Thursday, September 9, 2010

Time to Buy British Stocks?: "St. Leger’s Day, London Stocks’ Date With Destiny"

It won't come cheap, here's  Reuters afternoon sub-head: 
FTSE 100 up 1.2 pct to new 4-month closing high
From the Wall Street Journal Europe's The Source blog:

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There’s a horse race in England on Saturday.

A high point in the betting calendar since way back in 1776, it’s called the St. Leger Stakes. If you’re feeling so ‘risk on’ this weekend that you just can’t wait for the markets to get going again on Monday you might like to have a flutter. Sadly, central bankers and finance ministers haven’t got around to underwriting sporting wagers with taxpayers’ money yet, so there’ll be a real chance to forever lose your own unhedged cash.
What novelty. Surely that won’t catch on.

Anyway, this race day is supposedly the time when investors ought to consider getting back into the London stock market after a halcyon summer of doing better things and avoiding the heavy going of scantily-traded equity. The ancient bit of lost-in-the-mists lore advising them to ’sell in May and go away’ follows up with the injunction that they ‘come back on St. Leger’s day’.  And here we nearly are.

Now, this may be the worst sort of old wives’ tale, unscientific hogwash all you sober and rational Wall Street Journal readers can imagine. But, still, anyone who stuck with the plan and sold in May this year (and you can bet some did) is probably feeling rather smart. The blue-chip FTSE-100 index was sitting pretty at around 5800 in the spring. It’s almost 400 points lower now. Moreover, any superstitious folklorists who got out four months ago missed a drop of a thousand points. The index was languishing around 4800 in July. Stocks haven’t been anywhere near the April highs since, either, which must also bring a satisfying glow....MORE