The market is up 7. The SFE Futures were up 12 this morning.

The Dow Jones closed up 29 overnight. After 8 straight days of losses, the index avoided what would have been the longest slump since 1978. Talk is that the Fed is considering further stimulus measures to prevent another recession. Three former top officials at the Federal Reserve said that the Fed should consider a new round of securities purchases to boost growth. The Dow was down 166 prior to this news. Economic data was disappointing, metals were mostly down on the LME and the oil price fell $1.86 to $91.93. The $A was up 8c to 107.68c.

In the news today…

  • Leighton Holdings (LEI) raised its profit guidance for 2010/11 saying they now expect an after tax loss of “around $408 million” which is better than earlier guidance of a $427m loss. LEI up 3% to 2065c.
  • Transurban Group (TCL) – Annual profit up nearly 90% to $112.5m, as revenue from tolls rose 10%. TCL raised its dividend to 27c for the year to June 30, up from 24c the previous year. They said strong traffic growth on CityLink in Melbourne after upgrades was key to the higher revenue. TCL 2c to 513c.
  • Credit Suisse cut their recommendation on BHP Billiton (BHP) to Neutral from Outperform.
  • Toll Holdings (TOLL) has appointed CFO Brian Kruger as the company’s new managing director to begin on January 1 following the retirement of Paul Little. TOL up 2c to 446c.
  • Spotless Group (SPT) will retain its business, Braiform, following unsolicited approaches from potential buyers. SPT said it had initiated a process to explore the possible sale of the business but decided against it. SPT up 1% to 204c.
  • Westfield Retail Trust (WRT) said they will pay a half year distribution of 8.1c for the six months ending June 30. WRT up 2c to 244c.
  • Energy Resources of Australia (ERA) will spend around $120m exploring an untapped deposit that could extend the life of their Ranger mine in Northern Territory. ERA down 5% to 410c.
  • Newcrest Mining (NCM) has announced that nine people have died when a helicopter flying to one of their mines in Indonesia crashed. NCM down 1c to 4074c.
  • DUET Group (DUE) has launched a $277m entitlement offer to pay down debt after buying and selling assets to simplify their structure. DUE is in a trading halt and last traded at 160c.
  • Commonwealth Property Office Fund (CPA) has sold a 50% interest in 5 Martin Place, Sydney. CPA was recently upgraded by a broker to Outperform from Neutral. CPA up 2c to 96.5c.

One of the lessons from the GFC was that although a lot of people quote the rather arrogant Buffettesque principle that you should invest on the basis that you could close the market for ten years (arrogant because only the very wealthy could possibly be that patient), the truth is that you can’t close the market for ten years. The consequence of ignoring the market for 18 months in the GFC was that you lost 13 years’ worth of average returns. In the real world you have to do better than that. No-one can afford to lose 13 years of financial returns in any retirement timeframe.

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