Trading the Easy Way

"Spring is sprung, the grass is riz, I wonder where the honest politicians and chief executives iz...."

Sorry - couldn't resist that as I sit watching all the 'wee burds' (as my Dad used to call them) wittering and twittering between the stream and the eaves of the house on this lovely sunny day, with the temperature making a serious assault on 23 degrees and the fat cat being divebombed by the house martins.

Anyway, speaking of fat cats, I'll now add considerably to the wittering - I'm never quite sure why gorgeous weather and lovely surroundings seem to encourage my nastier side - that's something for the psychologists among you to consider.

More than one email recently has been asking where my caustic comments have disappeared to this last while, so here you go, those of you who like vitriol with your dose of WICS and who feel I have been a bit bland of late.

It's just that I don't much care to be gratuitously nasty, believe it or not - I prefer a decent reason, and this weekend there's not just one reason, but two....(albeit reason number two stems directly from number one.)

Reason Number One is that having lent Tony a great big pile of loot (totally legally, at commercial rates you understand - after all, 0% is 'commercial' in Japan) I find my nomination for a peerage has been withdrawn so I have demanded my money back - anyway I'm not so sure the loan was actually used for Cherie's hairdos. I suspect it might have been squandered on something trivial.

El Presidente Tony and his wee gang have certainly elevated the concept of 'sleaze' to an art form - I believe Lottery funding is to be provided so that the V & A can mount the definitive exhibition on New Sleaze.

Should we bothered by the way these creatures act?

(Just so there is no ambiguity here, please be very aware that I heartily despise all who would control others for their own gain, so I'm not at all biased against New Labour specifically - I doubt if there's a politician on the planet worthy of respect - not even Mr Galloway who seems to have taken out a copyright on the word.)

Oh yes, and according to government figures, inflation is down to 1.8% - below the 2% target, so all is well in the world. A recent newspaper headline perhaps better reflects reality, however: "Gas and Electricity Bills Up, Milk and Air Fares Down". Oh yes, and toys are cheaper now too - the really important stuff that we can't do without. No distortion in the way the figures are calculated, then.

The way I see things, this blatant corruption at what is laughably called 'the very top', encourages too many people to take a 'laissez - faire' attitude, on the basis of "If they can do it, why shouldn't I do it too?"

And that attitude can be seen no more clearly than in the world of 'Big Business' where those at the top are quite simply ripping off everyone else below them, on a scale that makes the excesses of Maggie's reign seem microscopic in comparison - leading to my Reason Number Two for today's diatribe.

Step forward my least favourite company, Substandard Life.

Not satisfied with having screwed up the returns on innumerable endowment and pension policies over the years, now a bribe is being offered to encourage long suffering policyholders to vote for demutualisation. The 'average' bribe (sorry - I meant 'bonus' of course) is to be £1700 but as with all averages, that's pretty meaningless - a wee bit like London house prices.

Most endowment owners I gather might receive around £500 to £800, although I very much doubt if even £1700 would make up for somewhat less than stellar endowment returns.

This is an organisation that for all of its very long existence has callously played the 'prudent, reliable, honest Scottish entity that truly understands your needs' card for all it is worth, and that has defended the 'mutual' concept harder than any other similar company. "YOU, the policyholders, own Standard Life. WE, the top management, act at all times with YOUR interests at the very core of our being, blah blah."

You may recall from a much earlier WICS (can't remember offhand exactly when) that their previous head honcho retired on a measly index linked £600000 or so a year, at a time when the company's performance was even less stellar than it is currently, and mis - selling claims abounded.

Poor old fellow, having to get by on such a paltry sum.

The current incumbent isn't doing nearly as well - despite having just voted himself another £1m addition to his pension pot, he's still only got about £8.3m in it. I feel for him. At current annuity rates that wouldn't buy much more than about £300000 a year! But the really great thing is that once he and his wee team push demutualisation through, they'll no doubt all be able to set aside a few more millions for their old age because there's bound to be a clause somewhere that allows them to do so. A 'performance bonus' perhaps?

Of course, the foregoing is mere chickenfeed compared to the USA head of Capital One Bank, who paid himself $250m last year, by way of salary. Not bad at all.

Am I angry about such things? Not really - 'jealous' would be a much more accurate description of my feelings.

Only joking - honestly. Of itself, I don't have the slightest problem with people receiving huge pay cheques. And I'm only going on about such matters so that you (hopefully) appreciate why I was banging on last weekend about 'taking ownership' of your financial affairs for yourself, because for sure, nobody else is likely to offer you a secure long term future and a comfortable retirement, unless of course you are already a fat cat - which I doubt, if you're reading this!

These 'top execs' and 'politicians' know how to play the system ruthlessly for their own benefit - WE need to learn how to become self sufficient because THEY won't ever be offering anyone any tangible help if things go wrong for us! (Unless of course you're happy to retire on the State Pension alone.)

I wonder what's going through the minds of UK Peugeot workers at the moment? "THEY will have to do something to help us?"

"Our French colleagues will stand shoulder to shoulder with us?" Dream on! The mysterious 'They' are more than a little unlikely to do a solitary thing except make sympathetic noises in public, especially before the local elections - by next year when the factory closes, all 'promises' will have long been forgotten.

Harsh words from Williams this weekend, eh? But seriously, where will the money keep coming from to cushion people from an impecunious retirement, or from mortgage default after a limited length of time on the dole?

Why would the likes of Peugeot want to keep assembling cars in Ryton at a cost of £11.50 an hour if they can do the same in Slovakia for £2.50? (Not that I'm expecting the price of the finished product to drop, of course, when they make it for a lot less.)

I realise of course that I'm totally biased, having been made redundant myself and having moved on to successful self employment - I vowed never, ever, to depend again upon anyone else for my job. Just to be clear however - this is not an exhortation to go out on Monday and sack your boss, but it IS an exhortation to try very hard indeed to create your OWN source of income!

Anyway, end of diatribe (for now) - hopefully those of you who feel uncomfortable with the foregoing will forgive me - but I won't be apologising, short of receiving a writ.

Moving on to the markets, I note Ford's latest results are a loss of $1.2bn - not totally inspiring.

It seems to me that with the Dow Jones Index making new highs last week against diminishing breadth, the likelihood now of a final pop up towards 11450 - 11500 is quite high, as the really smart money manoeuvres things so as to maximise profits, selling the last of their positions to the very dumbest money. (And also of course selling to some of the extremely smart money that knows there's likely to be a blowoff to the upside immediately prior to the big drop, and is nimble enough to jump in and out before the fall.)

We'll see, but once 11000 is significantly breached to the downside, there's a heck of a hill for it to climb before the Dow ever gets back above that figure.

(Oh, and be very aware if you're currently considering an index 'buy' trade, spreads and stop losses might add up to its being unaffordable within the '4% of your bank' criterion - in which case, if you take the trade, you'll lose. I just know you will.)

As far as charts go today, I'm putting up one that shows how 'pattern changes' often provide strong clues to future events - perhaps if you have been watching water companies after the recent featuring of Northumbrian Water in WICS and the overall M&A activity in the sector, you too might have noticed this one.

The second chart today (Kenmare) is showing some interesting movement - see what you think.

There are no DMAs marked on either chart today because it will be a good exercise for you to choose appropriate ones for yourself - if DMAs have not been included on my charts it's usually for that reason, though sometimes it's just to remove 'clutter' to let other things come to the fore, as it were.

And that's your lot for today - the sunshine is calling me and I can't resist any longer.

All the best till next weekend,

Ian.

PS: just to give you early notification: there will be a WICS next weekend (30th April) but not the following one - my first 'remote' fishing trip of the season is beckoning!