snippets from my weekly report, page-4

Thanks Almut,

Those are interesting figures.

A couple of points.

1. You omit to point out over what period of time you have looked at for those figures.

2. I was not particularly precise about "under perform". I used a secondary source which was based on relative performance not absolute performance. The figures were American for the Materials and Energy sectors in the American market - relative to other sectors.

3. I've done a quick eyeball of the chart for BHP on a quarterly basis over the past decade. That suggests that BHP has a seasonal bias towards the first part of the year. In the following years, the closing figures for BHP at the end of the first and second halves of the year were:

2000: 9.56-9.18
2001: 10.34-10.50 (Up slightly but nothing much in it, the third quarter was down on the second quarter 10.34-8.58)
2002: 10.30-10.15
2006: 29.00-25.30
2007: 44.55-40.15
2008: 43.7-30.44

BHP was either down or relatively steady in the second half of the year in six out of the past nine years. In the one year that it was up slightly, it fell significantly in the third quarter, down -17%)

Years 2003, 2004, 2005 BHP was in a strong bull market and the world was recovering from the early 2000's recession.

4. If you look at a quarterly chart over the past decade for Qantas which is sensitive to international price changes in the oil business you will note that Qantas was up in the second half of the year in the following years:

2000
2001
2003
2004
2005
2006

Qantas has been up in the second half of the year in six out of the past nine years.

5. Woodside Petroleum was down in the 2nd half of the year in the following years:

2001
2002
2006
2008

Four out of the past nine nears, and two out of the past three years. Given the lack of robust economic activity currently in the world I think we can probably expect Woodside to follow a similar pattern this year.

I still think we can expect some softening in the Materials and Energy sectors in the 2nd half of the year. There are, of course, no guarantees. We always need to watch price action. All I'm doing is suggesting a scenario which might or might not occur.


Cheers
Red