The Year's High
01/02/2004
Well I posed the question last week, 'are we getting a slow down or a speed up' to the year end. The Dow's close at the year high answers the question I guess. Now if the FTSE follows, as it often does then we would be targeting 4423 - well it looks like we may well break it before year end.
The US driver seems to be company investment rather than the ever reliable consumer - that is going to be the key market driver in the early part of next year. I recommend paying closer attention to company capital spending than consumer spending.
Which stocks are 'in play'? Carpetright looks set to reach 900p. I picked this on Bloomberg last year, since when it has risen 50%. I was asked at the time, 'what about everyone fitting wooden floor' and I replied that you could not get away from the fundamentals the stock was exhibiting.
Check out Kesa Electricals for a potential 'flyer and faller', that is something that climbs to fast, dumb money then gets sucked in and it falls. It may not necessarily do so and when I just can't get a handle on the direction, I tend to go in the direction the price moves - ie if it makes a new high relative to the previous day then go long.
Informa is also back on the treck up to and worth a look.
Valuations and Growth
For value and growth Kier Group is on the radar - but with resistance at 650p, the more cautious will wait for a break of that level first. Care UK as mentioned last week continues on a strong trend; it will pause and it is a value-growth stock so the pause will be longer than for a momentum stock - expect a couple of months.
By the way...getting to a million.
It is times like the end of the year that people start thinking about longer term financial futures. Okay so here is some simple investment maths for you. Imagine you put £70,000 away in the markets in 1987. You added £7,000 annually in saved capital. By 2004 you would have £1,000,000 if you just achieved a 14% return each year. By the way, the FTSE 100 achieved 6% annually BEFORE dividends over that period. In other words, it would be pretty mediocre and no more than expected to get to the £1m mark - it's all the FTSE 100 gives you.
You can email me for a free 28 page document of how to trade and invest better by me exclusively for ADVFN readers: alpeshpatel@tradermind.com
|