New role of Gold

Strange things are happening with gold...

Once upon a time, when there is any increase in uncertainty, or there is unsettling events (political, military or massive natural disaster), the price of gold will jump.

However, lately, it seems to be the reverse!  Trade may stabilize across the border between the USA and Mexico and the price of gold went up a few dollars!  No one seems to have a logical explanation but I am not complaining.  I have only retained mostly gold producers rather than explorers or those needing huge capital in future to develop.

Illogical SPI future...

US stocks climbed on Friday.  And the Europeans too.  And the Japanese.  ASX is often regarded as resource-based and of late, a political turmoil.  However, the new PM is business-friendly, the price of oil has gone up, gold has jumped off its low and commodity prices are recovering although it has fallen a little overnight.

How do those idiots determine that the SPI Future Index is in the negative territory at -1?  Fascinating but illogical.  I am expecting a nice charge for my energy and gold stocks.  Those tech stocks (WTC, XRO, Z1P, APT, NWL, NXT, HUB, TNE) might retreat after a metoric rise.

Z1P

There are differences between Z1P and APT but both operate nearly the same way.  And both have been doing well with turnover rising rapidly.  Z1P is much smaller.  So when APT is rocketing away, then the best tech to buy at the moment is Z1P when it hasn't been very recently.  I have been topping up 3 times in the last 2 days...

WTC

Many years ago I read about Warren Buffett's strategy. I soon realize that an ordinary soul cannot emulate him. His research is too thorough (beyond the capability and resource of an average investor). AND he does not just buy shares; he buys the control of the add-ons or has a big say in the management.

In recent time, I bought a company that buys other small companies to fit into its logistic business... and the management comes along! This sounds even better!

Yesterday, it had a massive lift in its share price (up 28%), vindicating my most recent top ups when the market didn't like its high PE ratio.  Well, when its announcements have been good and its business model is successful, that is reason why the PE ratio is in stratosphere.  The best time to top up is when the others are dumping in the presence of good news.

Old adage in a new sector...

This is an old comment. My late father went to school for only 2 years because of abject poverty during the long Chinese civil war in the early 20th Century. However, he had generated some very basic advice for investment.

If a business is doing well for many years and increasing its sales, it is worth investing in. I think even if he was an illiterate, he would have made the same investment strategy! Due to a recent change in which sector I invest in, I am collecting very nice alpha today. WTC had a massive jump because of good earning figures. While it cannot make projection, the trend and reading in between the lines, it is expected to make bigger earnings. Meanwhile APT, Z1P, NWL, NXT and XRO also give me nice alpha today.

Because of instability in the Australian political scene, the market is faring badly. This is lemmings following sentiment rather than logic. Hence, it is a great time to top up!