Resistance Is Futile
One of the best and worst things about being alive in 2023, is that you could come up with the right closing price of the FTSE 100 every day for the next year and no one would notice. It is a kind of shadow ban thing. The beauty of the current environment is that social media ensures with information overload, that most cannot see the wood for the trees. It t is mob rule or rabble rule both online and off. All of this plays into the hands of those who are actually in charge, and accountability of any kind has totally diminished. What is most interesting is that people are naïve enough to think that any protest works: be they Far Right, Palestinian, anti-ULEZ, anti-Tory et al. As fans of Dr Who and Star Trek will be aware, “resistance is futile.” What is interesting is that so many people, even those in the public eye do not realise this is the case.
Bearing in mind how difficult it is to change things leads logically to the idea that rather than things having accidentally or just happening to be as they are, to the idea that they have been deliberately made that way. With the current boiling frog stock market, the FCA simply had too many listing companies and too many brokers to regulate, because there are too many rules to regulate. Regulation is a form of taxation, and taxes only go one way. The numbers of market participants had to be, and still have to be reduced. Does anyone think that increasing the minimum market cap for the standard list from £750,000 to £30m was going to bring more IPOs? Does anyone think that making the account opening process for investors more difficult than joining MI6 was going to add liquidity to the stock market?
This week I was inspired by a Peel Hunt article “How to reverse the rapidly shrinking UK Small & Midcap market.” There are a number of suggestions, which will obviously not happen as they almost all involve the government receiving less tax income if they are implemented. Fiddling with ISAs, IHT, Stamp duty, CGT etc, is all marginal and just tinkering around the edges. The main question is what Peel Hunt, the LSE, Lloyds, and the Quango type organisations that were consulted before the stock market was destroyed were doing as all the market ruining rules were being first announced? Things will have to get much worse before they get better, and one cannot rule out a situation where apart from nationally known names, corporates stay private in the UK.
At least somehow, against all the odds, we still have some listed companies on the stock market which represent interesting prospect and have enough liquidity, and volatility to offer traders and investors something to shoot for. One of them may be Neo Energy (NEO), which rang the bell at the LSE on Thursday. The company represents one of the only pure uranium plays on the market, unlike some of the few me too entrants we have seen of late.
Vinanz / Pennpetro
David Lenigas’s Vinanz (AQSE:BTC) has not only managed to raise some cash this week, it has done it in a timely manner, as the price of Bitcoin soars on US ETF hopes. Our friends across the pond still seem to be very squeamish about all things crypto, but remarkably unconcerned about things like school shootings and an opioid epidemic. Indeed, it was a busy week for Big Dave, as Pennpetro (PPP) the Peach Creek (Austin Chalk) Oil Field in Gonzales County, Texas, USA, company said the first two truckloads (170 bbls each) of 33 API oil have been dispatched. Not quite up to Ghawar Field standards, but it is a start.
While I may be known as a fan of technical analysis, there are plenty of times of course when the fundamentals will triumph over the lines and squiggles. A good example this week was the news from Poolbeg (POLB), the clinical-stage biopharmaceutical company, where it announced the appointment of key former executives of Amryt Pharma, a billion dollar company, to its leadership team. Given how important management is to growth companies, it was no surprise that even in current stock market conditions the stock jumped by over a third on the week.
A situation where one can say that a combination of technicals and fundamentals won the day was Xeros (XSG). Here I pointed out the winning look of the daily chart. This occurred ahead of news of stakebuilding in the green technologies group by Dowgate led to a near 50% rise in the stock on the week.
One to watch for the next few weeks is Wildcat (WCAT), where one would expect the overhang from the recent placing to be chewed up, there is director buying, and if the company pulls off a giant killing oil production deal in Sudan, significant upside. The key here is that if the company get to production through its own funding sources, this could be a surprise winner for early 2024. If not, one would suspect the downside is already factored in the share price, after what was after all an oversubscribed fundraise.