Morning! Graham here.

Huge thanks to Paul for volunteering to do yesterday's report, even though I was scheduled to do it. He didn't know this, but I had just spent three days in Newcastle. I am still recovering.

For today's report, I'm tempted to wade into controversial topics with a look at the macro outlook but we also have updates from:

I have to leave the office at 1pm so the report will be finished by then, whether I like it or not.



The Boom is Back

When the din of politics gets very loud, it can overshadow company news. This most certainly happened over the last few days.

If you've been looking at the comments on the SCVR recently, then you'll know what I mean. The dreaded 'B' word, and the 'E' word, dominated the thoughts of many readers.

Most of the time, I try to stay on higher ground and focus on companies. But  the macro picture truly is of great interest to me when it comes to indexes and currencies. Let me preface what I am about to say with the warning that leveraged trading is unsuitable for the majority of people.

  • Indexes

Having watched the FTSE-100 for pretty much my entire career, I think I have the ability to perceive when it offers good relative value. Maybe I am overconfident, but that is my perception.

I backed up my view by taking leveraged long positions in the FTSE during the Spring/Summer this year, believing that there was plenty of value around the low 7000s. Using options, I was able to structure the trades in such a way that I wouldn't lose any money, so long as it settled somewhere above the 6300-6500 region. While I liquidated all of those positions sooner than I wanted, I'd be interested to repeat the strategy if such good value was ever offered again.

The beauty of trading and investing in a diversified index, versus specific companies, is that you can afford to take on a lot of exposure with just a small number trades. That's the beauty of diversification: you can go "big",…

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