Good morning!
Greece
Well, what an interesting 24 hours, what with the Greece Euro crisis finally coming to a head. I find that Twitter is the best source of breaking news, if you follow the right people. I was glued to Twitter last night, trying to assess whether the stock market here was likely to go into full-blown panic mode this morning, or not.
As it's turned out, the markets are recovering well from the overnight plunge, which makes sense really - if anything, a conclusion to the Greek crisis could be cathartic for equity markets, removing a major source of uncertainty. How it all pans out, who knows, but I've seen stats which show that not much of the Greek debt is held by the private sector, so default if/when it comes may not even have that much of an impact? Although I am a bit worried about the ripple effect of derivatives, and possible contagion to other Eurozone countries.
There again, the banks have had 7 years to plan for the inevitable Greek default, so any bank that can't cope now doesn't deserve to remain in existence anyway.
China
The plunging stock market in China doesn't concern me, as it's a largely self-contained bubble, from what I can make out. Its gyrations won't affect the valuation of my small cap investments, so I'm not concerned about this factor either. The key thing to remember with China, is that it's not capitalism. It's a command economy (or a strange hybrid anyway), so the Govt can pull levers whenever required, to achieve policy aims.
In the long run though, with company and Bank balance sheets filling up with bad debts, there will have to be a gigantic flushing out of the system. When that will happen, who knows? It may not even be in my lifetime, so why worry about it?
ShareSoc Masterclass/Garden Party
Sounds like this event, hosted by Killiks, in their wonderful Mayfair office, will be excellent. It's this week - on Thu 2 July. Full details are here. There is a special offer for Stockopedia readers - click here.
The panelists for the discussion part of the evening are star small caps investors - David Stredder, Lord Lee, and Leon Boros (all three are self-made millionaires from small cap investing), plus Mick Gilligan (Partner and Head of Fund Research at Killik).
My view is that the best people to learn from…
