Market serves up some savage volatility
I recently surveyed our portfolio and was stunned by the magnitude of the daily price moves. It was only 1.50pm yet APN Outdoor was up 4.32% on no announcement, TradeMe was down 2.77%, Healthscope was down 2.64% and Challenger down 1.92%.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Damian Johnston
:
Hi Roger!
what are your thoughts on TPG at the moment ? the company looks to be getting hammered on the market at the minute trading at around 45% off there 52 week high.
Chris
:
The reason for it is simple. Short selling – take a look at what happened the afternoon when Trump got elected, the market falls 4%, then the next morning, it’s back again. Nothing changed, so there was no real reason for it !
Kelvin Ng
:
Hi Roger, this is the latest from Jeremy Grantham on whether stock markets are in a bubble or not. The options he gives himself are a 2 year burst, a 7 year decline, or a 20 year whimper. He favours the 20 year whimper:
https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf?sfvrsn=36
Kelvin
Chris
:
APN Outdoor was up 16% today (!) and not for any real reason apart from reaffirming their numbers; REA had a good day too. CAR has been absolutely smashed.
It’s all happening and there’s no real good news or bad news either way.
Rick Henniker
:
Thanks Roger for another great article. Do you have any insights as to why McMillan Shakespeare is down about 30% from its recent highs?
Roger Montgomery
:
The sell off really began with the release of the FY16 results, which missed expectations slightly but a line on slide 4 “year Ahead” of the presentation pack read: “Continue organic growth via…retention of contracts…*with the exception of a major contract, which is currently being tendered…”. The prospect of a lower margin – even if the contract is retained – was responsible for the large part of the slide. Since then, rising bond yields and ‘finance’ and related companies tend not to mix well, even though Westpac has just revealed motor vehicle loan delinquencies fell in the most recent period.