by Kris Sayce on November 13, 2008
This morning we were beaten to it by The Age newspaper. Damn the ruthless efficiency and timeliness of the printed press.
“$2 company has new meaning” reads the front page story. It tells us that 48 of the S&P/ASX200 companies are trading for less than $2. We did a similar check on the S&P/ASX100 index yesterday. Fifty-three of those companies are trading for less than $5.
Of course the actual dollar value of the share price is not always significant. The market capitalisation of the company is more relevant. But it’s certainly a far cry from the euphoria of last year. Remember when pundits were jumping up and down with excitement trying to pick which Australian share would be the first to break through the $100 barrier?
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by Kris Sayce on November 12, 2008
Here’s a headline to warm your cockles, “US car giants ‘laugh at Aussie suckers.’” The Australian newspaper tells us that “former managing director of Mitsubishi Australia Graham Spurling said the car companies would get a “free ride” from the Rudd Government on research and development.”
Obviously having a domestic manufacturing industry is important. And it is preferable that it is an Australian business so that investment and profits remain on shore. If that isn’t possible then the next best thing is for foreign businesses to invest in Australia. At least that way it creates jobs for the economy which means employees will spend their wages domestically.
The third option is that the manufacturing is done offshore and delivered to Australian distributors who then mark up the price for a profit so then again at least some of the profits remain on shore.
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by Kris Sayce on November 11, 2008
Australia bails out economy - Bad.
US bails out economy - Bad.
Europe bails out economy - Bad.
China bails out economy - Good.
Well, not quite. For a start, the AU$849 billion ’stimulus package’ proposed by the Chinese sounds like a lot of money. And it is. It is more than the US government is spending on its TARP initiative to bail out the credit market.
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by Kris Sayce on November 10, 2008
How are does $22 million go in the child care industry? Not far if the company involved is ABC Learning. Unfortunately, the company still hasn’t released its most recent financial results so we have to go back to the last statement released in December 2007.
For the year it had total expenses of $1,057,400,000. Those expenses helped the company to generate revenue of $1,106,900,000. After tax ABC Learning achieved a profit of $37 million. In other words a 3% profit margin.
So based on these numbers the company could eat through the government support money within about 10 days. In reality it won’t as we are sure it will still achieve some revenues of its own.
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by Kris Sayce on November 7, 2008
We have no idea who Giovanni Spagnolo is. We don’t know whether he is a professional trader, a small investor, a fund manager or anything else.
But what we do know is the Australian Securities & Investment Commission (ASIC) has taken him to court for short selling. To be more precise, for naked short selling. You see, what Mr Spagnolo did was sell shares that he did not own. Furthermore, he didn’t borrow the stock from anyone in order to deliver it on settlement. That is what makes it a naked short sell.
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