What goes down, should go up.

This week saw an amazing return to greatness in the worldwide indices amid some initially choppy Q2 earnings. 

After initial weakness on Tuesday which saw the Dow Jones test the 10,000 point range, the index rose over 4% this week to finish in the 10,400's. 

The equities were not the only things rising. Currencies also experienced a reallocation - seeing the GBP, USD and the AUD strengthen significantly over the week.

What's Up Jono? www.whatsupjono.com 

crash boom bang

Seldom do I have a bout of abandoned glee when the stockmarket nosedives... except when I can say ' I told you '.

My short picks Google and AIG were smashed as the stockmarket took a battering of just under 2% on Friday.

AIG - even before earnings started weakly and got weaker as the day went on. Finishing down 4.65% after a woeful day of trading and news that it would settle $675M for a case in Ohio involving pension fund and accounting fraud

Google. I can't stay mad at you can I? Not with your big asset base and good cash position. However, after you cut short my ad revenue and made a few technical stuff-ups this week - as well as a Q2 earnings downgrade... the resultant slide on share price co-incidentally gives me glee... although I'm sure that the stockprice will start to rise again over the long run.

However, on Friday the stock lost 6.97% - doesn't look that big on the chart - but actually a huge loss for the day.

Let's see what happens next week. Rosy-eyed rebound? Or bleak and sharp shorting, next week will be interesting.

What's Up Jono? http://www.whatsupjono.com/ 

Bluechip Challenge Week 4 - Rebound

Here's the rebound.

This week sees the rebound of the Dow to above 10,300 points. 

Leading the rebound is ... ME! And Pierre! 

My big bet stocks , Citi, Amex and BP have all enjoyed positive returns vs the initial investment point, whilst Goldman and BP helped Pierre's portfolio significantly.

The largest Australian gainer was GPT which is up 3.4% from 4 weeks earlier.

It's neck and neck, but still way behind cash for this market. All is not saved yet - and there is either alot of money to be made, or a large loss for everyone looming.

What's Up Jono? www.whatsupjono.com Breaking News, Finance, Opinion, Charts, Trends.

Dear Google Ads - You're Fired!

Find an excerpt of an email that I was alarmed to receive today from my friends at Google.

Hello,

After reviewing our records, we've determined that your AdSense account
poses a risk of generating invalid activity. Because we have a
responsibility to protect our AdWords advertisers from inflated costs due
to invalid activity, we've found it necessary to disable your AdSense
account. Your outstanding balance and Google's share of the revenue will
both be fully refunded back to the affected advertisers.

Please understand that we need to take such steps to maintain the
effectiveness of Google's advertising system, particularly the
advertiser-publisher relationship. We understand the inconvenience that
this may cause you, and we thank you in advance for your understanding and
cooperation.
Google. I don't understand why this has happened. After my site has attracted 3000 hits and many clicks I also find it hard to believe that you are returning that funding back to your advertisers.

So you now get my exclusive eye under the microscope. 

Google shares last traded at $467 which is at Sep 2009 levels. On closer inspection the main source of income from operations appears only in one line - which is advertising revenue. It's easy to believe how this is the case where cases like mine above are in operation. It's virtually impossible for a customer to prove and in situations like mine - the cost of advertising is free.

The key risk for this share - is the increasing political and privacy threat that it provides. Already this year it has breached Chinese and Australian Law. The question of what is ethical should be a reflection and a true test of true value in these cases.

Does Google conduct itself with ethics? I'm not so sure now. I used to think so when my clicks were recording revenue. 

Despite the analyst buy recommendation on Wall Street - I am steering clear of Google in an age old Warren Buffett adage- I refuse to invest in what I don't understand. Google. I noticed that you have a value of almost 4bn in goodwill registered on your balance sheet. It ain't goodwill if your brand value is negative.

I've taken down Adsense from my account now - and definitely open for business for anyone looking to advertise! 

What's up Jono? www.whatsupjono.com Breaking News, Finance, Stocks, Charts, Opinion

NBA Millionaires

Here are the ten newest millionaires to the NBA

The scary thing is that I've never heard of these people before. Goes to show success comes from doing specialised very well!

Dow - here we go.

It feels like the last big hill on a rollercoaster ... the Dow has dipped and has momentum and ... who knows what's going to happen next. 

With key indicators and economic conditions improving - one needs to think that the Dow will rebound to 10,500. However, fundamental weakness in some key financial sector stocks may be holding the entire world back. 

Let's wait till to see! 

TED Spread

Check THIS ARTICLE  out.

I had to make some emails to find out what that all meant.

TED - The difference between the Eurodollar 3 month (LIBOR Futures) and the 3 months T-bond

When compared /regressed to the Russell 3000 - apparantly it shows some value in the Dow.

My answer? I'm a simple person, and I had no idea what this article was talking about. After talking to my mates, we also had no idea what this guy was on about either.

Flip a coin and do a regression on that perhaps? 

Best to be ignorant but at least I'm honest that I have no idea. 

This is what we like to see

The pound is nose-diving as the Aussie hits 85 cents to the USD

Keep your eyes peeled for weakness in the Euro Zone and the Pound

What's up Jono? www.whatsupjono.com Finance, Breaking News, Charts, Trends, Opinion

Week 3 results - not pretty to be invested

As upsetting as watching your team lose the World Cup, any budding investor has underperformed versus cash for the last 3 weeks. Indeed, as the Dow itself has fallen below 10,000 the result is not surprising and the question of a double dip recession or indeed a "third depression" (yep you heard it here a while ago didn't you.. a week to be exact) has taken hold.

In terms of the stock challenge, the surprise came with Vince - who was this weeks worst performer. A look at Vince's portfolio (which was diversified in Aus but heavily tech weighted in the US) paints a case in point. Diversification is so key. Looking at his US stocks Apple, Microsoft, RIM, Qualcomm and Costco the entire US portfolio lost over 5% during the week. By comparison his diversified Australian portfolio lost only 2% which is pretty good given the conditions. 

So which stocks are holding up well so far? Australian stocks Newcrest, Diamond Offshore drilling and General Property Trust are the three best performers of our challenge. These stocks have lost less than 3% in the last 3 weeks, where most of the stocks have lost over 10%. 

Got a Question? Keep them coming! Leave a comment below (no registration required)

What's Up Jono? www.whatsupjono.com  Finance, Breaking News, Charts, Trends, Opinion

Celebrating 10 Years of the GST

The GST (VAT) came into existence into Australia 10 years ago.

thanks to Michelle my friend from tax - I got my very own piece of edible GST history - from the Deloitte 10 years of 10 percent party.

Only accountants and tax agents would be singing "it's EOFYS" in the office as the clock struck June 30.

Kevin Rudd 2.0 / iJulia rebranding: the next failed Vegemite in the making?

Julia Guillard has recently announced a concession to the mining industry's "Super Profit" tax, recognising public furore over policy that crept up on Australia implemented by Kevin Rudd.

The Super Profit Mining tax - read our analysis implemented in May by Kevin Rudd was changed and received a slight rebrand.

The now "mineral rent tax " is essentially a resumption of normal business activities as the tax rate levied by the government on the projects remains at 29% for the foreseeable future. 

According to this article there were no further developments on deductibility of exploration. 

However there were changes to the accounting methodology in the following areas:

1) Deductability / recognition of depreciation. Going forward projects will be assessed in the year incurred rather than depreciated.

2) 7% rate of uplift used to derive PV of the projects

3) Use of lower of book or market value accounting 

4) 25% extraction allowance to be applied before the tax of a project - a concession to the miners

5) Miners under $50M turnover not subject to the tax

Sounds pretty good. It brings to mind a Q&A interview session with Joe Hockey (Opposition Treasurer) and Lindsay Tanner (Deputy Treasurer) where Labour was vehemently arguing the need for the tax. If we could change this policy on a knife edge - we'd better wait to see that it's implemented before we proceed to breathe a sigh of relief. Second draft looks better for the miners... but we're probably not at the end of this project yet...deduct that!

What's Up Jono www.whatsupjono.com Finance, Breaking News, Charts, Trends, Opinions

Pound the Aussie? or Aussie the Pound!

My mentor "Tripod" emailed me today alerting me to hedge the AUD vs the GBP. However, I could not bring myself to do it - because I thought this was too inherently risky. Here is an excerpt of our conversation.

Tripod's View:

Tripod was of the view that you had to take a strong position of the pound having had a look at the chart trend and the strengthening of the GBP.



In addition to this, the latest UK government change (decreased political risk) and the indication of a strengthening of the dollar.

My View:

I have an aversion to the UK economy at the moment. Maybe it's because of my impending trip there - and the fact I like to keep my expectations quietly low.

Taking a look at the FTSE - which I believe is a true proxy of performance at it's best, the following graph shows weakness



To me there is no technical resistance to speak of, and very little fundamental support to the UK economy.

What does that mean? It means that the weakness in the FX rate above to me is from weakness in the AUD.



The AUD looks quie stable at the .80-.85 range to me. Thus I'm really reluctant to touch the AUD GBP because I think it's probably on its way down.

The Conclusion:

A gentleman's bet between my mentor and myself. Loser takes the winner to coffee... all in the sake of learning!

Got a Question? Send it over! Leave a comment!

What's Up Jono www.whatsupjono.com Finance, Breaking News, Charts, Trends, Opinions

VAT UK

Goods and Services / VAT in the UK will rise from 17.5% this year to 20% at the start of 2011.

 

In a release on the HM revenue website, the move will occur on 4 January.

 

This will make an already expensive place - more expensive! Be sure to factor that into your travel budget people!