News came through yesterday that Abu Dhabi’s Etihad Airways has more than doubled its stake in Virgin Australia, to a maximum 19.9 percent.
The stronger alliance between the pair is likely to help them compete against Emirates and Qantas, which launched its alliance in March and is viewed as a strong strategic partnership.
Etihad, which originally owned 9 percent, has been buying up Virgin shares on the Australian Stock Exchange in recent weeks and now holds more than 515m.
Nobody known's whether any of those shares were held by Virgin Group CEO Richard Branson, who has previously hinted he would potentially sell his remaining 13 percent stake. This came after he sold 10 percent to Singapore Airlines. This took Singapore's holding to and overall maximum of 19.9 percent.
Air New Zealand also now owns 19.99 percent of the Australian airline, meaning Etihad’s influence in the company had been significantly diluted since it first invested in it in June 2011.
At 19.9 per cent, the airline has reached the threshold approved by Australia’s Foreign Investment Review Board in June 2013.
So this begs the question, is Virgin now a good share to buy? I have followed this stock for the last 4 years and there have been several point where I believed it was going to take off.....pardon the pun. However, it has never reached the height's many investors hoped for.
Airlines are notoriously volatile and if you are searching more a more secure Australia share tips then the banks might be for you. Given the significant holdings on Air NZ, Etihad and Singapore which should dry up a large glut of shares there could now be value in VAH, but if you invest watch it link a hawk.
Thursday 10 October 2013
Back To The Blog - Speculative Shares
Have been away from the blog for a while now and it is all the fault of the footy finals. Evey August and September my attention turns from calculated gambling on the share market to gambling on the footy.....calculated of course.
So with that theme in mind I thought it pertinent to talk about small caps and speculative stocks. The average investors like you and me simply cannot resist the prospect of massive gains in a small time frame.We ignore the plentiful advice to avoid using anything other than excess disposable cash to gamble on this kind of investment, and that's what it is gambling.
Since Australia’s resources boom began it has been a major source for penny stock hunters. The companies in this sector are typically very small and are engaged solely in exploring for minerals. A single find or even something as little as a positive geological report can send the share price soaring in the expectation it could be the next big winner.
A great example came a few years ago in 2007 when Minemakers – a Perth based phosphate exploration mining company that was around twenty cents a share, hit pay dirt. What happened to drive the price to around $2.50 by the close of the first quarter of 2008 may be a matter of historical interest, what matters to investors is the 1400% increase.
These success stories are few and far between and there are better strategies than to score big with penny stocks. There is definitely a place for these shares in your portfolio but if you want to avoid getting burned you need to do your homework, perhaps even more so than with the shares of larger companies.
Before you buy make sure you look at all the factors you normally would with a big boy and even more so try and find out the reputation of those leading the business. These stocks could make big money, but only use cash you can afford to loose and have them as part of a balanced portfolio.
So with that theme in mind I thought it pertinent to talk about small caps and speculative stocks. The average investors like you and me simply cannot resist the prospect of massive gains in a small time frame.We ignore the plentiful advice to avoid using anything other than excess disposable cash to gamble on this kind of investment, and that's what it is gambling.
Since Australia’s resources boom began it has been a major source for penny stock hunters. The companies in this sector are typically very small and are engaged solely in exploring for minerals. A single find or even something as little as a positive geological report can send the share price soaring in the expectation it could be the next big winner.
A great example came a few years ago in 2007 when Minemakers – a Perth based phosphate exploration mining company that was around twenty cents a share, hit pay dirt. What happened to drive the price to around $2.50 by the close of the first quarter of 2008 may be a matter of historical interest, what matters to investors is the 1400% increase.
These success stories are few and far between and there are better strategies than to score big with penny stocks. There is definitely a place for these shares in your portfolio but if you want to avoid getting burned you need to do your homework, perhaps even more so than with the shares of larger companies.
Before you buy make sure you look at all the factors you normally would with a big boy and even more so try and find out the reputation of those leading the business. These stocks could make big money, but only use cash you can afford to loose and have them as part of a balanced portfolio.
Monday 12 August 2013
It's Reporting Season!!!
I have been of the radar for a little while now, there was a period just before I wrote my last blog piece when there was real uncertainty in my mind about trading on the Australian stock exchange.
Towards the end of May and June was a period in time where I took the old mans advice of 'if in doubt stay out'. It has only been during July and August that the market has started to look a lot friendlier.
And now we move into a time that is great if like me you like the banks - its reporting season time!
So to help you all out during reporting season here is a link to the CBA commsec website that give a video break down and full reporting.
http://www.investing.commsec.com.au/reportingseason
Happy Trades
Towards the end of May and June was a period in time where I took the old mans advice of 'if in doubt stay out'. It has only been during July and August that the market has started to look a lot friendlier.
And now we move into a time that is great if like me you like the banks - its reporting season time!
So to help you all out during reporting season here is a link to the CBA commsec website that give a video break down and full reporting.
http://www.investing.commsec.com.au/reportingseason
Happy Trades
Sunday 7 July 2013
Aussie Share Market To Perform Well In 2nd Half 2013
Word is currently coming out that a number of experts feel the Australian share market will start to outpace its international compatriots.
During the first half of the year the Aussie was over shadowed by global markets, and while investors will still need to be aware of the faltering mining sector, good thinks should happen.
The main rule as always is too ensure you have an amply diversified portfolio for the months ahead.
With both lower share prices and lower interest rates for borrowers, market turnover and demand is tipped to increase. Main positive for the market appear to be;
1. Share valuations at more reasonable levels
2. The fall in the Aussie dollar, which is good for local company earnings and healthier for overall Australian economy;
3. The Reserve Bank's fire power to lower interest rates even further if needed; and a change in government, which will be good for business confidence and ultimately investment.
Lets hope for a stronger second half of 2013 building on the momentum of the first months of the year that has been stifled in recent months.
During the first half of the year the Aussie was over shadowed by global markets, and while investors will still need to be aware of the faltering mining sector, good thinks should happen.
The main rule as always is too ensure you have an amply diversified portfolio for the months ahead.
With both lower share prices and lower interest rates for borrowers, market turnover and demand is tipped to increase. Main positive for the market appear to be;
1. Share valuations at more reasonable levels
2. The fall in the Aussie dollar, which is good for local company earnings and healthier for overall Australian economy;
3. The Reserve Bank's fire power to lower interest rates even further if needed; and a change in government, which will be good for business confidence and ultimately investment.
Lets hope for a stronger second half of 2013 building on the momentum of the first months of the year that has been stifled in recent months.
Wednesday 26 June 2013
CFD Short Term Targets
Though it would be worth sharing what I think are a couple of short term targets for trading contracts for difference. Now there are many who will say that these are obvious targets, but that is exactly the point. Make sure you do your own research before trading but these are two stock that have served me well recently.
With the currently political instability, problems in the US and China slowing the Australian mining sector continues to take a hit. It is for that reason that BHP and Fortescue are interesting prospects to go short on.
BHP
Have a read of the article below which ran on the Forbes website yesterday 27/06/2013 leading off with 'Base materials have been a heavy load to bear over the past two years since the China recovery has never really taken hold. This is seen in the shares of natural resources companies, such as BHP Billiton'.
Now the Forbes article is referring to the US share price, but it is reflective on the ASX at the moment. Keep your eye on the trend here and monitor demand but definitely a stock to go short.
http://www.forbes.com/sites/zacks/2013/06/26/shares-of-bhp-billiton-hit-four-year-low/
Fortescue FMG
FMG has been in a downward trend since February now and is not showing signs of breaking out of this. Last week the Western Australian reported that 'shares in Fortescue Metals Group have tumbled after the iron ore miner cut its production guidance by two million tonnes for the financial year, citing the impact of "unseasonable wet weather" on its operations'.
Further to this FMG have themselves said that 'Fortescue is now in a phase of significant cost reduction and continues to focus on operational efficiencies which will see it moving down the global cost curve'.
All in all this looks very much like it has further to fall but monitor demand and set tight stops if you choose to trade.
http://au.news.yahoo.com/thewest/business/a/-/national/17679476/fmg-slumps-on-output-slide/
Like I said do your research and remember to make sure you trade with in your means, sticking to a plan.
With the currently political instability, problems in the US and China slowing the Australian mining sector continues to take a hit. It is for that reason that BHP and Fortescue are interesting prospects to go short on.
BHP
Have a read of the article below which ran on the Forbes website yesterday 27/06/2013 leading off with 'Base materials have been a heavy load to bear over the past two years since the China recovery has never really taken hold. This is seen in the shares of natural resources companies, such as BHP Billiton'.
Now the Forbes article is referring to the US share price, but it is reflective on the ASX at the moment. Keep your eye on the trend here and monitor demand but definitely a stock to go short.
http://www.forbes.com/sites/zacks/2013/06/26/shares-of-bhp-billiton-hit-four-year-low/
Fortescue FMG
FMG has been in a downward trend since February now and is not showing signs of breaking out of this. Last week the Western Australian reported that 'shares in Fortescue Metals Group have tumbled after the iron ore miner cut its production guidance by two million tonnes for the financial year, citing the impact of "unseasonable wet weather" on its operations'.
Further to this FMG have themselves said that 'Fortescue is now in a phase of significant cost reduction and continues to focus on operational efficiencies which will see it moving down the global cost curve'.
All in all this looks very much like it has further to fall but monitor demand and set tight stops if you choose to trade.
http://au.news.yahoo.com/thewest/business/a/-/national/17679476/fmg-slumps-on-output-slide/
Like I said do your research and remember to make sure you trade with in your means, sticking to a plan.
Monday 24 June 2013
Make Money With Take Over Targets
Now what I am about to talk about is not easy, per what the article says you almost need insider information (which is illegal and you should never seek - you will be in a lot of trouble is caught) to get ahead.
However, having said that if you are very smart and keep your finger on the pulse you can make a very good return from buying potential takeover stocks. Go back and look at BHP and RIO before the GFC when these two companies were in the process of a takeover, the stocks went nuts!
Here is the start of an article from the financial review smart investor with a link to the whole article that sums it up perfectly;
"Share investing is usually a get-rich-slow proposition. Equity holders are rewarded over the long term through dividend payments and capital gains for investing their money in listed companies.
But certain events – such as a takeover bid – can make a company’s stock price skyrocket, delivering an immediate potential windfall to shareholders. To reap the best returns, however, you need to hold the stock before it becomes a takeover target and without insider information, it can be tricky – but not impossible – to pick the companies that will be targeted.
The pay-off for owning a takeover target can be significant. A credible bid usually drives a company’s share price higher as soon as an offer is made, even though the actual sale may take months or years to come to fruition – or may not go ahead at all.
Australand Property Group’s shares jumped 6.3 per cent in December when the company received an unsolicited takeover offer for part of its business from GPT Group. Similarly, financial advice and accounting company WHK Group’s shares rose 8.7 per cent in October when it was approached by another financial planning business, SFG Australia, for a possible merger."
Read the full article here - http://www.afrsmartinvestor.com/p/magazine/get_rich_quick_buying_takeover_targets_HMW4WYqh2MwcsSRwesqdvL
So where to you go from here? my advice to get ahead of the rest is to set up some Google alerts, these will directly email you for certain search terms such stock market news or company takeover. Once you have the info on a possible target you can monitor volume and decide if you want to trade.
Oh and if you need info on how to set up a Google alert you can find it here
However, having said that if you are very smart and keep your finger on the pulse you can make a very good return from buying potential takeover stocks. Go back and look at BHP and RIO before the GFC when these two companies were in the process of a takeover, the stocks went nuts!
Here is the start of an article from the financial review smart investor with a link to the whole article that sums it up perfectly;
"Share investing is usually a get-rich-slow proposition. Equity holders are rewarded over the long term through dividend payments and capital gains for investing their money in listed companies.
But certain events – such as a takeover bid – can make a company’s stock price skyrocket, delivering an immediate potential windfall to shareholders. To reap the best returns, however, you need to hold the stock before it becomes a takeover target and without insider information, it can be tricky – but not impossible – to pick the companies that will be targeted.
The pay-off for owning a takeover target can be significant. A credible bid usually drives a company’s share price higher as soon as an offer is made, even though the actual sale may take months or years to come to fruition – or may not go ahead at all.
Australand Property Group’s shares jumped 6.3 per cent in December when the company received an unsolicited takeover offer for part of its business from GPT Group. Similarly, financial advice and accounting company WHK Group’s shares rose 8.7 per cent in October when it was approached by another financial planning business, SFG Australia, for a possible merger."
Read the full article here - http://www.afrsmartinvestor.com/p/magazine/get_rich_quick_buying_takeover_targets_HMW4WYqh2MwcsSRwesqdvL
So where to you go from here? my advice to get ahead of the rest is to set up some Google alerts, these will directly email you for certain search terms such stock market news or company takeover. Once you have the info on a possible target you can monitor volume and decide if you want to trade.
Oh and if you need info on how to set up a Google alert you can find it here
Tuesday 18 June 2013
2013 Gains Wiped Away
The last few weeks have been tough ones on the Australian share market with all but wiped away any gains for 2013. This has been sparked by fears that central banks in the US will pull the pin on cheap money.
At one point last week the ASX 200 hit an intraday low of 4658 points - only slightly above where it was at the start of the year, at 4644. The All Ords hit its lowest point of the year at 4650 points.
The market has now fallen 10.1 per cent since its highest close for the year in mid-May, entering into what is widely considered a correction. Tonight is also big for the market with the US federal announcement bound to have knock on effects for our market......we wait and hope it is good news.
The good news is for home owners with the Reserve Bank of Australia has indicated it is prepared to cut the cash rate further even though the Australian dollar is falling. In its June board meeting minutes, the central bank says the high Australian dollar has been a drag on much of the non-mining sectors of the Australian economy.
The RBA has said ‘‘The exchange rate remained at a high level considering the decline in export prices over the past year and a half. It was possible that the exchange rate would depreciate further over time, as the terms of trade declined, which would help foster a rebalancing of growth in the economy.’’
It is going to be an interesting 24 hours - happy trading
At one point last week the ASX 200 hit an intraday low of 4658 points - only slightly above where it was at the start of the year, at 4644. The All Ords hit its lowest point of the year at 4650 points.
The market has now fallen 10.1 per cent since its highest close for the year in mid-May, entering into what is widely considered a correction. Tonight is also big for the market with the US federal announcement bound to have knock on effects for our market......we wait and hope it is good news.
The good news is for home owners with the Reserve Bank of Australia has indicated it is prepared to cut the cash rate further even though the Australian dollar is falling. In its June board meeting minutes, the central bank says the high Australian dollar has been a drag on much of the non-mining sectors of the Australian economy.
The RBA has said ‘‘The exchange rate remained at a high level considering the decline in export prices over the past year and a half. It was possible that the exchange rate would depreciate further over time, as the terms of trade declined, which would help foster a rebalancing of growth in the economy.’’
It is going to be an interesting 24 hours - happy trading
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