Yes, the VIX can go higher but at the moment it's staying well under the 30 level that I think it could reach.
Investors are sending Trump a message, that's what's causing the spike rather than anything severely wrong imo. Also it has got a bit frorthy compared to here where a number of stocks trade so cheaply - the S&P has given back about 7.5% since 19th Feb, the 250 has given back 2.5%.
Basically he has to learn that with power comes responsibility, and behave like a world leader, not a petulant child.
As Maggie, once famously said “You can’t buck the markets” this is something that Trump will learn the hard way. He can only puff his chest out and be a bully to the most vulnerable, so much but the markets will let him know when he’s going too far. If he doesn’t comply, the USA economy and people will suffer and he and his crew will start to feel the heat and lose their support. Trumps not very good at diplomacy but it’s something he’s going to have to learn (probably the hard way!) in the meantime there will be a rocky road ahead for a while.
Have a great weekend! and thank you for all your work so far.
Things change Nathan. The budget will hit retailers hard, it never looked that hard on them a few weeks back till I looked at all the details. Nothing prevents me buying back once punters have been spooked out. Little point if you see these issues coming down the track to not react before others do.
Yep, it seems fickle and I dare say those that just hold will likely do well still. But I can't see something coming and not duck, short term.
Look at the trades on FTC from 4/3/.2025,. You will see 2 x trades of 250k. A trade of 2,465,000 and a trade of 2,570,000. There is a 625k and a (100k & 500k), all match off more or less, the little differences being made up with a smaller trade going through.
Pretty much always happens, so if you see 10m go through it's likely 5m buys and 5m sells.
This is why when something like 30m shares go through you rarely see an RNS or 30m sold - more likely you might see half that RNS'd.
I sold IAG because the forecasts here are nothing like as hot and above the current shareprice as they were 6 months ago.
In November the broker targets were hitting 50% above the current shareprice. Targets now are around 10-20% or so ahead of the share price. It's airlines too and they are not exactly flavour of the month, so I just think there's some better places for my money.
Every sale I make I know I may well regret, but when there are some great little small caps so ignored it's a mater of being invested where I see the greatest opportunity.
Having said all that they have now come off about 10% from where I sold at the start of the week, and looking more attractive now
Thanks CR, great review as always. I actually feel v negative on US markets. Trump is so unpredictable I feel like he's on the way to making the US if not uninvestable then short term untradable...until markets start to take his comments with a pinch of salt, which I'm sure they will as long as he flip flops and doesn't double down on damaging policies (after all it's all for TV!). I like the fear meter but it doesn't quite reflect the VIX, which can go an awful lot higher than current levels if things get nasty. Isn't that famous CR bowl on the VIX?? Have a great weekend
It is an issue, liquidity, especially in small caps. There's several possible causes for the one and 2 share trades and the like.
One reason can be a 'bot' or a bit of software that clips small trades without moving the share price. These used to be on SETs rather than SEAQ small caps but now they seem to be everywhere. It's not something available to private investors because the dealing costs would be prohibitive. It's done by institutions.
Another theory is that some are triggered by spread bets and CFDs by private investors on things like e-trorro, where people can place tiny bets that may require the underlying share to be bought in the market.
Personally I rarely get that long in an illiquid small cap that I need to trade it when there isn't keen buyers likely about. If I buy an illquid small cap I mentally say to myself that if this goes badly and I have to sell I may be locked in, so they have to be from money I won't need soon.
Of course get a bid rumour or news then the low liquidity may work in your favour as they often fly.
I'd say though, just don't hold more than you are cool being stuck with for a time.
Can you explain this in a bit more detail, Richard? I thought the buy and sell trades are only counted once: " 6% of the co shares went through in large trades on Weds so somebody was buying heavily – if 6% showed that’s usually 3% of the shared doubled up as the trades usually show the buys and the sells creating double the actual volume going through."
Thank you Richard, as always, for a very interesting report.
Re BOOM - I've had a torrid time trying to buy into it this week! After a pullback over the past couple of weeks, it seems to be breaking out again.. so I thought I would buy-in but I've struggled to get a quote for it (liquidity issues, I guess). It's got a bid/ask spread is 3-4%, a Beta of 1.8 and Stockopedia categorises it as a Momentum Trap. Any thoughts? Are you concerned about that?
Richard, may I ask a question about liquidity, or the lack of it, and how you cope with that?
Two shares I follow are Warpaint (W7L) and Fonix (FNX) where it's common to see absurdly small trades, sometimes of a single share. Yesterday there were 76 trades in FNX, a massive increase on the low points this month of 16 trades on 18 Feb and 3 March. In the last hour of trading yesterday there were 19 trades:
1 share x 1 trade
2 shares x 2 trades
10 shares x 2 trades
20 shares x 2 trades
The other 12 trades were of 500 shares or more.
I get the standard explanation for this - low liquidity. But that does not explain why anyone should trade a single share, or 2, or 3 for trade values as low as £1.96
Do you know why? Who does this? What do they get out of it?
And how do you personally trade substantial holdings in small businesses if liquidity is so tight?
I know some of your holdings are big companies with better liquidity, but not all your trades are like that. How do you cope with poor liquidity?
Yes, the VIX can go higher but at the moment it's staying well under the 30 level that I think it could reach.
Investors are sending Trump a message, that's what's causing the spike rather than anything severely wrong imo. Also it has got a bit frorthy compared to here where a number of stocks trade so cheaply - the S&P has given back about 7.5% since 19th Feb, the 250 has given back 2.5%.
Basically he has to learn that with power comes responsibility, and behave like a world leader, not a petulant child.
CR,
As Maggie, once famously said “You can’t buck the markets” this is something that Trump will learn the hard way. He can only puff his chest out and be a bully to the most vulnerable, so much but the markets will let him know when he’s going too far. If he doesn’t comply, the USA economy and people will suffer and he and his crew will start to feel the heat and lose their support. Trumps not very good at diplomacy but it’s something he’s going to have to learn (probably the hard way!) in the meantime there will be a rocky road ahead for a while.
Have a great weekend! and thank you for all your work so far.
Graham.
MKS looks the best of the retailers imo.
Things change Nathan. The budget will hit retailers hard, it never looked that hard on them a few weeks back till I looked at all the details. Nothing prevents me buying back once punters have been spooked out. Little point if you see these issues coming down the track to not react before others do.
Yep, it seems fickle and I dare say those that just hold will likely do well still. But I can't see something coming and not duck, short term.
Look at the trades on FTC from 4/3/.2025,. You will see 2 x trades of 250k. A trade of 2,465,000 and a trade of 2,570,000. There is a 625k and a (100k & 500k), all match off more or less, the little differences being made up with a smaller trade going through.
Pretty much always happens, so if you see 10m go through it's likely 5m buys and 5m sells.
This is why when something like 30m shares go through you rarely see an RNS or 30m sold - more likely you might see half that RNS'd.
Hi Stephen
I sold IAG because the forecasts here are nothing like as hot and above the current shareprice as they were 6 months ago.
In November the broker targets were hitting 50% above the current shareprice. Targets now are around 10-20% or so ahead of the share price. It's airlines too and they are not exactly flavour of the month, so I just think there's some better places for my money.
Every sale I make I know I may well regret, but when there are some great little small caps so ignored it's a mater of being invested where I see the greatest opportunity.
Having said all that they have now come off about 10% from where I sold at the start of the week, and looking more attractive now
He's already feeling the pressure and having a pop at Russia tonight.
Thanks CR, great review as always. I actually feel v negative on US markets. Trump is so unpredictable I feel like he's on the way to making the US if not uninvestable then short term untradable...until markets start to take his comments with a pinch of salt, which I'm sure they will as long as he flip flops and doesn't double down on damaging policies (after all it's all for TV!). I like the fear meter but it doesn't quite reflect the VIX, which can go an awful lot higher than current levels if things get nasty. Isn't that famous CR bowl on the VIX?? Have a great weekend
Hi Michael
It is an issue, liquidity, especially in small caps. There's several possible causes for the one and 2 share trades and the like.
One reason can be a 'bot' or a bit of software that clips small trades without moving the share price. These used to be on SETs rather than SEAQ small caps but now they seem to be everywhere. It's not something available to private investors because the dealing costs would be prohibitive. It's done by institutions.
Another theory is that some are triggered by spread bets and CFDs by private investors on things like e-trorro, where people can place tiny bets that may require the underlying share to be bought in the market.
Personally I rarely get that long in an illiquid small cap that I need to trade it when there isn't keen buyers likely about. If I buy an illquid small cap I mentally say to myself that if this goes badly and I have to sell I may be locked in, so they have to be from money I won't need soon.
Of course get a bid rumour or news then the low liquidity may work in your favour as they often fly.
I'd say though, just don't hold more than you are cool being stuck with for a time.
Thanks. I think I'm close to giving up on the illiquid stuff, which means most of the London market really.
Surprised to read that you have cut the CARD position after the great write up you done on it a few weeks ago.
Thanks again for the summary Rebel
Why are you totally out of IAG after their very recent and solid update and low PE?
Can you explain this in a bit more detail, Richard? I thought the buy and sell trades are only counted once: " 6% of the co shares went through in large trades on Weds so somebody was buying heavily – if 6% showed that’s usually 3% of the shared doubled up as the trades usually show the buys and the sells creating double the actual volume going through."
Thanks Rebel. Funding Circle did a presentation with results. Here.
https://stream.brrmedia.co.uk/broadcast/67a36e71836d608dd9bc07bc/67c96634a65c50207340de96
Thank you Richard, as always, for a very interesting report.
Re BOOM - I've had a torrid time trying to buy into it this week! After a pullback over the past couple of weeks, it seems to be breaking out again.. so I thought I would buy-in but I've struggled to get a quote for it (liquidity issues, I guess). It's got a bid/ask spread is 3-4%, a Beta of 1.8 and Stockopedia categorises it as a Momentum Trap. Any thoughts? Are you concerned about that?
Thanks Richard. Always a fascinating read. I see an old favourite #MKS is rallying off a low.
Richard, may I ask a question about liquidity, or the lack of it, and how you cope with that?
Two shares I follow are Warpaint (W7L) and Fonix (FNX) where it's common to see absurdly small trades, sometimes of a single share. Yesterday there were 76 trades in FNX, a massive increase on the low points this month of 16 trades on 18 Feb and 3 March. In the last hour of trading yesterday there were 19 trades:
1 share x 1 trade
2 shares x 2 trades
10 shares x 2 trades
20 shares x 2 trades
The other 12 trades were of 500 shares or more.
I get the standard explanation for this - low liquidity. But that does not explain why anyone should trade a single share, or 2, or 3 for trade values as low as £1.96
Do you know why? Who does this? What do they get out of it?
And how do you personally trade substantial holdings in small businesses if liquidity is so tight?
I know some of your holdings are big companies with better liquidity, but not all your trades are like that. How do you cope with poor liquidity?