Thursday, 9 August 2012

Heading south again . . .

A quick trip to Australia's industrial centre for me today. On the way there and lots of small things to catch up on.

First up my old favourite Xstrata reported a 33% drop in earnings for the 1H. I'm not sure that this wasn't already priced in by the market who is well aware of falling commodities prices. The market is expecting a 22% drop at BHP for the same period. As I said recently I consider BHP worthy of close monitoring, so I'll be using these reports to come to some conclusions on the majors.

Standard Chartered seems to be making a meal out of their defence of supposed banking transactions on behalf of the Iranians. I'm not sure the line that it's just a "series of minor clerical errors" is enough to cut it with regulators any more. Clearly no one in the SC bunker saw the evisceration of HSBC on Capitol Hill recently. Look guys you need to settle this and unfortunately you'll have to hand up the heads of a couple of senior executives along with the cash. Welcome to the new reality.

The Aussies are as bullish as ever if reports out of the "Diggers and Dealers" conference is evidence to go by. No one is giving up on the China story and I guess it certainly makes for better reading than yours truly droning on about Chinese GDP contraction. Perhaps the feisty junior miners need to have a funding failure or two before reining in their project plans. Certainly the news out of BHP and Xstrata suggests that projects will be shelved or at least delayed over the next 12 months. Hint, hint?

I was surprised to read that only 82million of the accounts on Facebook are dormant or errors. That seems very low on a billion account system of this type, but I'm no tech analyst. What I am is someone looking for opportunities and unless Facebook can start to grow revenue soon I'd say my investing dollar is safer in Google or Apple. The PE compression is showing a lot of caution in those names and sure in Apple's case one product failure (say iPhone 5) may be enough to see margins or revenues shrink etc, but what's the likelihood both Google and Apple fail simultaneously? Spread the bet over both as crowded as it is?

I am now without a bike and therefore am back to my faithful Asics Gel Kayano's and the gym for a good workout. It's probably a good thing as recent sessions with my new trainer have once again convinced me that I have no desire for the arms of Chris Froome or Bradley Wiggins. Yesterday I managed to get through the first 4 sets of push ups without significant failure and I felt OK about some of the more technical upper body exercises I was reintroduced to. I hate abdominals, but need them to do them as I've already noticed that I improved on the couple of small climbs I've been doing on the Bianchi. I think you know you're going well on a hill when you are able to stay in the saddle and keep up a good cadence.

I'll try and put down some observations from the trip to Melbourne over the next few days.


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