‘Actioni contrariam semper et æqualem esse reactionem: sive corporum duorum actiones in se mutuo semper esse æquales et in partes contrarias dirigi.’ – Law Three, Principia Mathematica Philosophiae Naturalis, Sir Isaac Newton

Or to non-Latin speakers (including your editor)…

‘To every action there is always opposed an equal reaction: or the actions of two bodies upon each other are always equal, and in the parts directed to contrary.’

Apparently, this is a new idea to the guys and gals at the International Monetary Fund (IMF). But thanks to ‘three decades’ of research, the boffins at the IMF have finally found out what Sir Isaac Newton knew 325 years ago.
That is, every action creates an opposite and equal reaction.

It’s Newton’s Third Law.

OK. Newton’s third law doesn’t directly relate to house prices. And strictly speaking, he’s not saying that what goes up must come down. [Read more →]