Labour The Saviour?
We have obviously had our politics overload in the wake of the Labour victory. Most of the things one could say about the subject were either anticipated or said before July 4. What happens next is the juicy part. Will the Conservatives stay in the centre and doom themselves to being eclipsed by both Labour or Reform? Will Keir Starmer be another dose of New Labour 1997 – 2010? Will this mean that we continue to have big state / high tax?
The real crisis we have is that of growth, and as Winston Churchill said, “you can’t tax yourself to prosperity.” One could also replace the word tax, with the words immigration, regulation, subsidy, nationalisation. What we do know is that taxes and regulation are only going to go up. The state is bust and the people are bust, and when it comes down to it, the state takes priority as far as cash is concerned. On this basis Labour will fail, supermajority or not. We know this because this is how the Conservatives failed. At the end of the day the people have to be free to create prosperity. At the moment, there is little reason for them to bother. It looks as though the Magic Money Tree will have to be wheeled out for the failed NHS, the failed welfare system, and our creaking infrastructure.
Eighth Time Lucky
It is also worth giving Nigel Farage a mention, getting elected as a MP on the eighth attempt. One wonders how many of us would have the persistence to do so? I met Farage 10 years ago, during his UKIP phase. Perhaps not to his delight I managed to corner him at a fundraiser. I suggested that UKIP (and its “Thatcherite” values) would only become a mainstream if it become more than a one policy Brexit party. Perhaps he wishes he had listened to the unsolicited advice a few years earlier. Maybe then Reform would have been in 2024, where it might be in 2029?
Helium One / Avacta
On the markets the FTSE 100 and the AIM index were up slightly this week. In fact, the latter was up 1%, which provides some crumb of comfort. The rally in small caps was driven by two of the most followed stocks, Helium One (HE1) and Avacta (AVCT). Much to my delight both stocks were highlighted from their respective lows, 0.5p and 40p respectively on my daily Bulletin Board Heroes. For HE1 the initial target was 0.80p – 0.90p, and then 1.35p. For AVCT it was 0.53p, 0.63p and then 0.67p, the latter level achieved on Friday.
ZaksTradersCafe
There are a few points to note here. First, I do not think that there is any other regular rundown of possible small cap winners. Second, the video is highly followed and puts small caps on the map to ZaksTradersCafe’s 25,800 followers on X. Third, I am sure that even now most small cap CEOs are not aware of the video. If they did I am even more sure they would not keep banging their heads against the wall with all the “pretender” PR services, claiming audience, influence or investors. My goal is to educate CEOs on what actually delivers and what does not. At the end of the day as a CEO you want to deliver the most value for shareholders, something which at the end of the day is largely driven by the share price backed by well communicated newflow.
Red Tape
One understands that the City and its service providers remain a mafia of services and is a closed shop to those who are not “one of the lads”, or did not come from whatever the right background is at the time. What is interesting though is that those with the least talent and the worst offerings actually club together – giving each other spurious validation. I am looking forward to how Sir Keir and friends are going to sort this out, or not in the financial area. The City really needs help at the small cap end, in terms of encouraging people to invest (stamp duty / ISA allowance) and of course, the massive red tape / PLC costs. Ironically, it may be easier for the new Government to change the City, than cut red tape in the planning process and deliver more housebuilding.
URA Holdings
As far as a couple of other stocks of note this week, it was surprising to see URA Holdings (URAH) shares remain on the back foot. Ostensibly this is on the basis that the market (perhaps wrongly) believes that in the wake of this week’s positive results from Financial Model for the Gravelotte Emerald Mine there could be a fundraise. Nevertheless, the highlight an IRR of 76% revealed here is nothing to be sniffed at. At the same time the company announced at the end of April that it was on time and within budget, and looking to sell its first emeralds early in H2 2024. This may be a situation where the market finds itself wrong footed.
Metals One
Another situation where Mr Market looks as though it is way too negative is Metals One (MET1). Here the twist came in May as the company terminated its farm-in agreement with Gunsynd (GUN). But rather than being a negative, this was actually a significant positive. It showed that MET1 effectively wanted to have all the “booty” at its Black Schist Ni-Zn-Cu-Co project, rather than sharing it with Gunsynd. With the directors taking part in the subsequent £895,000 placing, the company is now on the trail of upgrading the resource at Black Schist. The goal is to turn the project into a global resource in the order of 200 Mt to underpin a long-term producing asset.
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