Monday, November 11, 2013

Twitter Indicates Market Risk Appetite

Markets rose based on good data; we saw an initial selloff, a usual reaction to normal tapering fears; however we saw the market end 1%+ higher based on the market now allowing for tapering as long as fundamentals can continue to grow. The ideal scenario for the FED to taper is exactly what we saw on Friday; markets responding positively to good economic data. However, the bond yields rising hurt home mortgage sector and gold sector, two of the sectors that I have a large allocation of portfolio. I've held my positions, even adding positions in the past two weeks: FGE, SWM, AEU, ACG, NXS; all ASX stocks.
  • Gold fell over $20, USD rallied, div stock, home builders all suffered.
Twitter had a opening of 73%; whilst I wanted to gain some exposure in this stock, there is not much chance that I would buy into this valuation, something like 30x EBITDA would be a price around $30, even after a 7% fall the following day Twitter was at $40+