| | Sunday 17 June 2012 A MESSAGE FROM TOM There are two reasons certain folks choose to own physical gold. Those in camp one believe that fiat currencies will be debased (that has to be a given) and that gold is thus the safe currency to back. If you are an inflation believer you probably hold your gold in a bank vault somewhere...
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ON THE SHARECRAZY BLOG One of the most popular speakers at the Master Investor conferences has been entrepreneur Jim Mellon, and 2012 was no exception. Today, ShareCrazy is pleased to offer, for free download, the PDF that accompanied Mellon's 2012 Master Investor presentation. Click-right here to download the PDF right now.
You can still order the DVD with the full presentations of all the Master Investor 2012 stage speakers by ringing 01624 641 343 or sending an email to admin@t1ps.com.
Click-right here to download the PDF
The Week Ahead Elections, BoE minutes, Whitbread
Unusually, focus next week will be more on polling stations than stock markets, with Greece, France and Egypt all holding elections over the week-end.
The key one for the future of the Eurozone is Greece, although a Socialist victory in France could also have interesting repercussions for the future of the shared currency.
Guessing which party will hold the whip-hand in the Greek general elections and assessing the likelihood of a coalition government being successfully formed is a difficult task made near impossible by a Greek law which prohibits opinion polls being published close to election day.
The consensus seems to be that the election is too close to call and that a round of horse-trading will be required before a government can be formed. Coalition negotiations broke down after the last election, hence this Sunday's re-run, but this time round there seems to be an acknowledgement that compromises must be made to ensure Greece has a hand at the tiller as soon as possible.
Meanwhile, the G20 countries meet in Mexico over the week-end and European finance ministers are scheduled to meet on Monday and Tuesday ahead of the full quarterly summit meeting of European Union heads of state and government on June 28th and 29th.
"Will these meetings prove the point at which a growth compact to complement the fiscal compact take wing?" asks Jeremy Batstone-Carr, Director of Private Client Research and Investment Strategy at Charles Stanley.
"Investors are sceptical but something must be done or it will soon be too late," Batstone-Carr suggests.
UK inflation data for May is out on Tuesday, and there is likely to be encouraging news on the Core Consumer Price Index (CPI) annual inflation rate, which is tipped to narrow to 2.2% from 2.9% in April.
The regular CPI is seen rising 0.2% in May after April's 0.6% increase, leaving the annual advance unchanged at 3.0%. The Retail Price Index (RPI) is also forecast to rise by 0.2% in May, having jumped 0.7% in April. RPI inflation is expected to decline slightly to 3.3% from 3.5%.
On Wednesday, the US Federal Open Market Committee announces its interest rate decision and, unless the US central bank is going to start paying US banks to borrow money from it, the Fed has little option but to leave its rates unchanged.
On the same day the Bank of England releases the minutes from the June meeting of its policy-making team, the Monetary Policy Committee. If April's verdict on whether to unleash more quantitative easing was finely balanced then May's is likely to have seen even more lively debate about whether to loosen fiscal policy some more.
April brought yet more bad news in the form of construction output, which showed a 13.3% month-on-month drop and an 8.5% year-on-year drop. The quarter-on-quarter fall in construction output in the first quarter was also revised down to -4.9% from -4.8%. Industrial and manufacturing production figures were grim, and Friday's trade figures suggest that hopes of an export-led recovery for the UK economy are pie - or pasty - in the sky.
On the corporate front there are no blockbusting company results expected but updates from a number of companies going through "interesting times", as the old Chinese proverb has it, are expected.
Included among them are: defence group Chemring, which has seen its share price halve in the last year; Argos owner Home Retail, which recently scrapped its divi; Kesa Electricals, now free of its Comet chain, which it sold for two quid (plus, presumably, an extended warrant); and business software firm Micro Focus, which said last month that its earnings for the year just ended will be at the top end of expectations.
On Tuesday Whitbread holds its annual general meeting, and is likely to give shareholders an update on trading in its first quarter.
With UK revenue per available room (revPAR) growth in the UK still subdued, Credit Suisse is not expecting the update to lead to earnings forecast upgrades for Whitbread.
RevPAR in Whitbread's fourth quarter was down year-on-year by 1% but the Swiss bank thinks that in the March to May quarter it will turn positive by a similar amount.
For the group's Costa Coffee chain, Credit Suisse has pencilled in like-for-like (LFL) sales growth of 4.0%, down from +5.2% in the preceding quarter.
The pubs & restaurants division is seen achieving LFL growth of 1.5%, little changed from the fourth quarter, "but the issue remains the recovery of cost inflation given growth has been volume not price driven," Credit Suisse says.
The Swiss outfit's current estimates assume margins will fall by one percentage point in fiscal 2013.
"It seems unlikely consensus numbers will change after the Q1 [first quarter] update and we see greater upgrade potential elsewhere in the sector," Credit Suisse said, citing sector peers Accor and InterContinental Hotels Group as better picks.
Click here for the week's announcements
BOOK OF THE WEEK By Simon Lack
A book review by Luka Lukic of t1ps.com Hedge funds have always been the talk of the town. Every year we read about the billions paid to top 10 hedge fund managers and investors rush to give their money to them in the hopes of exceptional return. However, in this brutally honest book, industry insider Simon Lack looks to strip away the facade and reveal the cold truth about the profits hedge funds actually make. In the first sentence of the book he writes: "If all the money that's ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good." A staggering statement which leads us to question why they have been placed on a pedestal.
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ALTERNATIVE BET OF THE WEEK
Your local betting shop may be great for the footie, but you must go online for the truly weird bets.
This week: Will there be a nationwide referendum on leaving the EU entirely before the next general election?
Singles Only. Applies to whether or not a referendum takes place before the next general election.
Regards,
ShareCrazy
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