Bank of Queensland (BOQ.ASX) - support at $7

The Bank of Queensland (BOQ.ASX) strikes me as an even better buy than ANZ because of its favourable geogrpahic exposure to Queensland. Queensland has several positive aspects to it:

1. Strong population growth
2. Strong tourism potential - given the low $A outlook
3. Strong coal & gas sector - thanks to coal seam methane. The investments planned in this sector will be preparatory for the day the global recovery occurs. There are plans for an LNG terminal for the gas, likely power stations, there is a constraint on coal export capacity too.
4. Prospect of a merger with a financial services (wealth management enterprise) - long term
This bank also has collapsed along with the other banks. There is I suggest the prospect of greater exposure to loans, so you might want to investigate its provisions for doubtful debts, and the CEOs comments in this regard. But for a trade, there is some upside coming.
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Andrew Sheldon www.sheldonthinks.com

ANZ Bank - approaching $10 support level

Australian & New Zealand Banking Corporation (ANZ) is under stress as it approaches its $10 support level. The Australian banking sector is in good condition I would think, so this would strike me as a good base from which to buy. ANZ does have greater exposure to NZ, but the other banks are similarly exposed. Commonwealth Bank owns Auckland Savings Bank (ASB) and Westpac also has a subsidiary here. ANZ has been the leading Australian bank in the Asian market.

ANZ has fallen from over $30 to almost $10. That strikes me as a decent correction even if the banking sector is not going to be one of the best performing in the next few years. One needs to remember that the banks have a solid position in wealth management, and their control of credit and forex is unassailable thanks to government favours (barriers to entry). People will say that there are no barriers to entry, but the reality is that huge amounts of money would be required to duplicate the position of the major banks. Interestingly a number of Australian financial institutions are interested in becoming banks, so we might just see that reality. I would love to see an online bank like Shinsei Bank in Japan. But you really want a bank that can perform all the tricks. Its not enough to offer cheap services, you want a full range of services. eg. Stock broking. Some existing banks have relationships with third party brokers, etc, but these relationships are too arms-length to effectively integrate services. B
uy at $10, look for exit before $15. No buy & hold in this climate. We should be traders for the next few years, with the exception of gold & silver, where we can take longer term positions.
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Andrew Sheldon www.sheldonthinks.com

Graincorp - at support - a good buy

Graincorp continues to look like good buying given that the Australian Wheat Board just reported a good profit, and the industry had a good season. Of course with the Aust currency so weak most of the profit will go to growers, which is why I recommended food producers some time ago. AAC was another one. I will take a look at some NZ food producers in coming weeks.
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Andrew Sheldon www.sheldonthinks.com

Graincorp - at support - a good buy

Looking for a great stock in the rural sector. How about a stock that does well no matter how the economy is fairing? Well consider that companies make money in different ways. Some pay a price for meat or metal which is subject to volatility. Others make money from commissions. Well think of Graincorp because in bad times you and foreigners dont stop eating. Better still, when you are a starving peasant in Asia, you first eat your own food, then you eat cereals because they are cheaper than meat. Rice is the staple in Asia, but other cereals are growing, such as bread, pasta, etc. Pasta and noodles are cheap and easy to store. Bread gets mouldy.

Graincorp makes a profit margin for transporting wheat (dry bulk cargo) to the ports. Its a good season this Spring so expect a good return from this company. There has been good rains across Eastern Australia. The stock has of course fallen with other equities turmoil.

The stock is a technical buy as well, having fallen to support. See the attached chart.
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Andrew Sheldon www.sheldonthinks.com

Stock picks for dad's in a chilly market

So what am I recommending to my dad today?
Really the only things you should be buying are
1. Food - Australian Agriculttural Company, Qld Cotton Co (taken over I think), Namoi Cotton. they are getting good rains in Nth NSW so should be a good reason. Agric commodities will recover with gold because demand outlook good. Hmmm.. will those ethanol refining plants close at $65/barrel for oil, so avoid corn, sugar. Better wheat, eg, Graincorp, and AAC
2. Gold - Lihir, and I can find you other stocks over the next couple of days.

Phil lost money on platinum because he doesn't listen. I said buy at $3.80 support, it reached that, then rallied to almost $5, but its such a volatile stock. He accepted your buy & hold. Worse that that - he likely said oh, Andrew's right, I better jump on at $4.50-$5.00, not wanting to miss out, and not talking to me, and he probably paid the highest price of the rally. It will recover though, so he should hold. Its not the first stock I would buy for platinum because its black empowerment in Africa, explosure to Zimbabwe, but its kind of the only one..... I think Platinum will out-perform silver, which will out-perform gold, but gold stocks will do very well, and its hard to get exposure to the others. You suggested PLA - which is also Sth Africa. Medium to long term you will be hurt on a strong RSA currency. That will be a big problem. So better to stay with gold in Australia. Because the collapse of industrial metals and energy will make gold better because they will keep the $A weak, so earnings in Australia gold prices exceptional. Only gold and food will strengthen the export revenues. Sugar & corn will be weak I guess because of energy-related sectors since the oil boom.

I say buy LGL (Lihir) because gold has found support I believe if you look at the charts, But watch as the market falls today, see if gold goes up as stocks go down. Gold is very stable, but strong in $A terms, so the gold producer stocks will eventually respond to that. Its just they are being dragged down, so you need to accumulate this week. Best buying mid to late-week (end Oct'08).
Dad, just looking at some stocks. Mincor has $120mil in cash. the company is currently valued at $140mil. Lower nickel prices but offset by weaker $A, so earnings still good. But long term gold will do better because stronger food and gold prices will push up $A, but not nickel because there will be slack demand for a while, but MCR are over-sold, so you can trade them.
See my blue chips blog I have chart for GNC. Food & gold, and MCR because its special. Has cash & high grade nickel.
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Andrew Sheldon www.sheldonthinks.com