Finally Some Good News!

Lance Spicer, Editor - Trident Confidential & Investment Manager - Trident Global Growth Fund, 28 Oct 2011, 9:13 AM

As I have been saying for quite some time to Trident Confidential subscribers, to the point of sounding like a broken record and being the world’s only optimist, the EU debt problem would be “fixed” and the US will not go into recession. I am pleased to report that the Europeans have finally come up with the solution we have all been waiting for.

So, myself and my subscribers were right to take the course we did by buying stocks cheaply in the dips (despite the market and analysts disagreeing) and as such the numbers in the Trident Confidential portfolio say it all, with our holdings up over 4% in the last 24 hours with one stock rising 16% and another 11%, with the average stock up over 4% in one session. The Trident Global Growth Fund was much the same with market-beating rises.Trident Confidential has achieved a return of 42% so far this year.

So what has happened in Europe? As I expected, the EU has decided to forgive Greece 50% of their debt and this has been agreed by the EU banks that hold much of the debt. They have also decided to recapitalize the banks that need it by increasing their tier one ratio to 9% by next year and this can be done by borrowing from the ECB, investors or by issuing more shares. The EU has also agreed to increase the bailout fund to 1 Trillion euros and this will be used if necessary to ensure not only the stability of the banking system, but also to assist any other euro zone country that may find themselves in a spot of bother such as Italy, although progress has been made there too. 

Now, this write-down or restructuring of Greek debt still doesn’t mean Greece is ok now. No, they are still in a mess and hard decisions still need to be made to cut out corruption, the “sport” of not paying tax and the wastefulness of the Greek bureaucracy – a big job and the Greeks won’t like it one bit, but they are now on the right track.

More good news! Last night it was reported that the US economy grew at 2.5% annual rate in the last quarter putting all the bears back in their cave. This was due to increased consumer spending and business investment. This occurred while the EU was melting down. Now we have some positive news from the EU, what will consumers’ moods be like now? Particularly, as the stock market is recovering and people planning retirement can start breathing again. Funny, we have not heard a word from those “experts” who were calling a US recession this year.

With all this news the VIX (the volatility index) has plummeted and is now 25, meaning that traders expect the recent rise to hold, let’s hope it does, but even if there is a pull back from here it can be regarded as a buying opportunity as the longer term prospects for stocks just got a whole lot better today. It looks like 2012 could be a great year for stocks after all :)

Subscribe to Trident Confidential now or

Click here to read more about Trident Confidential

Until next time,

Kind Regards

Lance Spicer