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uncertainty galore +3

21:02 10-Dec-18


I don't any of the changes amongst the powers that be should be all that surprising, but they are important nonetheless.  Most important is May pulling the vote on her Brexit plan in order to buy more time for changes.  I've argued all along that a complete reversal is the best course in pretty much every way possible, and still hope that's path things take, however slowly.

Also expected was the resignation of India's central bank governor.  Although critics who say that the independence of the central bank is being undermined are right, my counter-argument is that was already pretty much a sham everywhere as they are beholden to the mirage of economic stability in the face of irresponsible governments.  Thus, the only question winds up being how indirect the influence is, and the rest of the world isn't looking much better these days.  My guess is that the symbolic protest will only wind up strengthening Modi's hand and the prospects for Ebix.  For although there will be a price to be paid for lax policy, most of Ebix's businesses should benefit from it in the short term.

Shifting further into the private sector, Resonant announced its first software licensing for fast quad-plexer designs.  Though financial terms were not disclosed, and the market barely took notice, this is a big step for the company.

Less impressive was the dividend bump from AES.  I had been expecting a full penny raise to 14 cents rather than just the 13.65 that those who own shares at the close on January 30th will get.  This puts the AES even further into overvalued territory in my book, though the market does not seem to agree so far.

That's even more important when so many other good values have emerged.  I've already written about GMLP and GLNG, and should have mentioned the relatively steady price of natural gas in the mid $4 range when doing so.  CUI and WPRT, even more so, have shown that market will only reward results in the current climate.  Even so, I will mention that the prices of MX and especially HIMX have gotten crazy low also, for no good reason that I can see, though the latter has always been volatile.  Otherwise, CVA, CTL, BGCP and VOD, which completed its convertible bond redemption at the 97% minimum price, are safer prime value candidates.

So, while uncertainty abounds in the broader world, I continue to see it is enhancing what look certain values.  December is always a tricky month, but it pays to look beyond that.  The only question involves how much risk each of us wants to take on and for how long.