How We Saw Markets In April 24, 2010 – Good Or Bad Call?

Before Tekedia, we ran Nkpuhe. We made market calls and this is one of them. The post is repeated in entirety below. Score us!

 

WEEK OF APRIL 24, 2010

 

Public Stocks


Boots and Coots (WEL) . I expect WEL to appreciate as oil price goes up this summer. With Obama’s lifting of drilling ban at Gulf of Mexico, I feel confident that this firm will do well. I am long. (This was acquired by Halliburton)

 

Citi (C). Citi is back to profitability based on its April 2010 earning. I see this firm to come out strong because of its international business. The recession has watered down competition and I expect bank stocks to appreciate. Within four quarters, this stock will reach $10.. Banks with international presence, especially in developing economies will do well in coming quarters. Banks like HSBC and Standard Chartered Bank will have great future quarters because their international businesses will lift them.

 

Puda Coal (Puda) :This stock will continue  upward momentum because of the drought in China which has made dirty coal a good business in China. I see this stock to double in few months because of the water crises in mainland China which has affected many hydro power plants.

 

Lafarge (LG): This is a major firm in the reconstruction of Iraq, dominating in the cement business with its acquisition of Orascom. As construction booms in Iraq, LG will see great coming quarters.

 

Nkpuhe Intelligence: Any company that gets much of its revenue from Iraq will have great quarters.  With stability in the country a norm,  the economy is expected to grow by 7.3% this year, according to IMF. What this means is that business will be there. Expect the real estate to come back to life.  Housing will lead the economy as many displaced and battered people will have confidence to become normal and settle. U.S will leave a mark in the country by helping to structure a non feudal system that is typical in Middle East. Expect private TV, radio stations, private banks  and early investors will reap gains in Iraq.  Dar Es Salaam Investment Bank (partly owned by HSBC) and other banks will have great quarters because inflation is coming down and dinar (the currency) is stabilizing.

 

As reconstruction begins, massive government projects will be everywhere in Iraq. The scale will be big. Projects in oil production and transportation will be huge. Watch for oil servicing firms: from Schlumberger to Cameron; Iraq business will lift them in coming quarters (if this security and normalcy remain).

 

My bet will be the construction companies. Any major one in Iraq will score big.  I think that construction could accelerate by 20% within the next eighteen months. U.S will make post-Saddam Iraq better, just as a restitution for invading them. And Americans will pour in millions through FDI as security improves.

Private Equities of the Week:

Zynga, the online game maker on social networking sites; maker of FarmVille.

Vizio, the low cost HD TV supply chain maestro continues to eat market share from Sony, Panasonic, etc.

 

Books of the Week: Take time and read any of them, you will get insights.

Guide to Investment Strategy: How to Understand Markets, Risk, Rewards And Behavior (Economist (Hardcover)) by Peter Stanyer

 

The Design of Design by Fred P. Brooks Jr, the pioneer of modern software and Brook’s law Adding manpower to a late project only makes it later’

 

Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America (Hardcover) by Thomas L. Friedman

 

Tip of the Week: If you are starting a firm, try to get many of your suppliers to hold equity stakes in your firm.  It helps you cut costs and be taken seriously by them.

Disclaimer:  This information is shared ‘as it is’ and you assume all risks to using it.

Share this post

Post Comment