2007 No More

Last day in year 2007. The ASX was pretty much flat, although a faint of a blue sky did came to me from Allco Finance Group (AFG.ASX).

AFG rose more than 7% today after the company said it had raised $200 million for its globally diversified transport and infrastructure fund ahead of schedule.

The fund, Allco Global Transport and Infrastructure Fund, (Allco GTI) received the funding from an unnamed ‘large Australian institutional investor’.

Allco has invested in many different offerings, mainly in the property and transport areas:

• Aviation - Allco own 38 commercial jet aircraft, most are on lease to carriers such as Qantas
• Shipping - Allco own 25 shipping vessels.
• Rail - Allco own around 600 railcarts.
• Infrastructure - Ownership of various facilities, including power generation (including wind), waste water treatment, pipelines, port facilities and energy distrbution facilities.
• Property - Ownership of over 30 major properties.
• Funds Management - Over $60billion in debt funding and asset investment

Australian Housing Market

There was an interesting comment on email from The Daily Reckoning Aust today. The email was touching subprime mortgage crisis and Australian housing market.
Here is thye quote:

Is Australia on the verge of a U.S. style housing quagmire? "Further interest rate rises could stop the housing market recovery in its tracks, housing experts have warned. The warning comes at a time when the Australian housing market has so far shown it is immune to the US sub-prime mortgage crisis," reports Florence Chong in today's Australian.

--It doesn't seem quite accurate to say Australia's housing market is immune to the sub-prime crisis. It's true that there isn't a huge chunk of at-risk mortgages in Australia that resemble the US$2 trillion in ticking sub-prime and Alt-A loans to borrowers who probably won't pay.

--But make no mistake, every credit bubble has its roots in the belief that you can borrow your way to wealth. That belief is alive, strong, and wildly out of control in Australia. The durability of housing prices and the housing market is a function of affordability. You can use credit to bridge the gap between what you want and what you can afford for awhile.

--But unless the government finds new and more innovative ways to channel money to new homebuyers, houses simply aren't going to get more affordable for Aussie buyers until prices fall, or at least fail to keep up with inflation. Paying ten times your income for a house (or even more) is not a sustainable economic and demographic trend.

--The flip side of the argument is that Australia is a nice place to live. We realized this again walking along the beach at North Cronulla on Monday. You can imagine a lot of people would want to live here. Asia's newly rich might be delighted with beach-side investment properties anywhere on Australia's Gold Coast...or Sunshine coast...or East Coast...or West Coast.

--Of course foreign demand will not make Aussie homes more affordable to Aussies. But it may support prices for owners of investment properties. You never know. Either way, we think 2008 will surprise a lot of people who think housing prices never go down. They do. They will. And it will be sooner than you think.

Geopolitical Factors

Benazir Bhutto was murdered, and the wall street took a dip. Pakistan is American's close ally in the war of terror, and Benazir is well known of her stance in supporting the west.

This global political uncertainty also affects ASX. Nearly all my shares are in thr red today, except for REX. Few shares are left unchanged.

Shareholding Update

As of 27 December 2007, I hold shares from these companies:

1. ALLCO FINANCE GROUP (AFG)
2. ALLEGIANCE MINING (AGM)
3. BEACH PETROLEUM (BPT)
4. CBH RESOURCES LTD (CBH)
5. DEEP YELLOW LIMITED (DYL)
6. IBA HEALTH GRP LTD (IBA)
7. MOUNT GIBSON IRON (MGX)
8. METALS AUSTRALIA (MLS)
9. OXIANA LIMITED (OXR)
10. PAN AUSTRALIAN RES (PNA)
11. REGIONAL EXPRESS (REX)
12. SUNDANCE RESOURCES (SDL)

As for now, I am still down around 4% of my initial investment, thanks to nobody..

I am heavy on Oxiana, it makes up nearly 20% of my portfolio, value wise..

Mostly I am comfortable with my choice of companies, except for DYL, IBA and lastly AFG.. These three companies really are testing my patient.. !!!

Broker's Recommendation for Me

Oh, why should I listen to the brokers at the first place!!

This is my circumstances: I'm a mother of three, unable to go to work outside the house because of my family commitment. Of course life's tough, single income with three little boys to raise. I am so eager to find a job from home, so here I am in the ASX with some small amount of fortune to start, dreaming to make my first million :).

Some months investing, I just in love with the share market. Unfortunately this year was very rocky, some carnages along the way. I think I'm still doing ok for a beginner.

Now, about the brokers. I can't aford to pay premium fees for brokerage research and recommendation. For this reason, I'm doing a lot of the research myself. Afterall, I studied a lot of these stuff at Uni, so why not using what I learnt? That's what I thought anyway...

So this is how I work, I did all the reading and researching, checking everything, and then buy a certain stock. Later on it will make me very happy if I know that some brokers are thinking the same as me (i.e put a 'buy' recommendation)

Now, some times, I've got a free trial subscription from brokers. This is where the damage is done! A few times, I read their report AND like it AND easily decided to buy a certain stocks. Big mistake, it never worked for me. Some free subscription recommended Commander Communication (CDR) few months ago at price of nearly $2. Price kept going down, and the 'buy' rating continued until finally it reached some $.40. Well, it gets cheaper and cheaper, means better deal. Wrong.

The same thing happenned with few other stock, such as AFG, price went down from around $11 to about $5.50 and the 'buy' recommendation continues. I'm holding this stock, and kick myself for it. I got the reco from a free subscription.

Don't get me wrong, some brokers have done some amazing jobs for the client, but I think I better stick to my own way. To start from 'brokers recommendation' is not for me!

Warm on Oxiana

Some nasty shock happened at the ASX, as you might all aware of it. The trouble on CNP (Centro) dragged my holding's value down a bit. Overall I'm down some 7% of my initial investment. Ouch!! The biggest hit was on my newly bought AFG (Allco Financial) share, who went down $2 in only a couple of days (this was really a big mistake!! I shouldn't have listen to the brokers. All of them scream 'buy' on AFG. More of this story later...)
My best gain this week was on Allegiance Mining (AGM), who went up around 40% along Zinifex's bid.
I let go my AAR holding at a loss to buy more Oxiana. I doubled my holding, and I hope it will pay off. Copper is heading north, but Oxiana's price was sliding down. This time I topped up at $3.37 per share.

Found a website on base metal price : http://www.basemetals.com/
Some of the articles need subscription to access, but even the free one suit me ok.

Back Again!

Last couple of months, I have been away on overseas holidays that were also happened to be my husband's business trips (partly..). During which I did not actually follow the market closely.. So it was a tiny bit of nasty surprise when I get on again, most of my shares seems to be very cheap now!! I said it was a tiny bit surprise, because ..well, I sort of half expecting it. Subprime mess, US recession and what's not.

The story here is about REX (Regional Airline). It really.. really looks cheap! REX share price has been in a free slide for a while now, and the chart doesn't look too hot. REX has been in a pilot shortage condition, (and forced the airline to suspend some of its route), but otherwise fundamentally seems to be alright still. It's my opinion anyway, so I took the chance to nearly trippled my holding.. Finger crossed, hopefully it will bounce up again soon, when they finish their pilot training.

Huntley still put REX in 'Buy' recommendation, they estimated that the instrinsic valuation of the company is $3.20 per share. Medium high risk.

Rivkin Report (5 Nov 2007) stated that it was oversold and 'medium risk buy'