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The Comeback Kid

Good afternoon. It was nice to be back in the chair at Sky News last night on Your Money Your Call. It was brand new however and  extremely uncomfortable. No chance of dozing off in that chair.

The theme for the night was generally positive with many people ringing in to ask what they should do with their stocks that had performed particularly well. These included all four major banks, Telstra, Seek, Crown, Ramsay Health Care, JB Hi-Fi and Flight Centre along with several others. It was hard to draw a sell call from the panel although all agreed that the general selection of high yield stocks which have been chased so aggressively over the last 12 months would not outperform the overall index in the next year. Interest rates are still widely predicted to stay low and perhaps even fall one more time in November. I would say that most analysts are recommending  lightening overweight holdings in these stocks with some switching to the growth stocks as mentioned above as well as looking again at our underperforming resource sector. RIO, BHP and Fortescue got their usual run although when we dropped to the small and mid caps there was still plenty of aversion, particularly for any stock that may be looking for capital at the moment.

Buru Energy got their capital raising away which prompted multiple analysts to come up with price targets well above the current market.

Silver Lake Resources also managed to raise capital although at prices close to a quarter of where they were 12 months ago.

Paladin‘s capital raising has done them no favours with the stock languishing well below the placement price.

Plenty of attention being given to the Trust Company with IOOF Holdings coming in to trump Perpetual Trustees bid for the company. Whether Perpetual comes back for another go or not, it does not appear there will be any losers in this trio.

Finally the 10% rally in the price of McMillan Shakespeare over the last couple of days is yet another indication of the inevitable victory of the Coalition this weekend.

All the best.


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