ASX Small Caps Lunch Wrap: Who wants a timely lesson in how to hedge your bets?

Aussie markets have opened like a bottle of cheap champagne this morning – an early pop, before settling into a slightly effervescent morning filled with strawberries and bacon and a yearning for a quiet walk and a pre-lunch nap.

We have a juicy surge by the Materials sector to thank for that, boasting a 3.0% leap in early trade this morning with some minnows making massive gains… but more on those later.

But now, let’s dig into a quick story about a man who really knows how to hedge a bet.

They call him Mattress Mack, mostly because he also calls himself that, and that’s because he sells furniture, including mattresses, to the people of Houston, Texas.

What sets him apart, though, is this: Every year, Mattress Mack (real name Jim McIngvale) runs a promotion – if you buy a mattress this year, and the Houston Astros baseball team wins the World Series, then he’ll pay you back the cost of the mattress.

100%, iron-clad, all your money back.

It’s a bold move, because anyone who’s bought a mattress recently will tell you, they are crazy amounts of money. Like, $3000 a pop if you want to lie on something every night and feel like you’re drifting off to sleep on the skin of a still-warm bowl of fresh custard.

So as ol’ Mattress Mack could be on the hook for a lot of money to cover those costs, he hedges that potential payout by betting on that team… and this year, he plonked down millions across a few different bookies.

If the Astros lose, he’s out the millions, but keeps whatever he’s made selling the mattresses, so he’d be breaking even on that, with whatever he’s made from those customers buying other furniture at the same time still profit to keep the store running nicely.

If they win, he’s out the millions for the mattresses, but waaaay ahead by whatever the payout is on his bet.

(Also, gambling losses are, for some freakish reason, tax deductible in Houston – so even if he does do his dough, it’ll lower his tax by a massive amount, too.)

This year, the Houston Astros did something they don’t normally do – they won. And Mattress Mack had his millions spread out over a few different bets with a few different sportsbooks, at averaged odds of $7.50 to $1. Mattress Mack made some serious, serious bank.

So when Astros slugger Yordan Alvarez thumped a 99mph pitch waaaaay up into the stands at the bottom of the 6th, batting in three runners to give Houston a 3-1 lead over Philadelphia, it was pretty much game over – and this is what it looks like when an extremely old man wins US$75 million dollars:

YORDAN ALVAREZ WITH A THREE-RUN HOME RUN TO THE MOON AND MATTRESS MACK HAS LOST CONTROL

(w/ @gallerysports) pic.twitter.com/uyitCDZwzt

— br_betting (@br_betting) November 6, 2022

At Caesar’s sportsbook, he was into them for US$10m at 3 to 1 – a US$30 million payout which Caesar’s said is the largest payout in sports betting history. Cue what an extremely old man looks like when he’s taking a casino for a butt-puckering quantity of cash:

How tweet it is 75 million pic.twitter.com/btaCd8bYY6

— @MattressMack (@MattressMack) November 6, 2022

You can tell by the look on Beaker’s face back there behind the counter that he’s pretty sure he’s going to be fired for letting that sort of money out of the casino.

And so, every mattress-loving American who bought a new one from Mattress Mack this year will get the price of it refunded to them, in full – and you can bet your bottom coil-spring that that’s not going to make much of a dent in the cash Mack’s pocketed.

But he’s not a greedy man, that Mattress Mack. A lot of the money he’s won this year will go towards providing mattresses for first responders and  US armed forces veterans and next year, he’s going to do it all again.

Just thinking about winning US$75 million on a bet has me feeling like I need a lie down – but, there’s a whole big ASX lunch wrap to write, and I’d bet my last pay cheque that if I went for a lie down before it was done, my last pay cheque would absolutely be my last pay cheque ever.

 

TO MARKETS

The ASX opened with a jolt this Monday morning, jumping 0.7% before easing to hover around a 0.45% gain, with the bulk of the juice for the morning jump coming direct from the Materials sector.

The miners have delivered some real gems this morning, adding to a 3.0% increase in early trade, streets ahead of the rest of the sectors – Energy up 1.5%, the Consumer twins up 0.74% for Staples, and 0.65% for Discretionary.

InfoTech is struggling to gain traction, though, slipping 1.41% and Financials is holding the overall index down, dropping 1.09% early in the session.

Up in the lavish confines of the corporate boxes, where the rivers run red with the finest of burgundies and the jet skis are all covered in gold (and tanning oil… gross…), there are a couple of big players making some chunky moves.

Capricorn Metals (ASX:CMM) is up the biggest this morning, climbing 9.4% on news that its Mt Gibson Mineral Resource has expanded – again – this time to a gold-tooth-cracking 2.8 million ounces.

De Grey Mining (ASX:DEG), De darlings of De market because Dey have all De gold, is also up, adding 8.33% on no particular news, while Evolution Mining (ASX:EVN) has grabbed another 7.5% this morning, also on no particular news out of the ASX today.

Taking a few blows to the kidneys (and throw a couple in for me, while you’re there, people!) are a couple of the Big Four Banks – ANZ (ASX:ANZ) and Westpac (ASX:WBC).

Westpac released its annual report today. It is 340 pages long – so I’ll level with you: I made it to page 4, where it says Westpac’s cash earnings have fallen by more than $5 billion in the past year, so I’m gonna go ahead and blame its fall on that.

340 pages. Really, guys? Sheesh.

ANZ on the other hand has no excuse. Its annual report has been out since the end of last week, and – oh. Yeah. Better than Westpac at a glance, but still not great, and it’s been sliding since its report… a mere 259 pages… came out.

ANZ is down 3.7%, Westpac is down 3.4%.

And with that, probably best we skip town to see how things are going overseas.

 

NOT THE ASX

It looks like Wall Street decided to shake off its worries and woes and get back into the business of making some money, turning the ‘let’s get funky’ dials up to 11 and blasting out a solidly positive day.

In light of the ongoing recession and inflation fears, the results were pretty healthy – the Dow finished 1.26% higher, the S&P put on 1.36% and the Nasdaq split the difference, climbing 1.28% for a positive end to the week.

Likewise, Asian markets ended friday in a reasonably healthy state – especially Hong Kong, which cranked out a massive +5.36% rise, with Shanghai also well into the black, by +2.43%. Japan’s Nikkei was the outlier in the region, falling 1.68% for the day.

However, this morning things are looking better in Japan, with the Nikkei up 0.65% in early morning trade, on news that Ramen Noodles remain the prevailing unit of currency in US prisons, since cigarettes and hard drugs were banned by authorities.

In commodities, it’s a bit of a mixed bag, because holy moley, natural gas prices have gone completely bananas. Gas is up 9.02% so far today, while oil has fallen more than 1.5%.

For lovers of expensive shiny things, the news isn’t so great. Gold is treading water at +0.05%, however silver and copper are sinking like Spanish galleons into the sea, down 0.86% and 1.68% respectively.

In CrYpT0-Wrrld where everything’s starting to look like a $10 million punt on a baseball game, news that another major token is looking like a bit of a Luna has rocked the crypto scene.

Everyone’s favourite crypto guru, Rob “The Short Stop” Badman has all the goss on why Binance is tipping out of the FTX token FTT as fast as its cryptic little legs can carry it. It’s well worth a read.

At a glance, though: BTC, ETH, Doge… well, just about everything is down over the past 24 hours, after what looked like a solid performance over the weekend.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for November 7 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

WordPress Table
We kinda saw this one coming when Novatti (ASX:NOV) dropped a major hint, going into a trading halt last week because it had ‘news from the Australian Prudential Regulation Authority about a restricted banking licence’.

The covers have come off and Novatti announced this morning that it’s been granted a licence, and is set to launch International Bank of Australia, which it will hold a 91% share of from the outset.

There’s tons to unpack in there and now’s not the time to do it – but the basic upshot of it is that Novatti has gone rocketing up 54% so far today, to $0.285 at lunch time.

Novatti’s sitting on top of a winners list that is remarkable for the fact that as of lunch time, there are five companies boasting 40%+ gains for the morning.

Alicanto Minerals (ASX:AQI) is up 47.3% this morning after telling the world that it has hit visual sulphides at the Greater Falun Lithium Project in Sweden.

Fun Fact on this one: The original Falun mine that Alicanto’s project is based around had been in operation for close to 1,000 years before it was shuttered in the 1990s – and nobody had performed any modernised exploration of the area at all. Amazing.

Jameson Resources (ASX:JAL) is up 46% today on news that it’s secured a strategic $10m placement, at a subscription price of $0.1155/share, which is a premium of 70% above the volume weighted average market price calculated over the 15 trading days on which trades were recorded immediately before the date of the Placement agreement which was a price of $0.679/share.

This one’s a bit of a mystery, but KneoMedia (ASX:KNM) is up 44% on reasonable volume but no ASX-reportable news.

And rounding out the over-40s for the morning, it’s Trek Metals (ASX:TKM) up 41% this morning on news of a bumper set of lithium assays from its Tambourah project, with the numbers looking like this:

• 3.07% Li 2O in hole TKL0045
• 2.69% Li 2O in hole TKL0042
• 2.36% Li 2O in hole TKL0095
• 2.28% Li 2O in hole TKL0044
• 2.11% Li 2O in hole TKL0083

It’s had investors diving in all morning, but seems to have settled in at a comfy spot at $0.09 a share.

Losing a ton of ground this morning after a couple of days charging hard up the wing is HitIQ (ASX:HIQ), which has given up a big chunk of last week’s gains, on the heels of a renouncable rights issue prospectus which pushed HIQ down nearly 29%.

HIQ is looking to raise approximately $6.35 million before costs through the renounceable pro-rata rights issue to Eligible Shareholders of up to 211,870,429 new shares on the basis of eight new shares for every five shares, at an issue price of $0.03 per new share together with one new option for every new share subscribed under the offer.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for November 7 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

WordPress Table