Good morning!

Unusual market conditions continue. I did a lot of reading over the weekend, and if you're not careful, you can end up frightening yourself into selling everything!

I saw an interesting graph, showing that earnings expectations for US large caps have been steadily trending down in the last quarter, from approx. 5% up, to now slightly down. Combine that with China, a dramatic fall in world trade (the Baltic Dry Index is now at an all-time low apparently), distress in the Junk Bonds market (and possible contagion?), the collapse in oil price, and there are plenty of fundamental reasons to be worried.

Therefore I'm not dismissing this market sell-off as just another dip. I reckon "buy the dip" may not work this time, but who can say? If the US economic data turns positive again, later this year, then markets could well get back on track.

Most of my small caps are UK-centric, and focussed on consumer demand, so that should be relatively safe, for now anyway. Also, historically a low oil price has stimulated the global economy, so this might just be a passing soft patch. That's my general feeling right now, but I'll be watching closely for signs of anything more serious happening.


Last call for Mello Beckenham tonight. There are 2 very interesting companies presenting, so well worth attending, namely IQE (LON:IQE) and Flowtech Fluidpower (LON:FLO) .

Brady (LON:BRY)

Share price: 58.5p
No. shares: 83.0m
Market cap: £48.6m

(at the time of writing, I hold a long position in this share)

Trading update - for the full year 2015. The background here is that the company said everything was fine on 7 Sep 2015, but then served up a profit warning on 1 Dec 2015, sending the shares down heavily to just 37p. I blasted the company in my report that day.

However, to his credit, the CEO Gavin Lavelle faced the music, and answered investor questions in an interview with me on 21 Dec 2015 in audio form or transcript.

The key thing with a profit warning, is to get the bad news out, and in full. So far anyway, that seems to be the case here, with today's update steadying the ship (i.e. no more bad news);


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