Looking Back.

Looking back over the last month we have seen the stock market plummet, surge upwards in record style only to go backwards again Today the market started lower but finished at 0.56% up overall.

The bloodshed has been mainly due to the sub prime fiasco and concerns that the US economy is in danger of going into recession.Though looking at the Australian economy here we are far from it.The US are cutting interest rates (0.5% last night) while we are looking at raising them very soon.Possibly as close as a week or two away.

The AFIC ( Australian Foundation Company)The company, which is also the largest of the listed investment companies associated with Goldman Sachs JBWere,are very hesitant to say which way our market is going to go either up or down.As are quite a few stock market “Gurus”are fairly reticent also.

Personally I think the stock market will commence to rise again reaching new heights around about May. Then be prepared for another downturn or a correction if you prefer.This will be a roller coaster ride as profit takers jump in from time to time causing share prices to recede a bit temporarily.

If you have seen the last few posts in “Changes in Substantial Shareholdings” you could not help but see that the Big Banks and other Investment companies are busy snapping up bargains in a literal feeding frenzy.They have only one thing in mind and that is “PROFIT!” Because that’s what they are business for, not for altruistic reasons.

So obviously they think the market will go up otherwise they would not be buying now.

It could pay you dividends if you take note of what they are buying into right now, for you can guarantee they have done their research properly before they bought in.

They won’t be going into very much speculative companies just yet as they are too busy getting good companies at bargain basement prices.They were also buying in when prices were still heading downwards.

Going by today’s news it looks like RIO are happy with what BHP are offering for the takeover.Takeovers have a way of stimulating the mining sector upwards as investors begin to speculate as to who might be the next takeover.( Keep an eye on OXR and ZFX.)

As to what this month will bring well we will have to wait and see.

For those of you who are curious as to what my next purchase is? A clue it is a ” Little Pearler!”

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