Good morning! The US political debt crisis seems to have been resolved for the time being, so that's good news, although markets correctly anticipated that a deal would happen. So my Put Options look as if they will be expiring worthless, but as they were purely a Hedge, I'm fine with that - they served their purpose, in enabling me to sleep at night when a major uncertainty overhung the market, and also meant that I was protected if the market had crashed. Although as a colleague pointed out to me, by the time you think about hedging a specific risk, it's too late, it's the things that you don't yet know about that move markets, which is a good point.
Overall, I remain of the view that many small to mid caps are looking pricey right now, although digging around I'm still finding bargains, and the beauty of small caps is that due to liquidity, there will always be the odd clumsy seller, who knocks a price sharply down. So if you're prepared (both in terms of having done your research, and being able to move fast in hitting the buy button when cheap stock becomes available) then there are still plenty of opportunities around. As mentioned yesterday, Spaceandpeople (LON:SAL) was a good example, where I was able to pick up more stock this week at what I think is an excellent price of 107p. That has locked in a growing dividend yield of over 4%, so it always pays to keep some powder dry for unexpected opportunities like that.
I'm also keeping some cash on the sidelines, and in my main account am roughly 70% invested, with no gearing. That seems to me a sensible level, given that we're probably in the late stages of a 5-year bull market. With things like the Royal Mail float happening, and other IPOs, I think we are also beginning to see a lot more interest in the Stock Market from the general public - which again is a classic sign of being not far from the end of a bull market.
Also, I'm finding that many people I talk to in the investing world are suddenly talking about "story stocks" these days - bragging about the multi-baggers they've had, even though the companies are often very poor quality, even insolvent on conventional bases, but nobody's…
