could hit a dollar, page-23

It's very difficult to say to be honest.

I always remain sceptical about the "someone knows something" play. I've seen a lot of "someone thinks they know something" and "someone though they knew something and were accidentally right" and "someone started a rumour which spread like a bush fire".

In my experience, if someone really (I mean really) knows something they play well under the radar and shut up about it. If I knew that BNB were about to be taken over (I don't), then officially of course I would do nothing as it's insider trading. However, a lesser person would slowly accumulate bit by bit in the knowledge that when the announcement comes, they're gonna make a killing anyway. If they blab, it usually goes very badly.

There is a general feeling that the worst of the crisis may be over for the stock market. The 'real economy' probably has a way to go but the market is pricing most of this in. Only time will tell, but a further 3,000 point drop this year ain't going to happen.

There are a handful of companies out there who, if they were going to go under, probably would have done so at the same time as AFG, ABS and the US casualties. There may well be another round of casualties, but we are also witnessing a willingness from lenders and stakeholders of distressed companies to go through corporate work-outs rather than liquidate. They realise that markets, economies and asset values cycle and that there is a good chance of recovering funds rather than writing them off.

So we have a host of stocks who have been absolutely walloped in the last 12 months. Investors are starting to cast an eye over these companies trying to factor in what the future might look like, realising that the worst could be over and the problems seem only temporary.

The media has also got on board to a certain extent but I also think investors are listening to the media less on the downside given their track record over the past 12 months. People get fatigued with constant bad news and speculation and start to see more and more positives through the noise.

Adding to this too is the fact that CNP, CER, BNB and BBP all have upcoming announcements which are likely to improve sentiment for the companies rather than dampen it.


In summary then, if "someone knows something" then it's probably: sentiment is slowly improving, there are some bargains to be had in under priced stocks, some announcements are due and the media is influencing downside thinking less. These stocks are still high risk, but people are slowly feeling more comfortable about it.

There... now we all know something.


Or do you know something I don't?