Enterprising Investor Forum

It looks like we are very close to the moment of truth, with the following 2 weeks being extremely critical to give us an idea of how the rest of the year will shape up and if indeed, we have just witnessed a massive bear market rally.

Despite the fact that expectations for earnings are so low that it may be difficult for companies not to beat them, the outlooks they will provide, coupled with economic data such as unemployment, home sales, etc… will highlight the real current situation and how realistic hopes for a fast recovery are.

Once we have a clear picture of the above and notwithstanding the fact that markets will remain choppy, investors will be in a much better position to make informed decisions on what framework to use for their investments and how to concretely structure their portfolios.

Make sure you’re ready!

Former Texas billionaire and cricket promoter Sir Allen Stanford has appeared in a US court charged over a multi-billion-dollar scheme to defraud investors… sadly enough, after Madoff & Co. people are simply not that shocked anymore (unless you had invested with him!).

Is this it or are there more surprises to come, more ponzy schemes and more fraud? What will be interesting to follow in this specific case, is that Stanford has repeatedly claimed that he knows nothing of this alleged ponzy scheme and that he will fight the charges with all he’s got! We shall see, but we find it hard to believe that he’ll manage to get out of this one…

It looks like they are making some progress but it still feels like this is moving along very slowly…

So it looks like The Treasury has given the green light for 10 banks to repay their TARP capital and therefore will be receiving 68bn back in repayments -> let’s hope that this is the ultimate sign that these banks are getting back on track, as we do not want to even try and imagine what would happen if they need to borrow some of the money back…

So should we focus on the fact that The Treasury has netted a couple of billion and that things are OK or should we still be worried that these banks have broken free from government control before all measures and reforms have been taken to avoid future problems and a repeat of the crisis?

There is a real possibility that these 10 banks will go back to business as usual whilst the others will continue to struggle and find it harder to get back on their feet, now that it is ‘official’ that they are the weaker players…

It really feels like there will be more surprises before we actually see the light at the end of the tunnel!

The initial battle has been lost but this is an interesting piece on how Bill Ackman tackled this issue and his views on the company, corporate governance and the road ahead for Target:

This is just the first part, you can click on the YouTube side bar to see the other segments.

Enjoy!

It seems that some people are taking this a bit too seriously….

Is the bull back or is this still a bear market rally?

We are still very skeptical about the recent rally and continue to feel that the market is extremely overbought. Does this mean that it can’t continue to go up? Not at all, there is no limit… the market can stay irrational longer than you can stay solvent!

Apart from the fact that stocks have continued to rise despite company earnings and economic data which is far from spectacular, the big fund managers have started to get really worried about having to go back to their clients reporting that they were on the sidelines and have also started to enter… no one wanting to miss the party but could we be setting ourselves up for a big fall once we run out of steam?

Despite what the government and media is trying to tell us, business sentiment is not really improving, companies are not hiring and banks are certainly not lending. Ask around… see what business owners have to say or people with good credit rating trying to get a loan.

We’ll just have to wait and see how this plays out…

As everyone seems to be desperatly trying to find and contain pockets of swine flu around the world and prevent a pandemic / subsequent public panic, markets signal a lower open and a lot of nervousness…

Whilst market commentators are busy discussing what impact this will have on individual travel or commodity stocks…. the question we would like to raise is : “Are the markets really reacting to this specific news or would any excuse be good enough to highlight the fact that the recent bear market rally has run out of gas?”

We will soon find out..

Despite politicians trying to get us to buy the fact that banks are lending, most market participants are confirming that this is simply not true!

Not only are they not lending to retail customers or corporation but they are still not lending to each other at anything like a normal rate of interest …

As Mr. Trump so kindly put it: “The banks are not lending money. There’s no money out there, no matter how strong you are, no matter how good your deal is, if you go to a bank today they virtually laugh at you if you’re asking for money.”

Sad but true…