Things have been quite easy on the stock market of late. The index is up from its March of 3500 odd 5200 - the biggest rise ever seen in such a short time. And this has been repeated the world over.
One stock I have tracked all year in this regard is Minerva plc. I bought in at 10p, a company that was in trouble with its finances and a property developer; yet a developer of blue chip London space. I walk past its Walbrook development 9and very cool it is too,) every day and so can see how things are progressing.
I have mentioned it non-stop on blog posts and twitter because of its obvious story. Firstly, the banks would not be so silly as to take it out prior to its buildings being finished, secondly its prime London real estate would only recover in value and finally foreign buyers have been buying into the company for over a year.
It was only ever going to fly and today the shareprice is 44p after new of re-financing yesterday. Having sold down most of my holding at 100% up a month ago I got back in with some funds again when the price was down to 22p. Happy days.
But there are some important reasons behind this lucky strike:
1 - Banks need to lend and have been given QE money to do so, so the chance of a co like Minerva falling over was always less than the market perceived.
2- QE is causing a new asset bubble in property and commodities, so the Real Estate market is picking up a lot more quickly than anyone thought it would, which is helping companies like Minerva.
3. Therefore alot of this gains are down to QE and the mess this is making with the real economy. It saved us from depression, but is going to cause huge mis-allocation unless it is halted in short order; I perceive no chance of that. Which is why I am not selling my share in Minerva today as the backstory has further to run.
P.S. Off to the Bear on business for the rest of this week, back next