iPredict Column

I’ve resumed doing a regular (paid) weekly column for iPredict, for them to use in their e-mail newsletter to subscribers and on their blog. I’ll also normally publish them here also. This one went out yesterday and interestingly several of the stocks seem to have moved already based on my analysis. In future will try and blog them around the same time they are e-mailed out.

BuysBeing a long time studier of Winston, I never thought he would hand power over to someone else, or share it. So I managed to get 200 shares in Peters.Leader for under 39c. The recent NZ First conference confirmed he is carrying on as sole leader so I am looking forward to a good return on 1 January 2010 when the stock closes.

The current price is 89c. There is little risk of Peters standing down in the next four months, so traders can get a 12.3% return over four months – equal to an annualized return of 37%.

Personally I’ll be getting a 156% return over 10 months, equal to 188% return on an annualized basis. Thanks Winston.

Mayor.Brown is also worth trading, as a short-term pick. I am not saying I think Len Brown will win the mayoral election – it is too far away. But I do think his share price will increase over time from the current level of 28c, as he is looking to be the main centre-left candidate. I grabbed 200 shares at 16c and will consider selling if the prices gets to around 40c.

His shares were only 20c a week ago, and have increased with his official bid announcement.

Sells

DL.King.09 is trading at 15c and only pays out if King retires as Deputy Leader by the end of 2009. Despite Annette’s protestations I still don’t rule out a possible mayoral bid in 2010, but we can be almost certain that she will not be making any announcement by the end of this year.

So if you short sell her stock at 15c, you can buy it for 0c when it closes on 1 Jan 2010. And that is an 18% return over four months, annualized to be a 53% return. Again some easy money in my opinion. Over time I have sold 445 shares in this stock at an average price of 25c.

Another easy sell is Lab.Shearer currently trading at 20c. This stock pays out if Shearer replaces becomes Leader before the 2011 election. That just is not going to happen. Now the stock will not pay out until end of 2011 so the return is 25% over around two years or 12% per annum. It is a very safe reasonable long term position.

My other recommended sell is GST.UP.JULY10 which pays out if GST is increased from 12.5% on or before 1 July 2010. The current price is 22c. I do not rule out an increase to GST at some stage. However the earliest such an announcement would be made would be the May 2010 budget, and it is highly unlikely the Government would give retailers only four weeks notice of a GST increase. Also many businesses pay GST over periods ending either on 31 July (if 2 monthly) or 30 September (is 6 monthly), so my conclusion is to sell the GST stock. I have sold 50 stocks at 23c, which will give me a 30% return over ten months or a 36% annualized return.

Polling Stocks

This Friday should see the next Roy Morgan poll published, so trades can still be made over the next two days. The polling stocks will open and close every two weeks and offer the quickest opportunities to make (or lose) money.

The next poll should cover the period from 17 August to 30 August, which includes the results of the smacking referendum. However the market seems to slightly favour National increasing support with that stock at 50c and the National drop stock at 45c.

By contrast the Labour drop stock is at 58c – perhaps reflecting Goff’s low profile of late.

If one had a bit of money to speculate, you could do worse by throwing a bit at the no change stocks which are at 4c for National and 5c for Labour. Since the election National has stayed the same in the Roy Morgan poll 19% of the time and Labour has stayed the same 6% of the time. You’ll probably lose your money but the chances of a 1900% return are not too bad historically.

Cheers,

David

Disclosure

David’s current positions are:
DL.KING.09 Short, FASA04.REPEAL Short, GST.UP.JULY10 Short, LEAD.GOFF.09 Short, MAYOR.BROWN Long, MIN.DEPART2.09 Short, MP.ANDERTON Short, MP.PETERS.2011 Short, NAT.MAORI.09 Short, NAT.UP.30AUG09 Short, OCR.INCR.APR10 Short, OCR.INCR.JAN10 Short, PETERS.LEADER Long, PM.2011.NATIONAL Long, ZIM.MUGABE Short

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