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Golden opportunity or just Cultural appropriation?
For Gold bugs, wouldn’t you rather invest in a miner, where its production currency had contracted by almost -20% relative to gold’s principal selling currency, the US dollar? Unfortunately, when the currency in question is falling due to political instability and government threats of confiscation without compensation of property based on race, then the answer […]
Continue readingAT&T Time Warner offer – OK with judge, but now less so for TWX shareholders
Time Warner shareholders may feel a sense of relief that the AT&T bid is now clear to proceed, but the harsh reality is that they are being screwed. Time value and a declining performance and share price of AT&T has seriously eroded the original offer premium to … ZERO. Indeed, it could be strongly argued […]
Continue reading“Normal profits are becoming normal for airlines” – be afraid!
Recency bias is alive and well. “At long last, normal profits are becoming normal for airlines”, so says the IATA in its June 2018 industry update titled “Solid Profits Despite Rising Costs”. After a couple of years of improving margins and ROIC, is this a paradigm shift for investors to jump aboard? Unfortunately, it feels […]
Continue readingOil shocker – producers claim to want lower prices!
Good grief, there’s a lot of tosh spouted on where oil prices are going after Russia and Saudi Arabia pulled the plug on the current rally, once Brent oil hit the magical $80/bbl target. The prize however, must go to Goldman’s straddle, where it seems the ‘technical’ analyst (someone who can draw straight lines) is […]
Continue readingM&S – for once without the flannel
Being long into the M&S results, I was understandably happy to root for the old girl as she struggles to re-invent herself for the modern world. The numbers themselves were broadly as expected and while it was comforting to have the dividend not only held, but forecast to remain that way, I was never in […]
Continue readingRyanair – when the music stops
Many companies resemble sharks. Not just for their need to keep eating new prey to grow, but to keep growing to stay afloat. The capital intensive airlines are perhaps the most glaring example of this in action, particularly given the additional scale advantage that can be secured. The problem for investors however, is being able […]
Continue readingWPP’s armchair warriors
Markets love corporate activity. Bankers love them as shifting assets around companies earns them big fees. Managements love them because they provide opportunities to earn big bonuses. Investors therefore are encouraged to believe all this will enhance shareholder value, so as to endorse the merry-go-round. How many times have we seen acquisition led growth disguise […]
Continue readingTime Warner management need to renegotiate AT&T offer
When a slow, or no growth company offers stock to acquire a faster business, then there is always a risk that time value will whittle away the initial bid premium. For AT&T’s offer for Time Warner, this has been accentuated by the drawn out litigation with the DoJ to get the deal approved as well […]
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