There’s an awful lot of uncertainty in the Global financial markets at the moment particularly European markets.
With the recent Irish bail out being seen as a precursor to similar action that will HAVE to be taken yet again to under-pin Spain,Italy and Portugal’s financial markets. Make no mistake the Irish bail-out, which you will all remember was vehemently denied by the Irish Government, was given the green light weeks ago. Secret negotiations had been ongoing for quite some time with the IMF/European Union/Britain. These things always run a certain way and you can bet your last drop of blood that the Spanish,Portuguese and Italian governments are already mired in talks to secure funding when the markets move against them. Lloyds are at present on a declined curve due to their exposure vis-a-vis the Irish banks they will almost certainly go sub 60p.
However this presents the canny investor with a whole host of investment opportunities. There are literally hundreds of companies trading below their true value. Take HRG for instance a corporate travel company that sunk to 4p from over 100p 12 months ago. I remember speaking to one of their executives who had been patched through to us here from Dubai and at the time he assured me that he hadn’t a clue why their sp had fallen. There was nothing wrong with the company it was just market panic attacking different sectors and creating demons. Time has proved him right they are trading at 36p and have just released a very good set of figures. I could have bought them at 4p but alas I never!
What that example learnt me was that even when the market is gripped by fear the astute stick to the fundamentals! A good company is still a good company in a down-turn!
There is opportunity here and it is knocking on your door. Stick to the fundamentals as a base point for your research “cash rich, good product,customer retention, chance of success” etc all these basic tenets hold true. Never invest in a company unless you have dissected their fundamentals and believe in the investment.