Like to spread bet? Can you beat these?

I came across this article the other day which looked at some of the greatest and biggest spread bets in history. Some are funny, but for those going £1 a point there is some food for thought here.  Big bets win, but they can get you in the poor house as well, but here are some winners.  Some more by luck than judgement it would seem.

Here's a selection;

Facebook

Then there’s the one about the whale who shorted Facebook when it made its underwhelming New York debut in May. The big-hitter bet the stock would fall on May 21. The shares slumped $4, meaning that as our man had piled in for more than $8000 a point, he walked off with a profit of almost $3 million.

The bet was so huge, said one insider, that when the spread betting firm went to lay off the massive exposure, its broker insisted that the bet had to be closed that day. It duly was. In that one session, our anonymous big-hitter made returns of more than $400,000 an hour. Not bad for a day’s work.

Market indices 20/50 dma - FTSE100 under pressure - update 26

A quick update on the FTSE100.  Today's downward move is putting the lower trend line placed on the chart under pressure, MACD indicator also looks like it is heading down. The 50 day moving average is 5761 and we have just gone below that. We have reached one of those moments where it is time to look for support points below and see if they hold. A breach of 5600 could see the current trend which began back in June coming to an end. Those interested in the long side need to be careful of taking any new positions while the current down move is playing out.

Chart:

The FTSE game of relegation and promotion

Today the FTSE100, 250 and smaller companies index have a slightly different look about them because of the quarterly promotion/relegation battle that goes on which can see each index change over time.  Without going into the calculation that determines who gets promoted and relegated, these changes should be noted and if necessary acted upon by investors and traders.

For long term buy and hold investors it can be a big negative if the company that you hold gets relegated. Usually, the relegation is known well in advance, so it is possible to act before the change actually happens.  Whether you act will depend on how you see the prospects for the company going forward.  A few quarters back hedge fund manager Man Group was one of those relegated from the FTSE100 to the 250 index and since then its share price has continued to fall.  It had been in freefall for some time prior to its relegation, so the writing had been on the wall that the company was facing difficulties.

On the other hand, if you hold a company that is promoted often the share price will rise as the bigger buyers come in to add to their positions.  This probably is more the case with smaller companies promoted to the FTSE250, but also companies promoted to the FTSE100 might see some price rise as FTSE 100 funds will look to buy.

So, what changed today?

Market indices 20/50 dma - UK and Dax - update 25

It's been a quiet week on the markets which can often be a signal that something is going to happen one way or another fairly soon.  Consolidation or quiet periods are often resolved by a breakout, just a question of up or down. Right now the simple 20/50 dma upward momentum is still there and as mentioned a while back in this series of updates, once that crossover happens it can go on for some time.  The current move is a good example of how despite all the volatile bad news that may well have shaken some out and given bears hope, this upward trend has remained  fairly solid. Crash calls have come and gone as they always seem to. This trend will end at some stage, but we are now heading into a period which traditionally is good for stock markets, has this trend got the legs to take us into the usual santa rally and new year? It's a stretch, but we could still get a pullback like previous ones seen on these charts, but the trend stays intact as long as the 50 dma is not pressured for any length of time.

FTSE250

Will Sportingbet finally get a takeover bid?

For some time there has been talk that Sportingbet would be a takeover target for one of the bigger players in the bookmaking industry.  Ladbrokes pulled out of one potential bid a while back and ever since then the share price of Sportingbet had been somewhat depressed, but it had its supporters who felt that it was cheap and undervalued regardless of any potential takeover. However, the price has been flying recently and yesterday confirmation came that William Hill was in the early stages of launching a potential bid with GVC Holdings.

Any offer would be substantially in cash with an element of GVC paper. William Hill intends that the entity initially acquiring the Regulated Businesses would be a subsidiary of William Hill and not William Hill Online. GVC and William Hill reserve the right to amend the terms and structure of the possible offer in due course.

The Boards of William Hill and GVC believe that by acting in combination they represent a highly credible possible offeror for the entire Sportingbet business, substantially in cash.

No formal approach has been made to the Board of Sportingbet and there can be no certainty that any offer will be forthcoming and nor as to the terms on which any offer might be made.

In accordance with Rule 2.6(a) of the Code, William Hill and GVC must, by not later than 5.00 p.m. on 16 October 2012, either announce a firm intention to make an offer for Sportingbet in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer

http://www.digitallook.com/news/rns/20373524-14283/WMH-Response_to_recent_share_price_movement_html

There is likely to be much speculation and talk about what any bid price might be, but already there are predictions which make it substantially more than the current price of around 54p.

William Hill and GVC would not comment on the possible value of a bid but Ivor Jones, gaming analyst at Numis, suggested any potential buyer would have to pay as much as £1 a share.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9554300/William-Hill-considers-joint-offer-for-Sportingbet.html

To some degree Sportingbet has been here before with the Ladbrokes takeover talk that saw the price rise then fall a long way when the bid collapsed.

Traders' magazine, trader Interviews issue

A while back I posted about free online trading/investment magazines, the original can be found here.

Traders' magazine was one of those included and the latest edition is an interview special with 10 popular traders speaking about their strategies – including Scott Redler (proprietary trading, T3 Group), Larry Pesavento (more than 50 years trading experience, pattern trading), Peter Milman (Hedge Fund-Startup, proprietary trading before that) Tim Bourquin (TraderInterviews website and swing trader) and Harry Boxer (Swing and day trading) to name 5. I've read a few of the interviews and it's worth getting especially as it won't cost you anything.

You might have to sign up to the site, the link and full list of free magazines can be found here.

Video market round up for week ending 14th September

A week ending round up of the markets from Steve Briggs YouTube channel.

This week also includes a look at the general retailers sector and Marks & Spencer, Next and Debenhams.

More videos can be found at Steve's YouTube site http://www.youtube.com/user/sjb5555.

Market indices 20/50 dma - QE3 and beyond - update 24

Well, the Fed did more or less what was expected of it by the markets yesterday and it looks like the market is finally beginning to believe that the central banks will act and deliver what they want to hear. Whether what they are delivering will be successful is still to be determined, but it's clear the markets would rather have stimulus than no stimulus and inflation rather than deflation.

We can see by the market action today that risk is back.  Under-performing shares in the more risky sectors like mining have been on a roll today, while more defensive stocks have either failed to join the QE3 party or even fallen, Vodafone mentioned here yesterday being one of the few out of favour stocks.  On the other hand, FTSE miners have been partying like its 2007.  

Here are the top 20 FTSE100 and 250 winners for today;

Vodafone and the Verizon dividend mystery

The Vodafone share price has been in a bit of a slump recently, nothing dramatic but a few fears have crept in as to whether this FTSE100 behemoth can maintain its current growth, certain negatives coming out of Europe suggesting that it might be heading for tougher times.  Vodafone offers a pretty good dividend yield currently around 5.5% but could rise to 7.5% next year.  This does not include the special dividends that shareholders have been getting courtesy of its 45% stake in US based Verizon Communications. However, in the last week or so the share price has fallen in part because of a fear that Vodafone will not get a dividend from Verizon this year.  It appears there is nothing substantial or factual to support this, just one of those stock market rumours that tend to emerge and effect a share price from time to time.

Rookie Trader video series

Below is a short video from a series called Rookie Trader, which while basic does give some useful information. Naked Trader Robbie Burns does one of his rare interviews and talks about how to be successful at trading you have to be like Mr Spock of Star Trek.

IG Group, a company that needs volatility?

IG Group has become one of the most successful spread betting companies in the UK, a market leader that sits in the FTSE250.  It hasn't got there by being an overvalued or ramped up growth company either, it has an undemanding P/E of 11.4 and offers a dividend yield of around 5.2%.  The share price has recently been in a slump, finding support at around the 420p level on the daily chart, but struggling once it gets to around the 460/70p level.  The 52 week high is just over the 500p level, but unlike other FTSE250 stocks that often steam away once past a resistance level, IG Group tends to fall off again, no doubt frustrating long term investors in the company.

There is something interesting about the company that is worth noting for anyone interested in buying it, especially long term buy and hold investors.  It seems to do better when there is volatility in the markets that its clients trade, when the markets are quiet, performance is affected.  This now seems to be a common theme with IG Group, which poses the question what will happen to the shares if the markets ever get back to some sort of normality?  A normality where there isn't the type of extreme volatility in market movements that have become the norm since 2007/8.  It would appear that spread betting traders like this volatility, even though most of them probably tend to lose because of it.

Video market round up for week ending 7th September

A week ending round up of the markets from Steve Briggs YouTube channel.

A brief look at the major indices and the FTSE tobacco sector, followed by a video from CMC Markets that looks at seasonality and events to come as we get towards the end of the year.

More videos can be found at http://www.youtube.com/user/sjb5555.

Market indices 20/50 dma - UK, Dax, US - update 23

So, the ECB's Draghi delivered what the market wanted to hear, at the very least a verbal bazooka that will still need action to follow.  Can't help but think that we have been here before, there will still need to be concerted action by various Government's, all of which have to take into account the little matter of getting re-elected at some stage.

Bankers don't need to worry about getting elected, they just concern themselves with getting caught out. Still, there is an old saying in the US that you shouldn't take on the Fed, that probably applies to other Central Banks as well.  They have the ammunition, well, a printing press, to do the job and the nature of the inflationary money system is to always put things off into the future.  It's no good arguing that they are simply kicking the can down the road to an eventual destructive end game, because the road itself isn't a dead end, like an motorway/autobahn/highway (take your pick) it goes on endlessly. Still, the markets seem to like this inflationary money, as long as most of it heads their way. The potential downside, which no doubt the market will also complain about and want an immediate response to when it happens, can be put off into the future. 

As to the charts, all those potential breaches of the 20 and 50 dma that looked on the cards in the last update, are now looking reasonably bullish again, as you might expect after yesterday's big moves.  The 20 dma on a couple of charts touched and then bounced up again.  The FTSE100 was under the most pressure and still looks the weakest, but could be braced for a new push towards 5800 and 6000 again.  

Public Sector Portfolio Watch - Update 3 - May Gurney profit warning

Been a while since looking at those companies that rely heavily on public sector spending.  AIM company May Gurney came out with a profit warning this morning that so far today has sent the shares down around 44%.  This tells us a couple of things about how quickly the share price of some companies can fall very quickly.  First, it relies heavily on one source of income, around 60% from the public sector.  Second, as a smaller company the share price volatility can often hit hard and fast on the downside, many small investors in this company probably don't even know that the share price has fallen today. They will get a shock when they return home from work and check this evening and probably wonder what has happened. Some buy and hold fundamental investors in this share who rarely check their portfolio might not find out for weeks.

Key words in company reports, still effective indicators?

In his book The Naked Trader, how anyone can make money trading shares, Robbie Burns highlights the secret Naked Trader traffic light system using a tool available on the financial site ADVFN.  In brief what this does is to look for key words in company news, statements, reports, announcements, etc with the intention of looking for positives and negatives.  This can then be used to find companies to both go long when positive and short when it is negative.  NT has apparently used it over the years to great success and using such words when searching for trading and investing opportunities is a useful weapon for all investors and traders to take note of and make use of. 

Ashtead Group, today's FTSE250 flyer

FTSE250 Ashtead Group is one of those companies that is worth following if only because its business is essentially a reflection of what is happening in the wider economy, both in the UK and elsewhere.

It describes itself thus;

Ashtead Group is a leading provider of rental equipment with operations in the US and the UK. We provide equipment that lifts, powers, generates, moves, digs, supports, scrubs, pumps, directs, ventilates, whatever the job needs. We rent equipment so that our customers can focus on what they do best rather than maintaining and servicing equipment they may use only once a year.

http://www.ashtead-group.com/

I suppose that it is possible that it might actually do better during bad times rather than when the economy is booming as companies decide to put off purchasing equipment and instead decide to hire it.  On the other hand, being one of the biggest plant hire firms in the UK and the US, it is in a prime position to be a go to company at any time, in both good and bad economic times.

Video market round up for week ending 31st August

A week ending round up of the markets from Steve Briggs YouTube channel.

This week's video also takes a look at FTSE100 mining company Eurasian Natural Resources. Is it going to £2.00? Currently around £3.00 and a long way off its highs, back in 2008 this one reached the dizzy heights of around £14.00. Perhaps there is a lesson here of what volatility and big downtrends can really mean and why the longer time frames should be used and respected for investment and trading decisions.  

More videos can be found at http://www.youtube.com/user/sjb5555. Well worth having a look.

Monitise - Full Year Results 04/09 - update 2

AIM company Monitise, previously mentioned here and here are due to announce their final year trading figures in an update tomorrow.  Given the numbers in the recent trading update, the market is probably not expecting any surprises, at least on the downside, when the final figures come in.  As can often happen with smaller companies a good statement can see the share price rise rapidly while a bad one can see it quickly go the other way.

Smaller companies sometimes have the habit of disappointing often at the last minute, there's no reason to believe that will happen with Monitise, most of the news flow has been fairly positive recently. It will be interesting to see if they have anything new to say, additional contract wins, ahead of expectations, etc.

So far Monitise hasn't made a profit, we may well find out more tomorrow as to when that might be.  

Market indices 20/50 dma - UK, Eurostoxx, US - update 22

We start the week with a little sign of weakness beginning to creep in on a number of indices. The 20dma is under pressure on the FTSE100, Eurostoxx and Dow and both the 20 and 50 dma look like they are leveling off slightly, although the general trend is still up. However, this is a simple analysis and given the delay in confirmation that one tends to get from a 20/50 dma crossover, it is important to be looking at other indicators, chart patterns, support and resistance for signs of strength or weakness in the price action. By the time any 20/50 dma crossover has happened to the downside, if and when it does happen, the chances are that the market will have been in a general downtrend for a few weeks before these dma's catch it.