A central tenet of the Fat Prophets investment philosophy is our identification of major long term themes. One such theme that our long term Members will no doubt be very familiar with is our bullish view on gold. When we initially recommended gold bullion as a buy at US$260 way back in 2001, the call also matched our contrarian approach.

Austar has begun to put its 2.3GHz spectrum to use in a deal with Victorian energy business, SP AusNet. Part of Austar’s spectrum will be used to build a WiMAX-based network across regional Victoria that will allow the deployment of smart meters to households and businesses.

A $380 million takeover bid for PIPE Networks is an ambitious step for SP Telemedia, but one that strengthens its business through the acquisition of fibre-optic network infrastructure. The company has clearly opted for network scale and direct control of its most basic cost – capacity – in order to position itself for further customer growth.

When a company launches a major acquisition, it is wise to consider their past form in this area. AMP’s track record is far from glittering given their disastrous UK expansion and subsequent retreat just a few years ago. Nevertheless, its current bid for Axa AP’s Australian and New Zealand business is an altogether more favourable proposition.

We are recommending Members sell their holdings in Tower Australia and switch into AMP. This recommendation is not conditional on AMP’s attempted acquisition of AXA, but the deal would add even greater appeal.

The big four Aussie banks set their share price lows in February this year, ahead of the broader market low of March. After a phenomenal 8-month rally, the banks seem once again to have set near term highs ahead of the market, peaking during mid-October.

The AGM season continues on with many companies simply reiterating previous guidance rather than upgrading. Caution seems to rule the day in regard to the earnings outlook.