Morning Report Thursday 13 August 2015
Panic Selling is Upon Us and Opportunities are Rising
Firstly, we are very sorry for the incorrect comment in yesterday’s afternoon report, yesterday was not the largest one day loss for 7 months, as a number of you pointed out, last Friday was actually worse. Please note we appreciate any feedback on reports as we continually strive to improve our service.
Yesterday was a very tough day for most investors in the market, including ourselves, despite the fact we called this significant pullback in the ASX200 previously. On Tuesday, our Fortescue Metals (FMG) trading position was looking excellent, showing profits well over 50%, when suddenly the Peoples Bank of China (PBoC) made their move in the FX market. FMG has now fallen 11.4% in two days and our position is now up ~10%. We will be watching this very carefully, but Vale’s 3% improvement overnight is a good sign for today. Also, yesterday we raised a few eyebrows by closing our slightly profitable gold positions and allocating part of the monies to ANZ Bank, above our ideal target area. This was a simple “Keep it Simple Stupid” (KISS) decision that may look questionable today. The logic at the time was as follows:
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