Tuesday 20 October 2015

Samurai Summary: Top Tweets 20/010/2015

Lately my mind been wandering how come the Chinese stock market crash that happened not so long ago has gone awfully quiet. Yes there are still economic numbers coming out all the time but it would seem as if authorities have taken a back seat and left the market to sort itself out which looks like its helped.

However the guys over at Zero Hedge identified an interesting trend that hasn't been occurred since leading up to the crash. Margin debt has seen its 8th consecutive day of increases as Chinese "traders"  ramp up their attack once again and take on the market.

What's worrying about this development is we've seen the terrible financial consequences of such actions, in some cases pensioners losing their entire life savings trying to speculate on the market but coming off second best. These leveraged "traders"(the reason for the quotation marks is because these people do not possess the aptitude or skill to operate in the market) are the very reason why markets were driven up almost 150% in 6 months only to come crashing back down effectively causing ripples within the entire financial system throughout the world.
Tech giant IBM has reported disappointing third quarter numbers, the 14th consecutive decline in revenues as it battles to restructure its business. Executives of the company tried to highlight the good that would come to the future of the company with the amount of investments it is making in new sectors namely cloud computing however it didn't quell investors tension at the declining revenues coming from traditional businesses.
In other corporate news, it was announced yesterday that Oprah Winfrey has bought a significant stake in weight loss company Weight Watchers buying 10% holding. After the news was made known the stock had one of its best days surging over 100%.

I said in yesterdays blog that I wasn't a fan of following celebrities into stocks just on the basis of them saying it's a buy.  However Oprah could be an exception here with her business acumen and brand that follows holding the key to her success which can be seen in yesterday's announcement.

Although I do think what we saw was a short squeeze in a small stock, I do think there was a significant amount of support for this latest move by the company to bring on board celebrity clout to draw in more customers.
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