As regular readers know I have a dual passion for investing and music and further to my last post which featured Supertramp and Crisis What Crisis, I thought I would inflict upon you some more of my Dodgy musical taste - they were a band too incidentally and apparently they are still going and even on tour soon. If that is of interest click the not at all dodgy link above to find out more.

So in the same way that Radio stations tend to do count downs of various musical genres on Bank Holidays to fill up their airwaves, like Radio 2 Beatles versus Elvis today I'll do the same with my blog. So with that in mind for a bit of fun I thought I would try and come up with my own count down of vaguely market / investment related music. So here goes in reverse order, click the highlighted links to watch / listen if you want to.

10. Staying Out For the Summer - Dodgy - which could relate to the old adage of sell in May and go away?
9.  What Goes On - Velvet Underground - Starts What goes on in your mind - has to be a reference to behavioural finance?
8.   Money - Pink Floyd -   A classic track and what Investing is all about at the end of the day?
7.   Wall Street Shuffle - 10CC - A classic tune may be about their investing experience as it was recorded in the 1970's?
6.   Boom Boom Pow - Black Eyed Peas - A good description of what happens at the end of a market cycle?
5.   Money For Nothing - Dire Straits - What people think they can get at top this stage of a cycle?
4.   48 Crash - Suzi Quatro - The original rock chick in her leather cat suit and the % correction you may get after a boom?
3.   Down Down - Status Quo - The old geezers and what happens to share prices in a bear market?
2.  The Only Way is Up - Yazz - Technically she sang about property but could refer to shares after a bear market?
1.   Mr. Blue Sky - ELO - Could refer to those hyping loss making stocks and what everyone wants on a Bank holiday!

Have a good one - rock on and let's hope it doesn't turn into a Boulevard of Broken Dreams and we get a Green Day tomorrow and given how my mechanical Scores portfolio perhaps I should get someone to  Wake me up when September Ends? In the meantime feel free to add your suggestions in the comment section if you are bored.

Or a contrarian idea for you. Now it cannot have escaped your attention that commodity prices have been under pressure for a while now with the oil price halving last year for example. This has also been the case for industrial commodities like copper, iron ore and also gold too. The net effect of this has been pretty disastrous for the oil & gas and metals and mining sectors.

Indeed we saw further falls in the mining sector yesterday, along with the rest of the market as it happens, but this took the sector down to lows last seen at the depths of the crisis in 2009. This has stirred some contrarian interest on my part, so I thought I would do some digging of my own and share with you what I have dug up.

Here is a ten year chart for BHP Billiton (BLT) which is something of a bell weather for the broader mining sector given its diversified nature, although they have focussed a bit more recently with the disposal of some non core assets via the demerger of South 32. As you can see it is not quite back to its lows of 2009, probably reflecting the slightly better quality of their operations versus the sector overall.

In terms of its rating it currently stands on nearly 20x for the year to June 2016 with a big decline (more than halving) of earnings already baked into the forecasts. Despite this the dividend is forecast to be up by 5% this year before being flat may be in 2016 despite cover collapsing to less than 1x next year. Thus there could be a risk of a dividend cut which the 7% or so yield is starting to factor in, although their dividend policy form the report and accounts is as follows. "We have a progressive dividend policy that seeks to steadily increase or at least to maintain the dividend in US dollars at each half-yearly payment." I note they did maintain their dividend during the last downturn in 2009, although they had much greater levels of cover as mining was still in the midst of its so called super cycle back then.

Talking of which I read an interesting article the other day which suggested that the mining sector or rather demand for industrial commodities is really reflecting the reality of underlying economies, demand and supply balances and deflationary pressures. Whereas financial markets are in their own super cycle these days being boosted by liquidity from central banks and resultant demand for financial assets. Thus ironically the miners might be better able to withstand a withdrawal of central bank liquidity and rising interest rates than other sectors as that might then indicate a more sustainable pattern of growth in the world which could be good for commodities.

Any way I digress lets get back to digging for value and yield. An alternative to BHP Billiton would be Rio Tinto (RIO) another diversified mining group. They actually look better value on around 16x this years earnings although their yield is lower at 5.6% to 5.8% as their cover is expected to remain above one and there may therefore be less risk of a dividend cut. Failing that if you are a gold bug and wanted to get really speculative you could always check out a Zimbabwean Gold miner - Caledonia Mining (CMCL) which has reported first half results today, although the recent fall in gold price makes that one less attractive now.

But as Status Quo sang - Is there a better way? Well regular readers will know I am a keen on investment trusts (as well as music) and there are a few ways you can play the sector via these. One I would highlight is the biggest most liquid play in the sector - BlackRock World Mining (BRWM) which has a market cap. of over £400m and stands at a discount of around 7% or so to its estimated Net Asset Value. So not only can you pick up a diversified portfolio of miners (if you want to) at a discount (including 10% or so in both BLT & RIO) but you also get a yield of 8.5% based on the current 21p dividend and a 245p share price.

Now that dividend is not cast in stone as the dividend from this one has been quite variable over the years (see page 7 of the report and accounts) and they did last cut it by nearly 14% back in 2009. in recent years they have introduced more of a focus on delivering a yield, although this did mean they messed up a bit by getting too heavily into some royalty schemes which didn't work out so well. Putting that to one side though the other attractive feature is the fact that they have revenue reserves (which can be used to pay and smooth dividends) equivalent to about 140% of the cost of the dividend. So if the manager and the board do their job then barring a complete collapse in mining dividend generally then they should at least be able to maintain or only slightly cut the dividend again.

Summary & Conclusion
So in summary the attraction here is that you can get a professionally managed and diversified portfolio of miners at a discount, plus a bit of gearing (12.5%) and with a yield that is greater than some of their main holdings and arguably better covered given the revenue reserves. Quite useful if you don't have the desire or inclination to get your head around metal prices and commodity cycles, but would like some longer term exposure as part of a diversified portfolio. If you did - then this seems like a good way to get it. The other reason to think about it now is on a contrarian basis as the sector has done so badly for the last six years or so and the yields available seem to indicate some value. However, as ever with investing no guarantees that it won't get worse and that the dividends and share prices could go down as well as up etc. but certainly one to put on the watch list. Personally as I was in need of some losses to offset against some of my gains I sold my BHP Billiton and stuck the proceeds into this for the reasons stated above.

Any way if that has whetted you appetite you can check out their site at the link in the name of the trust above where you'll also find a copy of their annual report and fact sheets etc. If not (did I mention I like music?) as a reward for getting this far, I'll leave you with some music, which hopefully you'll enjoy, as it is a fine album appropriately called After The Gold Rush by good old Neil Young.

...on my own (hmm I do believe that is a song) - as I'm about to suggest going Against the Grain (RIP Rory) and over ride my Compound Income Scores. Before that an apology for the late post today. This was due to a fault on my Broadband which I had to get sorted with an engineers visit this morning hence no internet. This explains the poor quality of my interview on the podcast yesterday with bits dropping out.

Any way the stock concerned today is one I got into recently thanks to the Compound Income Scores and the fact that it had made it into the Compound Income Scores Mechanical Portfolio. This was Alliance Pharma (APH) which I wrote up a few months back when I suggested it as a buy on weakness below 40p. Fortunately I followed my own advice and bought into this one when it then dipped below 40p. I must admit I was not expecting much from it in the short term apart from collecting the final dividend as it has been a pretty pedestrian stock in recent years. However, I was hopeful that it might be able to re-rate gradually and perhaps hit 50p.

So I was pleasantly surprised in recent weeks when it not only went XD the final but has stormed through 50p without much in the way of new news apart from a positive sounding in line trading update earlier this month. They have however continued to talk about doing more deals, so perhaps a deal is on the way and they have ramped up ahead of this or perhaps it is just a genuine re-rating – I guess as ever time will tell.

Looking at the chart however it is now quite extended and overbought. So with the shares now also looking more fairly valued on 15x with a 2.2% yield plus given not much has changed and this one does have a habit of flat lining like its earnings, I have exited up here. However, as it continues to score well with a CIS of 96 so it is likely to remain in the Mechanical portfolio for now. So I'll be able to see how it does and repent at my leisure for selling a winner and going against momentum and the Scores if it goes onto deliver much greater returns!

So with the title of this piece in mind here is another music video for you to go with the Rory Gallagher link at the beginning. For younger readers he is no relation of the Oasis brothers but was a great Irish guitarist who sadly died too young but is worth checking out if you like rock music and you are not familiar with his work.

Talking of music I saw reports on some "interesting research” from professors in Cambridge about how your personality type might explain the music you like. It seems analytical types might be expected to like rock music and this report about it seems to confirm that I almost certainly fall, unsurprisingly, into the analytical category as the Spotify play list included within it mostly rocks as far as my analysis is concerned, although I draw the line at The Prodigy & I'm not too sure about Art Ensemble of Chicago (too jazzy for my taste) or Red Velvet (too poppy).

Finally, on the subject of play lists I have found the BBC play lister gadget on their on line radio service quite good for saving tunes you like and new music which you might otherwise hear but not have a clue who it was by. I have discovered quite a few good new artist this way – so if you like music too then it might be worth checking this out as you can also then share it with Deezer, Spotify and I-tunes and playyour saved tracks there too, which is quite cool.

Any way sorry about all this chat about music as I'm sure most of you are not here to hear about that  - perhaps I should set up a sister site to talk about music? But just to show I'm not completely stuck in a rocky rut as far as my music is concerned check out this fine new album called Pageant Material from a country singer called Kacey Musgraves – yea ha have a great weekend ye' all.