Shortlisted – 6000 target and Harvey Norman

Editorial director of Switzer
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It’s always good to keep on top of the day-to-day movements in the market but you should never forget the big themes as well.

The big picture

Over the next three months, there are a number of factors that savvy investors should keep a track of, according to SSR expert Paul Rickard.

First he suggests we keep an eye out for the Medibank private listing. This is due later this year and the offer documents could be out as early as next month. Paul wrote about why he’ll be putting some funds aside for this IPO back in March.

The ASX S&P/200 is also edging upwards, towards our target of 6000 but don’t forget that September and October are typically known for being bad market months. It doesn’t always turn out that way but they still carry that stigma.

And finally, with the US economy showing all signs of picking up, we expect a rise in the US dollar, and a fall in our local currency, to be not that far off. This means you should be positioning your portfolio for companies that should do well from a lower Aussie. We started positioning our SSR growth portfolio for this some months ago, and while it is yet to play out, we believe it will soon and Peter Switzer names some specific stocks in his article today.

Harvey Norman

Harvey Norman (HVN) chief Gerry Harvey, who has been accused of being a luddite by more than one media commentator, joined Peter Switzer on the Switzer TV show last week to talk about the company’s 48.9% jump in net profits after tax.

“I don’t think it was that great. The market thinks it’s better than I do but I’m looking forward to a better result this year and the year after,” he said.

“We’ve repositioned our business and I think now were back on the comeback trail.”

But he was also quite candid about his recent acquisition experiences. Mostly he’s been successful but Clive Peters was another story.

“Looking back on it, I probably should have been certified for doing that…the way it turned out, it was just a bad decision,” he said.

And he also told Joe Hockey that being Treasurer didn’t appear to be too good for him.

“[I said] you used to be such a lovely fat, happy bloke and now you’re mean and lean and you’ve got this worried look on your face.”

But for investors, he justified Harvey Norman’s failure to return franking credits by explaining how he felt unconformable borrowing the money necessary to pay them out.

“I’ve got to feel comfortable about that,” he said.

“It’s that level of comfort that I don’t want to be attacked. I don’t want to be lying in bed at night wondering if I can pay the interest bill.”

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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