Market Madness

This market is crazy at the moment and I really am not enjoying it. If I had a large cash pile and no equity positions I would take great pleasure in grazing on some bargains. But as I, as always, am 100% invested it is a bit disheartening watching the market ignore solid results and keep pummelling the share prices of companies I own.

RBS and CSR reported this week, two companies who share prices have already been severely punished.

RBS's results were totally solid and the share price remained flat.

CSR reported solid results and a slightly worrying outlook and the shares dropped 20%! So CSR is now on a 2008 PE of 7.

The problem with CSR is that it has guided for a flat H1 in 2008 and slight growth in H2. This is not growth company performance. So CSR is now not a growth company but has no dividend or share buyback scheme. No wonder the shares have lost their popularity. Still I would have thought they deserve a forward PE of more than 7!

There are exciting products in the pipeline and if CSR can manage to deliver on some of their promises then the share price will recover.

These are troubled times on the stock market. They remind me slightly of early 2003 when the market fell because of the threat of war in Iraq. When the war actually started the market recovered strongly. Now the market is falling because of the threat of recession. I expect that if the recession actually starts or if even better the growth rate of the economy picks up then the market will recover quickly.

For now though I will be watching my portfolio from behind the sofa!