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Market Comment - December '09

December 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

This time last year we highlighted a number of key issues: that smaller companies, having adjusted their cost bases, were very highly geared to a recovery “teased out by interest rates at levels not seen since the 17th centuryâ€; that over the prior 30 years the average price earnings (PE) ratio for smaller companies was 14, “whereas now we are at a low edging towards 6.5â€; that ratios of director buying were very high; that last but not least “we should reflect on the truism that historic falls create historic opportunities.† Reading strategists’ notes in recent days, many have the “good riddance to 2009†tone and suggest greater certainty in 2010. We're not so sure. Sharp market falls are usually followed by s ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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