Good morning! It's quiet for results & trading statements today, but all eyes will be nervously looking at whether the current sell-off continues or not? Small caps are being hit the hardest, both with the Russell 2000 Index in the USA, and here in the UK with AIM once again hitting a fresh low for the year yesterday.

My view remains the same - market corrections happen from time to time, and providing you take a long term view of decent companies with sound finances, paying good dividends, and at reasonable valuations, then there's really nothing to worry about - short term share price movements are just background noise. The only exception to that is when the economy really is going into Recession, e.g. in 2007-8, when people who sold early would have protected their capital in the short term. Although in my experience nervous sellers rarely have the courage to buy back in anywhere near the market lows, so they might miss a big downturn, but they will also usually miss the big recovery too.

Anyway, we'll see what happens. I've kept a bit of powder dry, and am already seeing one or two companies on my watch list starting to look interesting in valuation terms.


John Lewis partnership

Although a partnership, not stock market listed, the department store and Waitrose group announces weekly sales figures. These show a strong improvement for clothing, after a soft patch caused by mild weather in Sept. That should have read-across for other clothing retailers. In my view the market gave us a buying opportunity in several clothing retailers which saw steep share price falls over what is just a temporary factor - mild weather. As the old saying goes, the only weather that matters is whether you have the right stock in the right place at the right time!


Mothercare (LON:MTC)

Share price: 169p (down 57p today)
No. shares: 88.8m existing + 79.9m new Rights Issue (9 new for 10 old) shares = 168.7m
Market Cap: £285.1m

Rights Issue - Mothercare announces this morning that its nil paid Rights will today be given their own listing. This is normal in a Rights Issue, in that shareholders who are allocated Rights can sell them in the market  nil paid for a certain amount of time (about a week or two usually I think), or keep them and subscribe for some or…

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