Record Stock Market Highs
I rarely watch Prime Minister’s Questions, as it is normally a case of unanswered questions, swerves and of course, broken promises. However, I did catch part of Wednesday’s contest between Sir Keir Starmer and Kemi Badenoch, where the former gushed about the improved economic metrics delivered by the government. The key standout was Starmer highlighting that the UK stock market is at a record high, something which presumably he feels that is a result of the policies delivered since July 2024. This may very well be the case, if you believe that when the going gets tough, the tough buy into the stock market. A more finessed explanation is that the FTSE 100 is weighted to international companies, who are by definition rather insulated from the slings and arrows provides by Starmer, Reeves et al. On that note it is perhaps a little worrying that if Starmer highlights equities as being at record highs, they may not be high for that much longer given that for so many other aspects of the economy, so far he has been the kiss of death.
Buy Bonfire Night / Sell Valentine’s Day
Most of us familiar with the stock market are familiar with the saying, “Sell in May, and don’t come back till St Leger Day. This adage plays well to the dog days of summer and to the way that increasingly large swathes of the calendar are affected by holidays and half terms and any other excuse not to do any work. However, this time of year is actually rather more interesting, and arguably far more profitable statistically speaking for investors. There is the so called Halloween indicator, focusing on the phenomenon of the stock market being stronger over the cooler months of the year. In addition to year end window dressing of stock portfolios by fund managers towards the end of the year, there is the no brainer concept of fresh funds heading for the market at the beginning of the year, something which would quite logically help the market in January and February. Indeed, the “January Effect”, what January does predicting the rest of the year, is logical, if not always correct.
Some years ago I did look back at the historical performance of the FTSE 100 over different parts of the year, and it has to be said that October turned out to be the one that arguably more useful than any other in “predicting” what may happen next. The most useful takeaway was that if October was a down month, then November and the following few months tended to be a buy. Even better, if October was a down month, November and the following few months tended to be a buy. While this momentum could very well last to the spring / May, the safest thing over the years has been to buy Bonfire Night / Sell Valentine’s Day. Given that this year we had an up October, and managed to survive a tariffs crash, it will be interesting to see whether November and the next few months deliver the goods for investors.
Aquis And Cryptocurrency Strategy
Apparently, not content with coming up with a directive at the beginning of September, Aquis have followed up with Framework for companies in the BTC Treasury Strategy (BTS) space, as if the 80% plus declines from the peak in June was not enough of a kick in the teeth. We already know about the BTS part of a company having to be proportionate to its real world business. But with aspects as such staking now also having to pass due diligence / given the Aquis thumbs up, it now appears that the lay of the land will have to change, and that some companies currently listed as BTS plays will either have to leave Aquis, or perhaps even leave the market completely. This my offer the possibility of consolidation in the field in the months ahead. Or it may simply mean that those companies that do actually have a proportionate / existing business such as say Amazing AI (AQSE:AAI) which is set to use derivatives strategy to gain exposure to crypto, may turn out to be the winners in this mini-sector.
Genedrive (GDR)
pharmacogenetic testing company Genedrive (GDR) has been something of a horror story in recent years, from the hangover in the wake of the pandemic, to never quite getting over the line fundamentally anyway. However, this week was a busy week as the market was teased with the company potentially getting a shareholder loan, and the prospect of a Saudi deal. The combination of the two led to the shares being up over 100% on the week, and rather left the impression that the 200 day moving average at 1.3p could be a near term destination for the shares, even if they fall away after that.
Fragrant Prosperity (FPP)
We already heard in July that Fragrant Prosperity was and is a company looking for an acquisition, and indeed, I interviewed Nicolas Gregory from FPP who quite logically left the impression given his background that a deal could be in the tech area. This week the revelation of a fistful of TR1’s made it seem that those who may be in the know were or are expecting something to be announced sooner rather than later. The shares were up 20% on Friday, making for a 38% jump on the week.
Orcadian Energy (ORCA):
We have not heard anything exciting from ORCA since June 18 when the company announced that, Phase B of the P2482 licence, which contains the Elke and Narwhal discoveries, has been extended until 14 July 2027. Given that it is easier for a camel to pass through the eye of a needle than do anything constructive in the North Sea, this was quite a result. But it is intriguing that the shares rose 68% this week, with no fresh news. Presumably, someone, somewhere believes that fresh news is on its way soon.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
