ASX shares spinning down, Europe on the brink of bringing out something big, and an important announcement. It’s all part of the stockmarket fun and mayhem at The Motley Fool. A little further down we have some important information to tell you about… But first, the news in the weird, wonderful, whacky world of high finance and sharemarkets… Another week, and surprise surprise, more worries about Europe. I just want to go UP Sharemarkets are in a spin. We’re convinced markets want to go up, but they can’t whilst all these macroeconomic factors remain unresolved. It seems Perennial Investment Partners…
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ASX shares spinning down, Europe on the brink of bringing out something big, and an important announcement. It’s all part of the stockmarket fun and mayhem at The Motley Fool.
A little further down we have some important information to tell you about…
But first, the news in the weird, wonderful, whacky world of high finance and sharemarkets…
Another week, and surprise surprise, more worries about Europe.
I just want to go UP
Sharemarkets are in a spin. We’re convinced markets want to go up, but they can’t whilst all these macroeconomic factors remain unresolved.
It seems Perennial Investment Partners portfolio manager Grant Oshry might agree. He was quoted in The Australian Financial Review as saying “Australian company fundamentals are sound – it is more just a case of negative sentiment.”
These guys know what they’re talking about…
Perennial should know a think or two about investing. They won the 2010 Morningstar Fund Manager of the Year for domestic equities – small cap Australia.
Perennial is a fund manager Dean and Bruce follow closely. You can get some great investing ideas from seeing what some of the best investors out there are holding in the fund they manage.
Two that caught our eye were Horizon Oil Limited (ASX: HZN) and Ausenco Limited (ASX: AAX), but please be aware we haven’t dug into the companies at all, and this is most definitely not a recommendation.
This is one stock we’re happy to recommend…
What has been a recommendation of ours, both previously and today, is Telstra Corporation (ASX: TLS).
“Boring” I can hear the stock jocks amongst you saying.
Sure, you’re not going to make millions buying and holding Telstra. But you are going to get 2 things…
1. Stability. Over the past 6 months, whilst the market has fallen over 10 per cent, Telstra shares have gained over 5 per cent. That is a stunning level of out-performance.
2. A very attractive dividend. Our Investment Analyst Dean Morel firmly believes the 28 cents annual Telstra dividend is safe for a few years to come. With the shares trading around $3.17, that gives Telstra a dividend yield of 8.8 per cent. With bank interest rates headed down, it’s a yield Dean will take any day.
On Friday, Telstra said it was experiencing “…strong sales momentum in the opening months of fiscal 2012…and remains on track to meet guidance for our fiscal 2012.”
Dean continues to like, and hold the shares, as does Bruce. Sometimes boring is beautiful.
Bring out the Bazooka
How will it this European sovereign debt crisis end?
With the bazooka gun, of course.
Whilst we have a general distrust in politicians, when push comes to shove, we’re confident they’ll come up with a ‘muddle through’ solution.
Charlie Aitken of Bell Potter puts the European turmoil into some perspective for Australian investors…
“Honestly, these Europeans markets are becoming like your embarrassing second cousin. You know you are vaguely related, but you don’t want to admit it.
Australia’s closer relatives in China, India, greater Asia and the USA continue to see accelerating GDP growth, yet our equity market and currency (99.85usc) are reacting hour by hour to the stupidity of our distant relatives.”
Markets gone mad
And if you’re like us and think the financial world truly has gone around the twist, you’ll find the irony in institutions rushing to the so-called safe haven of the good old U.S. dollar.
Wasn’t it the Americans and their silly debt celling crisis that started the run on markets earlier this year?
As for that other supposed safe haven, gold…well this week gold it had its biggest fall in seven weeks.
“Investors move out of risky assets,” said Marcus Grub of the World Gold Council on Bloomberg.
“They move out of equities, they move into short-dated bonds and into cash, and they even move out of gold because they tend to take profit in it to shore up losses in the rest of their portfolio.”
(As an aside, if you are worried about the market crash, you might want to first check out our new free report, Read This Before The Market Crashes. It could save you hours of heartache, and thousands of dollars. Click here to request your report now, whilst it’s still free and available.)
Down, down, dollar is down
The press are focusing on the falling Aussie dollar. The heady days of $US1.10 are long gone. Parity is under threat.
We’re not surprised of course, having long been saying the AUD was over-valued.
We still think it has further to fall, seeing as local interest rates here have just been cut, and with all this European carry-on smashing world sharemarkets, it’s also effecting business and consumer confidence.
What are the odds of a second interest rate cut before Christmas? Another week of silliness in world sharemarkets, and you can start putting it down as a sure thing.
Are we off our rockers?
In such an uncertain market, with doom-mongers happy to predict Armageddon and a second GFC, you’d think we’re off our rockers trying to launch a subscription newsletter in this marketplace.
Maybe we are. Time will tell.
We like to keep things simple at The Motley Fool.
We don’t try to second-guess politicians, what may or may not happen in Europe, when and where the next crisis might bob up, whether the S&P/ASX 200 index will end 2011 year higher or lower, or if Ricky Ponting should have retired 3 years ago.
Instead, we focus our energies on two main things…
1. Helping guide you, our loyal Take Stock readers, through these volatile and uncertain times.
2. Bringing you our very best individual company ideas.
The important information…
Today we can exclusively reveal the name of our forthcoming subscription-only share recommendation service.
After engaging a myriad of focus-groups, marketing consultancies, expensive legal people, and you, our Take Stock readers, we were left with a short list of Wallaby Herder, True Gold, That’s Gold But Just Don’t Buy The Stuff, True Blue, We Are True, True Fair Dinkum Stock Tips Mate and Sh1t Hot Investing.
It was around then the brand-police stepped in and shot us down.
A few after-work beers later, we came up with…
Motley Fool Share Advisor
Sorry to all those people who really loved Wallaby Herder, and to our colleague Brian, who really fell in love with Sh1t Hot Investing. We liked that name too. Maybe next time…
For people who don’t already know this, The Motley Fool was founded in the U.S in 1994 by brothers Tom and David Gardner.
Amongst many other media and personal appearances, you may have seen CEO Tom Gardner being interviewed by Ticky Fullerton on ABC Lateline Business earlier this year.
For the avoidance of doubt, Tom is the one in the middle of the picture.
Tom and David head up the wildly popular, and successful, U.S newsletter service called Motley Fool Stock Advisor. I think you can see where we came from in coming up with the name for our brand new Australian service.
Like we said, we like to keep things simple…
The Gardner Video
Anyway, Tom and David have just finished recording a video introducing themselves, The Motley Fool brand, and what it stands for, Bruce, Dean and Motley Fool Share Advisor.
We’ve just had a sneak preview, and we’ll make sure we send it to our Take Stock readers early next week. We think you’ll like it. We did, but then we’re a little biased.
Next week we’ll also give you more details around Motley Fool Share Advisor.
As we said previously, we will be restricting the initial intake of subscribers, so you might have to act quickly. (Although we might have some good news on that front too…stay tuned)
Next week we’ll also attempt to answer the question “What should Angela Merkel really do to tame these markets and let us get on with picking great shares at cheap prices?”
In the meantime, we’ll leave you with some compelling weekend reading.
Only this week Peter told us he still holds AMA Group shares, saying “you won’t do too badly even if you snap them up at these prices, but that is only my biased opinion.”
It’s time to get greedy with ASX shares, by Peter Phan
The second is by Scott Phillips, our feature columnist and the person who writes most of our articles on The Sydney Morning Herald, The Age, Brisbane Times and WA Today.
3 ways to lower your sharemarket investing risk, by Scott Phillips.
If you are looking for another stock you can bet on now, readers need look no further than The Motley Fool’s Top Stock For 2012. Click here now to request this special report, while it’s still free and available.
Dean Morel has positions in Telstra and Hunter Hall. Bruce Jackson has an interest in Telstra, Westpac, ANZ and NAB. The Motley Fool has an interest in disclosure.