by Chris Becker
You’d think someone who has commented on markets for their entire career would be able to recognise a bear market when they see one. But it seems the Pascometer is more about ripping into permabears and “crystal ball gazers” – i.e those wacky technical analysts – than sound discourse of the facts and risks at hand.
In his latest missive today, we get the usual quotes and appeals to authority, the obligatory Warren Buffet quote and “markets always rise on average 10 percent a year” combined with continued focus on individual stock picking and a plea that central banks will always do the right thing.
It has a slight Comical Ali ring to it – don’t panic, just buy and hold, central banks will always see us through. There are no American tanks in Baghdad.
Have a read of the full article, but also keep in mind what Marcus Padley (an actual market operator, not a commentator) wrote the other week that the only difference between the average investor and the gurus in the columns is the gurus have nicer ties.
Some chuckle into your coffee quotes below:
When it comes to shares, the herd tends to act in the opposite way: happy to buy when prices are rising and above their longer-term average, scared to buy when prices are down and back to, or below, their normal value.
The current correction has returned Australian shares to around their longer-term value. They could fall further as global markets suffer another roiling. Yet, from a value point of view, it is easier to buy with the main index around 5000 than it was when the market was fixated on gaining the 6000 mark four months ago.
Given Monday’s falls, it wasn’t hard to find companies that fitted that criterion in what looks like remaining a low-yield, lower growth world…
In a similar vein, sometime super bull Charlie Aitken told his followers: “I tend not to worry about the index itself, I tend to focus on stocks. It is a market of stocks, not a stock market. If we pay too much attention to the index itself, we will miss stock-specific opportunities”…
Most investors know at least one of the variations on Warren Buffett’s advice to be fearful when others are greedy and greedy when others are fearful… Too bad so many forget the adages when the panic bell rings.
The present turmoil may well delay the US Federal Reserve’s first little interest rate increase, but this time it’s more likely to be China’s central bank providing the monetary cavalry.
In the meantime, those who wish to panic are welcome to do so.