http://www.ft.com/intl/cms/s/0/dcfb5cb2 ... z439PsDelk

It's clearly not too bullish, the smell that comes off the herd is bullshit!

Grant's view March 14

http://static.ow.ly/docs/g32n05b-gdmt_40OG.pdf

Thanks! They're like a seventies m&a outfit, except not as good...

Anyone any suggestions as to what to invest a pension fund in at present?

Market is up about 10% from the lows of 2 months ago, a shame because things were starting to get interesting and I was finding some bargains. As a whole, I would be waiting for another dip, however I am seeing small pockets of value. I have been buying some small oil/gas services companies with strong balance sheets. I have also been buying a few of the global banks, which are trading close to 52 week lows. Right now, my pick of the bunch would be Barclays at £1.52.

It's the cheapest of all the major UK banks because the market doesn't believe in their latest turnaround plan. I've been lucky enough to meet the CEO, and I actually think the market is wrong. The big problem at Barclays is that old management seemed to think the best strategy was to grow the company by building assets. New management has recognised this and done away with that strategy. They are now focused on the core business while cutting out the loss making trash. There's still 2 years to go, but by that time, they'll no longer have crappy non-core parts of company dragging on profit.

Also worth taking a look at Bank of America, in a very similar situation (a turnaround bank which is mostly retail, but has an investment bank attached).

My two cents, do your own research, etc.

Touche Daniel! alternatively, if it was attractive at $60 it must be doubly attractive at $30!

I've had no time yet to look into Valeant's accounts but I have been burned by association - the entire specialty area is down - equities down 40%+ LTM, 15% to 50% YTD (HZNP, ENDP, MNK, AGN), B/BB unsecured yields up 4% to 6% in some cases.

I think risk are now asking PM's if they actually understand the businesses and where reported growth is coming from. The answer to that is a resounding NO in most cases. Accounts are too opaque, reported "growth" is too bullshitty, GAAP EPS bears no resemblance to Non-GAAP EPS and "core" or "organic" definitions change each quarter. Given the wholesale exit from the sector, there may be lots of value.

i like prudential the best of all the british financials , bought it a few months ago when it was a good bit cheaper

Just a follow up on oil companies in case anyone has followed. I owned Chevron, I sold it. I thought there would be more trouble and that the price would go down from about $80 and present an even better buying opportunity. Instead it went up 20% - almost like the market thinks that we're back to $70 oil already. This is scary for Chevron (and indeed a lot of other big oil companies) as many of these companies are only maintaining the dividend by issuing debt (see below cash flow statement).



It's interesting to speculate on what's driving all this? From what I can see, low interest rates have driven a lot of investment into dividend paying stocks. It seems to me like there is an awful lot of dumb money (eg http://www.suredividend.com/cvx-dividend-aristocrats/) that is chasing companies like Chevron for income (referred to as dividend aristocrats because the dividend always goes up). Because the share price is being supported by people relying on the dividend, this pushes management to maintain it at all costs, even if it forces them to do stupid things like borrow the money to maintain it. If oil can go back to $70 in the next quarter, the crisis is averted for big oil. If it remains below, then I can only see the dividend being cut with a big shake-out as income investors flee.

XOM not the safest oil play?
Think the divi is about 3.2% and very sustainable?

Safer for now, but definitely not sustainable at $40 oil. I suspect that in Q1 this year, even Exxon will be free cash flow negative and be forced to borrow or sell assets to cover the dividend. I really don't like the anti-cyclical behaviour by the big oil companies. Instead of focusing on short-term results (buying back shares, selling assets, paying out dividends) in order to juice the numbers, they should really be out there buying up the assets of bankrupted competitors at firesale prices.

if XOM goes free cash flow negative then the sector is in massive trouble....
think XOM is AAA rated

XOM goes free cash flow negative for the quarter and has now lost its AAA rating.

The dividend sheep don't seem to mind the awful numbers though, stock has barely budged.

Good article here on the woes in the O&G industry.

http://www.bloomberg.com/gadfly/article ... -weakening

http://thesovereigninvestor.com/exclusi ... e-in-2016/

Several noted economists and distinguished investors are warning of a stock market crash.

Billionaire Carl Icahn, for example, recently raised a red flag on a national broadcast when he declared, “The public is walking into a trap again as they did in 2007.”

And the prophetic economist Andrew Smithers warns, “U.S. stocks are now about 80% overvalued.”

Icahn's a bit of a tit though.... wouldn't pay him much heed. Things definitely slowing down in the States though, so I would be cautious.