News and Comment from Dennehy Weller & Co
Wednesday, February 8, 2012
7-Dec-2011 | |
Did you spot the headlines last week on co-ordinated action by the world’s central banks to help the eurozone? This was not a solution, but it has bought a bit of time for politicians. This Friday (9th December) we will begin to find out if they are using that time wisely. | |
2-Nov-2011 | |
SUMMARY The outcome of eurozone summit last week was merely disappointing rather than apocalyptic. Markets bounced strongly. But don't hold your breath, it's already unravelling. | |
5-Oct-2011 | |
George Soros blames the markets for the woes of indebted economies, but the reality is that the world (at least a large part of it) has fundamentally changed, and markets and economies are going through a period of adjustment, sometimes painful. This will create new opportunities. | |
6-Sep-2011 | |
Markets have been unfolding much as we expected. The worst of the Eurozone crisis lies ahead, and the global implications of that alone can undermine whatever Obama and his merry men might conjure up in coming weeks. But such crises create opportunities which are rare, so patience remains the key ingredient. | |
9-Aug-2011 | |
The UK stock market is headed towards our target of 4800 as we write, and the global markets are falling in tandem. It is time to start building a shopping list as outstanding opportunities arise. | |
18-Jul-2011 | |
8-Jul-2011 | |
Gerry Adams, Martine Le Pen, and a Greek colonel. Is this Trichet's destiny? Political risk is rising and dangerous. | |
11-Jun-2011 | |
The global economy has developed a sinking feeling in recent weeks, right on cue for the Titanic anniversary. But there will be outstanding opportunities for those that are patient. | |
12-May-2011 | |
The end of humanity is nigh, but not before a commodity price crash, followed by the greatest investment opportunity ever! At least that's the gist of some recent research which we review here. | |
12-Apr-2011 | |
It is remarkable that stock markets have held up so well in recent months, with so much to worry about. But don't be complacent. It is what we call a "cartoon moment", as we explain. On the one hand you mustn't be surprised by falls around 20% from current levels, on the other hand those that are patient will be rewarded by the cheap buying opportunities. | |
8-Mar-2011 | |
There are two "bumps in the road" just ahead. First another attempt to agree a solution to eurozone debt problems. Secondly the current stimulus being applied to the US economy will run out in June - it is unclear whether their economy can stay upright without that crutch, and there is waining support from their authorities to provide more of the same. There could be an uncomfortable patch for markets just ahead. | |
10-Feb-2011 | |
We will get answers to three key questions by the end of 2011, with the eurozone being put to the test first in the weeks just ahead. If these three issues can be resolved through 2011, the debt problems of much of the developed world could be gradually controlled. We live in hope. But living in hope is not an investment strategy, so we cover your options in the latest edition of the TopFunds Guide, now available. Do email back for your copy. | |
9-Dec-2010 | |
In summary, European banks lent capital to Irish banks, who in turn lent it out to inflate the Irish property bubble. But the banks got it all wrong. So the Irish government stepped in to guarantee the Irish banks. The Irish government then got it all wrong, the banks losses swamping the government and Irish economy. Then the EU stepped in to guarantee the Irish government. And the guarantee now sits with the Irish taxpayers/voters, as everyone else has decided they should foot the bill and pay the interest - effectively to bail out the European banks who lent the money to Ireland in the first place. Hmmm. | |
30-Nov-2010 | |
This is an interim note. In summary, as you know we have been cautious for some time, though last month we identified possible reasons to be more optimistic about the potential in the short term. Events of recent days have blurred the possibility of short term optimism to such an extent that we are reverting to our previous stance – be cautious, and emphasise capital preservation. | |
8-Nov-2010 | |
SUMMARY Last week was a very important week, in particular in the context of the Federal Reserve confirming its willingness to keep printing money. As such this commentary is a bit longer than the norm, as there are important themes and possibilities which need to be aired. | |
10-Oct-2010 | |
A month for head scratching as investors take sharply opposing views. It makes a bit more sense if you lift the lid a little, but still doesn't fill us with confidence after a September that was the best for the stock market since the 1930s. | |
10-Sep-2010 | |
SUMMARY For a change there is good news as well as bad. The US is still in a pickle, the Irish are being punished for grasping the austerity nettle, and the French just don't get it. But UK businesses appear confident, and the Japanese precedent might be more positive than you have been led to believe. | |
5-Aug-2010 | |
SUMMARY There is an eerie calm in stock markets, but UK and US government bond yields are sending a more cautious message. As is Ben Bernanke, the major hedge funds, and the economic stats coming out of the States (to name but three!). As the song said "There are more questions than answers". | |
9-Jul-2010 | |
SUMMARY Markets have stabilised a bit in recent days, which is to be welcomed and provides some respite. But it is no time to relax, and the newsflow has been very poor. Nonetheless you can make money in this environment, as we cover in the latest edition of the TopFunds Guide - please email back to confirm you would like a hard copy in the post. | |
10-Jun-2010 | |
SUMMARY Signs of stress in markets, some subtle, continue to build. action in May hints at trouble ahead for some corporate bond funds, and there are three in this bulletin out of which we suggest you switch. | |
6-May-2010 | |
SUMMARY As events have unfolded this week, both in Greece and beyond, the balance of risk and reward has altered and we believe it is prudent to reduce your stock market exposure now, and switch into lower risk funds. | |
Interim investment commentary - Greece, a symptom of bigger problems | 30-Apr-2010 |
Perhaps you're already swamped with comment about Greece. But it appears to us that many commentators are far too relaxed, haven't considered the problem in its proper historical context, and have had little or no regard to the social dimension. Increasingly taxpayers and voters will take control throughout Europe, and this will considerably increase risks for investors. A period of extended vigilance, years, is upon us. | |
14-Apr-2010 | |
SUMMARY. There is no denying that the UK stock market remains in a clear uptrend. Although the UK election creates uncertainty, it is only of passing interest to the stock market, which has bigger concerns in the long run. In the short term a fall to 5000 on the FTSE 100 index should not be a surprise, and would in all probability create a buying opportunity. | |
8-Mar-2010 | |
SUMMARY. The UK stock market has performed better than many others over the last month, including the likes of China and India. Can it last? Plus corporate bonds continue to make money, despite pronounced volatility elsewhere. | |
11-Jan-2010 | |
SUMMARY. After a remarkable couple of years we enter a year of transition, the hope being growing evidence of a self-sustaining recovery (i.e. not reliant on Government support). The range of possible outcomes is wide (as it was a year ago), so we must all stay vigilant and not let the sharp recovery in investments through 2009 make us complacent. | |
4-Nov-2009 | |
SUMMARY. Last month we suggested taking profits, now uncertainty is clearly creeping in. Yet the dark clouds hide a more encouraging future, less reliant on extraordinary levels of debt which create only the mirage of wealth. | |
7-Oct-2009 | |
A variety of indicators suggest that you should be taking profits in some areas, and re-balancing towards others where there is obviously more value, or outstanding long term growth potential. | |
9-Sep-2009 | |
Some clear but unexpected messages came out of markets in August. There are obvious opportunities as the Autumnal clouds build. Just be careful. | |
3-Aug-2009 | |
It has been a very positive month for stock markets, both in the UK and globally. In the short term the UK market might go a touch further, perhaps 4800-5000, but you should not be surprised if it falls back a bit, before resuming the assault on 5000. | |
PS please email back for a copy of the latest TopFunds Guide, due shortly | 2-Jul-2009 |
2-Jul-2009 | |
SUMMARY. On the 40th anniversary of the marvelous M&G Recovery fund it is a good time to review the idea of long term investing. The good news is that the omens are positive for those that are truly long term investors rather than just punters. | |
7-Jun-2009 | |
SUMMARY. A debate is raging as to whether the weight of government debt will eventually sink the UK economy. So far the markets support those that believe a new, albeit unexciting, stability is in place. But some adjustments to portfolios should be considered. | |
7-May-2009 | |
SUMMARY Risk appetites have returned, stock markets around the globe are recovering strongly. But what is driving this bounce? And is it sustainable? | |
15-Apr-2009 | |
ALERT - higher rate tax relief on pension contributions could be under threat in next weeks Budget. It might be sensible to bring forward contributions. | |
6-Apr-2009 | |
SUMMARY. Last month we were inclined to be positive, and newsflow and market moves since have justified this. But we cannot afford to be complacent. | |
25-Mar-2009 | |
SUMMARY. The end of the tax year is just ahead. Please do not leave it until the last minute to ask for applications or to send cheques. And a quick market update. | |
9-Mar-2009 | |
The point of maximum panic was endured in the Autumn, now there are signs that the low point for the stock market is close by, and there are also tentative signs that the economic downturn is slowing. | |
8-Feb-2009 | |
The media newsflow is very negative, particularly around the emotive, but undoubtedly serious, unemployment trend. Nonetheless, if "less bad" is the new "good" for 2009, the last month has been good. | |
14-Jan-2009 | |
SUMMARY. Recessions are not the end of the world, they are a process for sorting winners from losers, as the retailers have vividly illustrated. For investors the greatest problem is that when markets begin to discount the economic recovery, whenever that might be, history tells us the bounce will be fast and furious. So do not try and fine tune your timing, and position yourself sensibly, and in as low risk a way as possible, now. | |
8-Dec-2008 | |
SUMMARY The news flow has been poor, and will continue to be for some months. But there are early signs of stability, from stock markets, mortgage applications, and the growing consciousness that the cost of living is falling, fast. | |
6-Nov-2008 | |
SUMMARY Wow. It had everything. An October that was the worst ever for some stock markets, but also contained the largest daily gains ever. A US legislator that didn’t think avoiding financial Armageddon was sufficient incentive to pass a straightforward piece of legislation. Gordon Brown, the saviour of the world. Dividends at levels last since at the time of the Battle of Britain. Corporate bonds pricing in 50% of the UKs best businesses going bust in the next 5 years. Then November dawned with Barack Obama emerging through the gloom, and the UK authorities looking like they really do understand both the current problems and solutions. | |
7-Oct-2008 | |
SUMMARY. In September 2008 a relatively straightforward downturn in the real economy met a deeply intensifying banking crisis. A breathtaking month. Even The Sun appeared to run out of superlatives on its front page. The extreme turbulence has continued into October. Here we review what went on (as briefly as events allow!) and set out chinks of light. | |
22-Sep-2008 | |
The credit crunch is something of a myth beyond the narrow financial world where its effects have a real impact. Yet this last week we were able to peek into an ugly parallel world where the debt bubble that inflated in the years up to Summer 2007 splatted the globe; a world without Ben Bernanke. | |
8-Sep-2008 | |
SUMMARY. Action to nationalise the two US mortgage giants was another encouraging initiative by US authorities to shore up financial markets. But the global economic downturn triggered by the inflation shock this year (not the credit crisis that began last year)could yet push the UK stock market lower - at which levels there will be very rare buying opportunities, if history is a guide. | |
24-Jul-2008 | |
SUMMARY We reflect on a remarkable couple of weeks when the trends of the last year were turned on their head: banks shares have been rising sharply and commodity prices falling. And do you remember when we all used to wish for a world with more affordable housing, less debt, less use of fossil fuels? Well, it looks like we're getting there. | |
1-Jul-2008 | |
SUMMARY. Perhaps the worst of the credit crisis is over, but inflation pressures are worrying the stockmarket, and may well delay the stockmarket recovery, where we need a break upwards through 6500 to give confidence that the worst is behind us. | |
4-Jun-2008 | |
SUMMARY. A fascinating month, and an encouraging one for those of us not inclined to hysteria in prior months. Where it was assumed that the US was already in recession, now it is regarded as a 30% risk, and the OECD predicts it will not happen at all. Nonetheless, it pays to be vigilant, and one way to try and remain level-headed is to consider the lessons of history | |
4-Jun-2008 | |
8-May-2008 | |
The "credit crunch" is covered by the media every day, but few attempt a definition. Yet, by definition, it is arguable that there has been no credit crunch. | |
7-Apr-2008 | |
There will be an economic slowdown in the UK, but parallels with earlier periods are over-stated and here we provide some perspective, so we don't get distracted from acting on emerging opportunities. | |
29-Mar-2008 | |
4-Mar-2008 | |
SUMMARY. Warren Buffett (the worlds richest man) is energised by recent events, particularly with signs of panic in bond markets. Though more volatility must be expected, people like Buffett know that times such as we are now encountering create rare value for long term investors. | |
7-Feb-2008 | |
SUMMARY. In the week beginning 21st January there was wall to wall hysterical media reporting about financial markets. Yet by the end of that week the FTSE 100 index was down by just 31 points. Whether or not there is more hysteria to come, value has already emerged across a number of asset classes. | |
15-Jan-2008 | |
Despite the impression created by the media, equities were barely touched in 2007 by the credit crunch. Yet considerable uncertainty remains, and with the FTSE 100 index in the same place it was 10 years ago, we consider the outlook for 2008. | |
17-Dec-2007 | |
Happy Christmas to you all, and best wishes for a prosperous New Year. Rather than send volumes of cards our preference is to support a number of charities throughout the year. This year we also bring you something a bit more fun, our Christmas Quiz, with a prize for the winner of £250 to a charity of your choice. | |
3-Dec-2007 | |
Midst a volatile stockmarket and more hysterical press reporting it is possible to have over-looked the positive signs, which are very real. And did you hear the one about the US dollar? | |
9-Nov-2007 | |
Recession? Not if the Federal Reserve has their way. Stockmarket "Crash"? Not with current undemanding valuations. Investment volatility is uncomfortable in the short term, but creates opportunities for the long term. | |
5-Oct-2007 | |
In the midst of Armageddon-style headlines through August and September, most of us are left wondering what all the fuss is about (that is unless you work for a hedge fund or investment bank, hold/held an account with Northern Rock, or suffer from a poor credit history). | |
2-Sep-2007 | |
SUMMARY. Of course it is possible that this summer's drama could turn from black comedy to horror, but contrarians will be hugely encouraged by the news that institutional pension funds have their lowest weighting ever invested in the stockmarket. | |
20-Aug-2007 | |
SUMMARY. Problems resulting from interest rates being too low for too long have spilled over into stockmarkets, and a long over-due correction is underway. Should you be concerned? Are there opportunities? | |
1-Aug-2007 | |
SUMMARY. Very low interest rates have been one of the pillars of the strong global recovery in recent years. As interest rates head up, and with troubles in the US, we consider the implications. | |
6-Jul-2007 | |
SUMMARY. Japan has hardly taken off in 2007, but there is increasingly good value in their smaller companies, some of the best value to be found anywhere in the world. | |
2-Jul-2007 | |
The new "Dealing and Research Centre" is live on our web site. This replaces the old valuation facility, and you need to ensure you register to take full advantage of this, including a buy and switch facility. | |
4-Jun-2007 | |
More twitchy media reports about the Chinese stockmarket, which seem difficult to justify. Even heady Chinese valuations do not look so high when historical precedents are considered. Global markets are coping well with a number of potentially serious problems,so keep enjoying the party. | |
3-Apr-2007 | |
Most stockmarkets have recovered, or nearly so, from the not very significant falls earlier in March which generated hysterical media coverage. There are growing signs that the UK economy is slowing, which will have the positive effect of ensuring that we don't repeat the mania of 1999/2000 any time soon. In this environment equities remain the asset class of choice, and the better fund managers will continue to find money-making opportunities. | |
5-Mar-2007 | |
This month we focus on some rather minor stockmarket falls, and the extreme reaction from the media. Private investors should not get distracted by this side show, and focus on their own objectives, timescale for investment, and attitude to risk. | |
5-Feb-2007 | |
Fund managers with a roving brief are buying both very large companies (which has been well publicised) and smaller companies, where they are identifying pockets of value. On the latter theme we also highlight that Japan could be the positive surprise of 2007. | |
4-Dec-2006 | |
SUMMARY. Rather than focus on concerns over a wobbly dollar, we take a more positive look at the huge potential in emerging markets, and China and India in particular. | |
1-Nov-2006 | |
SUMMARY. Like Alice in Wonderland, nothing is quite as it seems. The stockmarket falls from May can now be seen, with the benefit of hindsight, as being of no great significance. The UK stockmarket is nearly 90% above the stockmarket lows of 2003, but is cheaper than it was then. Should we be worried, or just confused? | |
6-Oct-2006 | |
SUMMARY: Emerging markets (India and China and much else besides) hold out fantastic growth potential. These are the thoughts of arguably the most respected fund manager in the world, Dr Mark Mobius. | |
1-Oct-2006 | |
SUMMARY. The Dow Jones stockmarket index in the US has hit an all time high, but all is not as rosey as it appears. We would welcome some moderate price falls in the short term, to lay the foundation for profitable opportunities as we move into 2007. | |
1-Sep-2006 | |
SUMMARY. As we move towards the all-too-often turbulent Autumn, and the US consumers support of the world economy seems increasingly at risk, should you be spooked? | |
1-Aug-2006 | |
SUMMARY. A little over exuberance in the stockmarket in the last week or so is being curbed by news of a rise in UK interest rates. But the UK stockmarket looks increasingly good value. | |
1-Jul-2006 | |
SUMMARY. Is the worst over? Perhaps not yet in our view, though beyond Autumnal wobbles, the rest of the decade could be very profitable. | |
1-Jun-2006 | |
SUMMARY. The volatility that we anticipated has begun, particularly in the Far East and Emerging Markets. We reflect on the need for patience, some domestic madness in India, and some hidden gems. | |
18-May-2006 | |
The markets have begun to wobble. Is there any cause for concern? | |
2-May-2006 | |
SUMMARY. The commodity charts look worryingly like those for technology shares in 1999. Risks are rising. It is time to re-acquaint ourselves with investment basics, and the potential for sharp falls in higher risk investments. | |
3-Apr-2006 | |
SUMMARY With the UK stockmarket overdue a correction, we look at how severe this might be, how close we might be to that point, and the seeds being sown for the US to wobble later in 2006. | |
2-Mar-2006 | |
SUMMARY. Do the way that institutions are managing their portfolios give private investors any clues as to how to improve their own returns? We conclude that they do, though not in the way you might expect. | |
1-Feb-2006 | |
From time to time we consider one basic, but effective, indicator to assess if the stockmarket is into dangerous territory. More on this below. | |
1-Dec-2005 | |
It is the time of year to review our monthly commentaries through 2005. We began the year optimistically (rightly as it transpired), and end it concerned with some speculative excesses. | |
1-Nov-2005 | |
Alan Greenspan, arguably the worlds most powerful man, is to be replaced as head of the Federal Reserve in 2006. We consider his challenges, and the latest trends in the UK. | |
1-Oct-2005 | |
Greenspan is determined to push US interest rates higher, so do not be caught out as the froth comes off oil and gold. | |
1-Sep-2005 | |
What are the implications of bird flu spreading? We identify some strange priorities, and possible opportunities if markets wobble in the Autumn. | |
1-Aug-2005 | |
Reasons to be cheerful? Liquidity is driving all asset classes upwards. Ride these positive trends by all means, but don t overdo it. | |
1-Jul-2005 | |
Market commentary for July 2005 focussing on signposts for the more active investors amongst you, who are probably trading individual shares on a regular basis. More long term investors should not panic! | |
1-Jun-2005 | |
Market commentary for June 2005 focussing on European referendums, the increasingly negative social mood, and a long view on house prices. | |