Author: james Carter
Morning All,
The oil price has dominated the financial news over the last 48-hours as OPEC finally managed to reach a deal to limit production in an effort to eliminate the excess inventory sitting in storage. OPEC members were clearly backed into a corner with many economies struggling with high debt, low growth and quite simply, they needed a higher Oil price to avoid continuing economic hardship.
The market has been very active / interesting over recent days, culminating in a positive decision from OPEC last night which sent crude oil soaring over 8% – BHP is set to open up $1 this morning, even with a substantially weaker iron ore price overnight. This morning we are going to cover a few topics but predominantly the highly requested stops / exit strategies around our existing portfolio. We understand a number of you are shell-shocked after the collapse of Vocus (VOC) this week, a very uncomfortable move for all of us, however it’s no reason to panic and walk away from a successful strategy
Yesterday was probably our toughest day since the inception of MM, as we saw one of our holdings Vocus (VOC) plummet over 20%, courtesy of a poor update. Simply another story of a local company failing to merge / takeover another business in a successful manner over the short-term. The trend of underestimating how hard the implementation becomes in reality, appears ingrained in companies within the ASX200 – a potential warning to Boral investors in recent days.
Last night was a relatively quiet on Wall Street, with the one thing catching our eye… The strong performance from the Utilities Sector, gaining over 2% on a down day. In a similar but less dramatic fashion to our local “yield play” / utilities sector, the American Utilities have corrected 14.9% over the last 4-months. Our view recently, which led to the purchase of Transurban (TCL) and Westfield (WFD) as the sector had fallen too far, too fast.
Really bullish, there's more to go in the reflation rally
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