The stock market is just a game of chicken. Investors are like children seeing how close they can get to the edge of the sea without getting wet when a big wave crashes in. If they run away too soon, they miss out on potential profits in a rising market.If they stay too long, they are likely to get wet, or even swept away.
There were certainly a few shrieks at the end of last week as a wave of selling swept through stock markets around the world. The Punter has to admit that he got his feet a bit wet, even though he suspected a wave was coming.
What he doesn't know is whether an even bigger wave is riding in behind it. Given the level of debt around the world, and the profit-before-prudence culture in many banks, it seems highly likely. The value of the Punter's portolio dropped 5 per cent in a week. He is not panicking, but he is definitely putting prudence before profit.
He is locking in some profits by selling another 30,000 shares in the Seafarms prawn farming group (ASX code SFG) and the last of his Keytone Dairy (KTD). More than a third of his portfolio is now cash.
Australian Dairy Farms (AHF) had to delay the closing date of their 13c-a- share offer by two weeks because the share registry, Link Market Services, failed to get the application form either online or in the post to shareholders in good time. The offer had been due to close on October 10, but the market fall has now eliminated any discount. The offer closes on October 24 (not October 2, as stated in last week's column).
Murray River Organics (MRG) is pricing their offer at 10c, compared to the 27.5c when the shares were suspended. The shares will not resume trading until after the share offer is completed, so shareholders will have no idea what the market value of the shares is before they decide to take up the offer. It closes on October 24.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.