Equities - quick update

(image from LOLFED)


A decidedly mixed bag of trades over the last week or so. The crucial call is whether we are seeing the death throes of a fake bull market, or a determined effort to bottom out the market ahead of some sort of recovery, with determined government intervention designed to boost confidence and avoid financial armageddon. Flash favours the latter view, but the evidence is mixed and he needs to guard against too much optimism.

A wave of Obama-inspired euphoria flushed over the market at the end of last week, bouying up equities, but it's not been enough to offset the bleak, bleak outlook for mega US stocks like GM and AIG. And Fannie Mae unveiled another crock of shite today, enough to sour the mood and force traders into swift profit taking. Unfortunately Flash was out so he missed the chance to join that party, sacrificing a chunk of cash to the twin gods of misplaced optimism and smug complacency.

Flash bought into a bit of clean energy bounce on the back of Obama, buying into the Powershares Wilderhill Clean Energy ETF towards the end of last week- that trade climbed into profit but it's now back underwater. Flash has a stop and knows how much he'll lose if it plummets. Flash also bought some Johnson Controls shares, which were looking pretty cool, but as they're a major supplier to GM the contagion from GM has spread to them today and he got chucked out of that trade for a hundred quid loss. What is looking more positive are some of the large cap stocks that Flash bought into - British Airways is up nearly 40% from where he bought them at 115; Kingfisher is holding up from where he went in at 103; Firstgroup has been fantastic - up to the upper 400s from a purchase point of 412; BHP Billiton up around 25% from where he bought them at 828; M and S in the mid '60s from an entry point of 220; Game Group is working well.

Another blog to come about the screen economy - video games, cinema, and which stocks Flash favours in this sector. He's taking a close look at Pinewood Shepperton at the moment - the stronger dollar means that it'll be at least 20% cheaper than 2007 for Hollywood to come and shoot in the UK over the next 12 months, and there's always a James Bond-influenced bounce to consider.

Flash has long index positions firmly entrenched from - 3699 (FTSE); 8356 (Dow); 870 (S&P). He's added bits and pieces to them on the journey up and down, but not been as nimble as he should have been in getting the cash out of these calls.

So he's reasonably happy, but it's not getting any easier. Perhaps it would just be better to go back short?