In order for real earnings for stocks to match Wall Street’s estimates, earnings will have to increase by nearly 10%. Considering the average annual increase has only been 4.2% over the past three years, that seems unlikely.
It’s not that the Australian share market doesn’t blink when others are going under. It simply doesn’t drop as much as others in times of trouble.
Many traders convince themselves a losing trade can’t get any worse. But it can. I know, from hard won experience.
It will be the most expensive foreign takeover in Chinese history. The dynamics under this massive deal trend could run for years.
Quant Trader identified plenty of small to mid-tier stocks in back-testing. Many went on to rally by hundreds of percent.
China’s own Shanghai Composite (SHA:000001) performed terribly on the first day of trading for 2016. It dropped 6.9% on the first day of trading.
Investing in a bull market is pretty easy. Pick a stock, and watch it go up. As the saying goes, an incoming tide lifts all boats.
It’s pretty rare that an investment manager becomes a household name. But Buffett is in a league of his own.
I think Australia is heading for a worse-case scenario. And it’s a bigger threat to our economy and markets than any other geopolitical of security risk.
If you’re an investor then you should be looking to invest in stocks on the ASX with a market cap under $500 million.