It seems to have taken a long time for Ocado to finally list on the London stock market,  but it has finally happened. The shares were listed at 180p which was considerable lower than the 275p that seemed to be the original intention.

 In fact they dropped almost 10% on the first day down to just over 162p.

 The press seem to be very unsure about the prospects for Ocado, with some suggesting a market cap should be half of what was originally suggested at £500mill.  The company has never actually returned a profit,  although they do feel that as turnover increases a profitable year is getting nearer.

 What intrigues us here is that the company although closely linked is nothing to do with Waitrose, they have a contract with Waitrose but that will expire in 2017.  Without that contract they are a company who own two warehouses.  Now Waitrose do actually offer their own delivery service from a local store, which is Waitrose owned and completely separate. It will be interesting to see how that side of the business increases and whether that impacts on the contract renewal decisions.

 For now we’d give Ocado a wide berth.

Alternative Energy Stocks – I have never done much research on alternative energy stocks or renewable energy stocks, but quite fancy doing some research on some.  I guess I believe that Oil is still the main man when it comes to energy so I concentrate my efforts in that direction.  But at some point some of the Alternative Energy plays will really start to work.

So whats it to be, Solar versus Wind ? Biofuels ?  Something else ?   Please let me know any suggestions you have and I’ll take a look around.  Cheers.

Gold Stocks versus physical gold ?  it’s a question I have asked before and keep coming back to.

The idea of buying Gold is that it is a hedge against the markets dropping, some say whilst it might not make you money it helps you not to lose it. Mind you a lot of the same people say the Gold Price is about to double, so I’m not sure that adds up.

Many people choose to buy Physical Gold, but others go for the Gold Stocks. In the last big dip on the markets all shares were hit, including the Gold Companies, so therefore buying those stocks would not work as a hedge. This is strange because at the same time the underlying Gold Price did actually go up.

So for me, the natural choice when you are expecting a dip but also fancy Gold Long Term is to sit on cash and pick up the miners on a market dip.

Tesla Stock gained more than 40% on its first day of trading on the US Nasdaq market.

Tesla who make electric cars performed considerably better than most expected on the first day of trading,  probably helped by the announcement that Toyota hold 2.5 per cent of the company having picked up $50mill worth of stock.

Tesla are not expected to make a profit until 2012, which should be helped by the release a new model, The Tesla Model S.

Tesla are seen as a very modern company more in the mould of Apple and Google than their competitors in the car market. I can understand that comment but its will be interesting to see how that transpires. I expect that the use of marketing will help us to agree with those sentiments, but we’ll wait and see.

The surge in Tesla Stock on the first day means that Tesla now have a market cap of $2 billion,  which on one hand sounds huge for a loss making company, but compared to some of the other car manufacturers out there its tiny.

Maybe we’ll cover Tesla in more detail in a feature story soon.

I wonder how much a Cereal Recall or indeed any other recall can hit a company like Kelloggs.  I guess its not just the costs of this particular recall, it’s the ongoing publicity caused by the reasons for the recall.  I should imagine a large number of consumers will immediately switch brands, with some of those never coming back.

Toyota was another recent case with the numbers of recalled vehicles reaching crazy figures. It’s the kind of publicity that could really cause a company harm in the long term. The Toyota situation appeared to be on a far higher level and it will be interesting to see end of year results for them.

BP Shares buy or sell,  that’s a question we have considered often over the last few weeks.

Since the oil spill started the BP share price has dropped nearly 50% off previous highs,  down to a market cap of 65 billion sterling.  Now many think that the drop is too much and that the drop should have been nearer 10%/20% to match the figure of 13.5 billion sterling being quoted to cover all the compensation claims.

Our initial worries are that that 13.5 billion compensation pot just isn’t big enough. There is nothing out there to show that the leak will be stopped anytime soon, if not then claims are only going to increase.  Also the economic downturn is surely going to mean some of those claims are inflated, and how are BP going to be protected against incorrect claims if this compensation pot is held by a 3^rd party.

With Andarko lining up legal action, and Obama allegedly keen to gain more confidence from the US public by ‘having a go’ at BP,  there could be more bad news to come.

The decision to suspend dividends for the remainder of this year is going to hit those who hold BP purely for the dividend. I don’t know if this on its own will prompt a huge sell off,  but some will look for income from other shares.

Despite all the above many are suggesting that over the very long term BP shares are a buy and we would not disagree with that.

But we feel that for now the best punt would be to hold off and see what happens with the spill and general market conditions, reviewing in August.

NYSE Holidays

I always need reminding of when the NYSE Holidays are, here is some info I have taken from the NYSE webpage, full details are available using the link under the table.

2010
New Year’s Day                                      January 1
Martin Luther King, Jr. Day                       January 18
Washington’s Birthday/Presidents’ Day     February 15
Good Friday                                            April 2
Memorial Day                                          May 31
Independence Day                                   July 5 (observed)
Labor Day                                                 September 6
Thanksgiving Day                                      November 25    (and early finish 26th)
Christmas                                                 December 24 (observed)

http://www.nyse.com/about/newsevents/1176373643795.html

The Difference Between NYSE And NASDAQ ?

Not much really by all counts, I always thought that the NASDAQ contained just tech stocks which is an easy mistake to make because most of the tech stocks are on there. Simply, the NYSE or New York Stock Exchange is the older of the two and is actually a real trading floor, so most older companies are listed there. The NASDAQ is newer and is an electronic trading platform. I believe there are subtle differences in rules but essentially a newly listed company could choose either.

Self Invested Pension Plan

is a type of UK personal pension plan that offers a greater deal of flexibility than stakeholder plans and personal pension plans, whilst still offering the same tax advantages.

The holder has access to much wider variety of investment choices than a personal pension plan. Shares, property both residential and commercial, and even fine wine can fit into plans. Many are attracted by the ability to have individual shares held within the Self Invested Pension Plan, and it can allow for a wider choice of Investment and Unit Trusts than those offered by a personal pension plan.

Often you’ll find these are aimed at those with larger pension pots, and the charges can be a little higher than stakeholder pensions, but maybe the flexibility and access to a wider range of investment will more than make up for it.

Absolute Return Fund

Funds offering Absolute Returns first arrived a few years ago, inspired by the spectacular success of some of the leading hedge funds.

Absolute Return Funds differ to standard funds in that they can bet on the market going down. They do this by trading in a variety of ways.

So if there is a general sentiment that the markets are about to dip, as there is at the time of writing, standard fund managers will probably run for cash in order to avoid big losses, but the Absolute Return Fund Managers can do this and then back the market to drop ensuring a decent profit if it does. Of course if the market does not drop then the losses will be bigger than the standard funds. This means they come with an element of risk.

As we mentioned in our Diversification Strategy post if you believe in something then why diversify. If you think the market is going to drop why just sell some shares, why not try and profit when it does.