Good morning! The panic market sell-off seems to have abated. Thinking back to the sequence of events over the last three weeks, it seems to me that the following were the main causes: sharp fall in the price of oil, pulling down oil-related stocks. More negative economic data. Nervousness about Ebola impacted transport stocks such as airlines, cruise ships, etc. The Shire deal falling through apparently triggered big margin calls with merger arbitrage hedge funds, which clearly snowballed into a bigger sell-off as leveraged positions were shaken out of the market. Confidence then returned as buyers decided the worst was over. That all relates mainly to the US market, which always seems to drive what happens here too.

As for small caps, it was just a worsening of a bear market that we've been suffering from since about Mar 2014. To my mind, we must be getting near to the stage where anyone who was likely to sell their small caps, would have done so by now, surely? That combined with some decent value that is starting to appear, makes me feel considerably more optimistic than I was before this sell-off. The market was overheated, and needed to correct, and it has done.

The other thing is that markets are meant to go up & down, especially in small caps. Illiquidity in many small caps means that we have to endure stomach-churning volatility sometimes - that's just the price we have to pay for being in the asset class that usually performs best in the long run. Gearing is the killer. Providing you don't have any gearing, then you can ride out any market volatility. Good stocks with sound finances will always come back up again eventually, and if they pay a good divi too, then waiting is no hardship.

McBride (LON:MCB)

Share price: 83.6p
No. shares: 182.2m
Market Cap: £152.3m

Trading update - when this maker of household & personal care products puts out an update, it's usually a profit warning. However, today the company sounds more upbeat, saying;

The trading performance of the Group has been in line with the Board's expectations.  The Group has made a solid start to the year, with Group revenue at constant currency returning to modest growth.

Cost-cutting seems to be underway, which makes sense given that its margins are being squeezed by customers;

The UK business restructuring project, announced in…

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