Small Cap Value Report (Fri 4 Oct 2024) - JDW, RBGP

4th Oct '24 by Paul Scott

134 comments 8187 reads

Good morning from Paul!

Very quiet for news today. I'll leave it there for today, and the week. Have a smashing weekend, and see you back here on Monday hopefully!

Weekly macro/markets summary -

Usually included in my podcast, I thought we could trial having a written version here, as it’s very quiet for company news today. If people like it, I can make this a regular feature.

These are the significant markets & macro points which I jotted down on my pad this week (necessarily not exhaustive) -

Escalation of Arab/Israeli conflict, after Iran fired c.200 missiles into Israel. Minimal casualties, but Israel/US reportedly considering retaliation on Iran’s oil and/or nuclear facilities. Said to be the cause for 5% rise (Thu alone) in spot crude oil price from recent low of $65, to c.$73 (as at Thursday evening). Bank of England Governor also mentioned the risk of oil prices soaring due to M.Eastern conflict. This again questions the wisdom of the UK pursuing net zero priorities, instead of national energy security (particularly gas).

Also this week Israel invaded Lebanon with ground forces, another major escalation, so we should be increasingly worried about geopolitical crises, including of course the continuing Russia:Ukraine war. What (if anything) should we do with our portfolios?

Key comments from Bank of England Governor in a Guardian interview indicated that UK interest rate cuts could be more aggressive, as inflation is easing better than they expected. This put a stop to the rising pound, now fallen from a peak of c.$1.34, to $1.314 at the time of writing. Lower interest rates obviously good for equities, and earnings (at leveraged companies).

Rachel Reeves speech at Labour Conference reiterated that Corporation Tax would not be changed for the duration of this parliament - reassuring for businesses and company earnings forecasts.

UK services PMI data (a key forward-looking indicator of business confidence for the bulk of the UK economy) - softened to 52.4 in September, down from 53.7 in August.

Profit warnings (covered in SCVR) - 7 this week: ECO Animal Health (LON:EAH), Inspiration Healthcare (LON:IHC) , Wynnstay (LON:WYN), Aston Martin Lagonda Global Holdings (LON:AML) , Brighton Pier (LON:PIER) , Surface Transforms (LON:SCE) , and Likewise (LON:LIKE)

Ahead of expectations (covered in SCVR) -…

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Alphaflight

4th Oct '24

"There is a cost and it does not pay interest so purely an inflation hedge. Rainy day asset, but how collect, carry and transmute into cash - is that liquidity I hear. "

I started buying gold when it was around £400/ troy ounce so I have no complaints. If you hold it in a vault with goldmoney or silverbullion you can sell it back to them at close to spot and convert to fiat (USD / GBP/ SGD /EUR).

"ETF can trade, CFD's can trade, individual miners can trade, royalty cos can trade Royal Gold (NSQ:RGLD) Wheaton Precious Metals (LON:WPM) not a sad choice. Newmont (NYQ:NEM) and Barrick Gold (NYQ:GOLD) are candidates. "

All of these are excellent choices. I own hold all of them.

"Prefer the John Wick version and buy the small denomination and bury it under the garage concrete for the 'rainy day'."

Yes there is logic behind that as long as you don't lose them in a boating accident:-)

jimbob2

Many thanks All, much for me to consider !

Investment4Adam

Each to their own Yiannos but couldnt disagree more. The comments are hugely useful and as Paul says on the podcasts they can be as useful as the reports themselves. Unfortunately due to work commitments I don't read until 9pm++ and by then see little point in posting. There are a huge number of factors which affect markets. Where I don’t think they are relevant I just flick past them. Maybe I miss key points maybe I dont.

As for thanking Paul that is again up to the writer. I dont agree with everything he says but the work he puts in is unbelievable. As well as this the weekly podcasts, interviews, extra videos, hardly any holidays. So if people wants to express this good luck to them.

We will only appreciate Paul when he has had enough and packs it in. I hope thats not until the 2040’s so in the meantime just appreciate.

Paul - thanks! And likeswise to Graham (and Roland) too. What we get for the subscription is unbelievable value.

Harry Hindsight

Tottenham Court Rd shop is empty. Grandkid into Skipidi toilet and Robucks. I did hand painted Napoelonic figures as a youf but not sure this lot have it. Nice if they do.

Dragon

I can't believe it's not butter!

Lochinver

Oh dear

hiewyj

5th Oct '24

Hi Paul,

Yes please to your offer of a weekly markets/macro summary

SCI20

Thanks to everyone who offered suggestions on how to invest in gold.

Don't forget Silver. Gold down on Friday but Silver held up. Silver has been following recently and there is a disconnect with the gold/silver ratio.

When gold becomes very expensive (the BRICS have bought it all up) then silver will pick up as money again. Its also used in solar panels and lots of electrical connections so has industrial demand supporting its future wealth value - imo.

Nice to have opposing opinions and it is important - cannot avoid politics when clowns are in charge of our energy security and stewardship. Net-zero may be nice but don't want to die getting there.

To build the infrastructure will need processed natural resources. Wind farm to socket outlet and all the control equipment in-between.

So need to know the companies in that space. Will check who's on the next honours list. Must find out who makes those plug in cable thingys.

Think the budget will launch the National Wealth Fund and GB Energy to entice our pension trustees and retail to invest in said infrastructure. So will likely be holding inadvertently anyway.

Great inventions:

No. 62 - velcro

No 5 - mouse scroll wheel.

Your wife may have suggestions :)

They are doing concessions, think I saw Jaeger, Under Armour, etc and their own good brand Autograph. Debenhams used to do the same, the concession basically 'rents' the space or a % of profit made in store. And gains access to M&S finance, loyalty card and pay in 3. The larger stores are warehouses so full utilisation.

Also note instead of putting out of season leftovers on sale, has a rack of 'last look' and at full price lol. Then go off to the Outlet stores.

Nice big store at London Stratford Westfield - space and not a rugby scrum like say Primark.

Long may they be on the better High Street.

Good advice thank you. Physical gold and silver are available as individual ETFs but it would seem there is not an ETF that combines both.

The Phoenix

Hi net worth individual ! this is news to me Harry if you could point me in the direction of my alleged millions you can have half.

6th Oct '24

Morning SCI20,

"but it would seem there is not an ETF that combines both. "

Have a look at Sprott Physical Gold and Silver Trust (LON:0N2R) :

The Sprott Physical Gold and Silver Trust

Why Invest in CEF?

Fully Allocated Gold and Silver
Redeemable for Metals
Trustworthy Storage
Potential Tax Advantage
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A Liquid Investment

peterg

Net-zero may be nice but don't want to die getting there.

Trouble is many don't want their children and grand children dying from not getting there!

Morning Alphaflight, I researched the Sprottt combined ETF and it is exactly what I am looking for, however AJ Bell my pension platform provider does not offer this. It would seem I will need to open a gold and silver ETF separately. I note that Edmund Shing has today highlighted the strength of silver.

Mark B

And somewhere in the middle is the truth. Talk of killing our grand children is very dramatic, which tugs at the emotional heart strings - yet the evidence is not so conclusive. Dying to get to net zero is the same thing in reverse. Careful study and pragmatic application based on the facts is generally key to a successful outcome. I have faith in the ability for humanity to succeed, as we've always found a way. Extreme views are very popular as they attract all of us - it's our nature - but we don't have to subscribe to them. The mundane work of sifting through all the information is tedious and therefore avoided in the main, so we rely on others to summarize. Too often those we invest our trust in to summarize, have different incentives to us and we get the wrong end of the stick. And this is why I think, somewhere in the middle is the truth.

Hi Mark B,

If it was all about our future health and well-being then the EU presumably wouldn't be placing 45% tariffs (sanctions?) on Chinese EVs for example. Instead they would be encouraging us to buy them...

Small Cap Value Report (Fri 4 Oct 2024) - JDW, RBGP

Weekly macro/markets summary -

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Paul Scott

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