Lazarus! Wed Aug 26

Babcock and Brown Infrastructure, a seemingly broken relic of the financial engineering era, has risen from the dead this morning, more than doubling from 5.8 to 13.5 c. It reported this morning and news of a deal with creditor and operator Babcock and Brown has raised hopes of avoiding liquidation. It's 10 c now.

12.06 pm The US was modestly higher last night along with European indices although it tailed off towards the end of the day. The Xjo is stronger, having misread the overnight action, and we're higher by 38 points.

I've bought some Emeco Holdings at 75, as they resume their rally after a 7 bar pullback. They reported today and there are no surprises. There's also no need for a capital raising. They mention a recent unsolicited offer from a financial investment firm. The market is supposedly sceptical about this, but a couple of brokers consider the stock to be cheap anyway so it's not as though there is a takeover premium built into the price.

12.22 Paperlinx is up 2.5 today to 61. It's the stock I'm most bullish about in the short term and it has occurred to me that maybe, instead of having 6 or 7 positions, I should be increasing my size in these high conviction trades. It's not exactly a difficult idea to grasp but I find it hard in practice to limit the trades I put on. I've just read Moneyball and it occurs to me that I need to be selective about what pitches I swing at.

1.23 Thinking about the Ppx situation has sharpened my focus about the number of positions I have and the confused thinking that it reflects. I'm selling out of Lnc for 143 (v 146) because this is a turn round situation and has had only 3 white candlesticks in the last 5 weeks, hardly the high momentum trade I'm looking for. I can see the possibility of a good rally here but would need to buy towards the end of a strong up day.

2.45 Out of Ipl at 340 (v 330) for no good reason, if I'm honest. I got nervous earlier when it fell back to 335 and sold out, then bought back in etc. I guess it means I've got no conviction on the trade although the chart still looks good to me.

3.01 Out of Lnc at an average of 142.5 (v 146) as I try to limit my tendency to have too many positions.

3.33 Back in Gff at 147 on a resumption.4.52 The market ended with a gain of 49 points. Ppx finished strongly at 64 and Gns looks like it might kick on after a short consolidation.