This month has been the opposite of December 2018 which saw a steep decline on Christmas Eve which marked a year low on Wall St. Now we are seeing new all-time highs posted practically every day. Even the derided stock markets of Europe and the UK - as represented by the FTSE 250, are at or near all-time highs. This is shaping up to make 2020 a difficult year for investors long or short. As the spectre of recession in the US recedes somewhat, but with the Fed still ultra dovish should one continue to buy the dips (a spectacularly successful strategy for the last decade)? Presumably Trump, obsessed by the markets, will do everything in his power to keep them up until the November election and so the much-predicted US market sell-off may not materialise for a while yet.
As for the UK - certainly cheap in comparison with most other markets - the blanket buying of quality high yielding UK-based businesses, while tempting, is also risky in that the precise nature of any Brexit deal is still extremely difficult to call and is likely to dog the UK market and currency for a good portion of next year. In short, I think making investment decisions based on macro assumptions next year is a fool’s errand and it will pay to ignore the noise and be very specific when choosing targets long or short. It pays to look for a long that will prosper in a falling market and a short that will decline in a rising one.
On the short side, 2019 has been difficult thanks to the amazing performance of Tesla (NASDAQ - TSLA) which has confounded all critics and as I write is rapidly approaching the $420 buyout level in Musk’s infamous fraudulent tweet. Tesla’s time will come but its valuation defies rational discussion and it should be treated more like a crypto currency than an equity. On a brighter note, the Tesla losses were more than offset by Thomas Cook, where the writing was on the wall for months and the only constraint was finding and keeping borrow. When looking for the Thomas Cooks for 2020, it is worth noting the characteristics that stand out – the share price has already fallen significantly and the company’s management has started to talk about restructuring and "stakeholders". The company has negative equity (its liabilities exceed its assets), its creditors are effectively in control and its debt trades at, or is privately valued at, significantly below face value. Any takeover of the business should not require a payment to shareholders. And, lastly and importantly, there is borrow in the stock.
I have already written about Sirius Minerals (SXX), which I predict will go the way of Thomas Cook next year, but another one which fits a lot of the above criteria is De La Rue (DLAR). It has been forced to sell the only part of its business which does not seem to be in terminal decline (international identity solutions) for £42 million but this will not make a big dent in its debt. Banknotes are being used less and less in developed countries. Most notes manufactured now are much more durable and therefore need replacing less frequently and the sort of countries that need to regularly replace notes in order to add zeros to them have a habit of not paying their bills, hence the £18 million write off from Venezuela.
Lastly, those who followed the InternetQ saga from a few years ago will remember that its principal asset was a phony music streaming business named Akazoo, which was covered in detail on ShareProphets. The good news is that it has been floated on NASDAQ (NASDAQ - SONG). It is still losing money and still looks as dodgy as it did when it was taken private in 2016. I will report back on this one in due course. Happy Christmas and New Year to all.
This article first appeared on the N50 website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of its share tip of the year on Monday from Tom & Steve and a new shorting piece next week click HERE
Filed under: Thomas Cook, Optibiotix, ShareProphets share tips of the year, HotStockRockets
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected]eShareTips.com are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.