Bearishness reaches a short term crescendo

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S&P to drop 14%… China misses earnings… VIX at a 4 month high… Greek deadline Sunday eve…Spanish bailout woes… the list of bear stories on Friday was seemingly endless. Packaged with all pervading negative sentiment, as detailed in the blog here – and heavy oversold readings on the major markets (ex Japan which is our top pick and continues to hold its own in recent weeks), our contrarian noses continue to twitch.

With Apple missing earnings quite extensively and yet the stock resilient and the markets turning around sharpy yesterday, it is apparent to me that we are finding a floor around the 5750/60 level. We still target 6000 in the weeks between now and Xmas.

As ever, our powder was focused upon the mining sector, with a 3rd chomp at the bit this week in KAZ, ENRC, BUMI & LMI. Readings on these stocks are extremely oversold but interestingly, as a basket, they are now holding their own against the FTSE, ie underperformance is waning. With the exceptionally cheap valuations and continuing sigs of growth in the global economy (ex selected Europe), it is only a matter of time before a sustained rebound occurs and/or corporate activity begins to take place in the sector in our opinion.

We are now into the 3rd month with our recently seeded managed spread betting funds funds and the flagship Global Macro fund is now up over 20% in just under 9 weeks against a FTSE that is up just under 3%. During this period we have utilised no more than an average of 30% of our available cash and so have been able to take advantage of dips like today – in other words prudent, disciplined fund management principles adhered to that we continue to advocate in our magazine. 

We anticipate FSA authorisation of our sister company Titan Investment Partners in the New Year and which will offer a selection of managed spread betting funds, with some big name money managers hopefully on the list of managers too. If you’d like to pre-register your interest in this, email and quote FOLLOW ME.

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