The ASX is stuck in first gear, The Motley Fool welcomes another optimist to the ranks, and we re-visit an ice-cold stock that just won’t pop. U.S. markets continue to defy gravity, S&P 500 hovering around a four year high. “The market has been very discomforting for the bears,” said Michael Holland on Bloomberg. “The economy is healing. That’s causing the market to have some resilience.” ‘Discomforting’. So nice, so quaint…especially for an American. In The Australian Financial Review, Aussie Mark Harrison of Macquarie Group (ASX: MQG) called it differently… If the world does end… “There are…
The ASX is stuck in first gear, The Motley Fool welcomes another optimist to the ranks, and we re-visit an ice-cold stock that just won’t pop.
U.S. markets continue to defy gravity, S&P 500 hovering around a four year high.
“The market has been very discomforting for the bears,” said Michael Holland on Bloomberg. “The economy is healing. That’s causing the market to have some resilience.”
‘Discomforting’. So nice, so quaint…especially for an American.
If the world does end…
“There are people in the market who have adopted a massive bearish stance and are frustrated the world isn’t ending. If the markets calm down and everyone starts looking at facts, the Australian market should rally this year.”
Welcome to the ranks of Foolish optimists, Mark Harrison. The tide is turning.
Why anyone would want the word to end is beyond us. At least if it does, the bears and doomsayers will rest well (in their graves) knowing their gold holdings won’t go up in smoke.
ASX: Stuck in first gear, but could rise 30 per cent
So what’s the go here in Australia? By comparison, the ASX is seemingly stuck in first gear. The S&P/ASX 200 index is largely flat in February.
Still, it’s worth putting it in some perspective. Our sharemarket is up 5.5 per cent year to date, a decent start to the year. It just feels like a struggle.
Remember, it was less than a month ago when widely followed Goldman Sach’s head of institutional sales and trading, Richard Coppleson said in The Australian Financial Review he thinks the market could finish the year up by as much as 30 per cent.
When fear and panic hits markets, they plunge quickly. But on the way up, things are a lot more sedate. Times like these are wonderful for practising the long lost art of patience.
Buy, buy and buy NOW
Today we live in a society of instant gratification. If we want something, we slap it on the credit card, and we buy it. Saving up for treats, or waiting until birthdays for presents is so 1980s.
A new iPod? Grab two. And whilst you’re at it, snap up a new Xbox 360 and a flat screen TV for the fourth bathroom…
But the action has slowed.
Banks like Australia & New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corporation (ASX: WBC) have stopped splashing the easy cash. Retailers like Harvey Norman (ASX: HVN) and JB Hi-Fi (ASX: JBH) are suffering. And the sharemarket is not playing ball either…
Instant gratification. We want everything TODAY, including wanting our shares to go up, and go up NOW.
None of this patience stuff. None of this Warren Buffett ‘long-term buy and hold’ garbage. None of this reinvesting dividends nonsense.
We want the next massive winner. We want the next Maverick Drilling & Exploration (ASX: MAD), the next Syrah Resources (ASX: SYR) or the next Alliance Resources Limited (ASX: AGS), all big winners so far in 2012.
We want to be sharemarket millionaires NOW.
Stacking the odds in your favour
Picking such big winners is possible, absolutely. We’re sure shareholders in the big winners of 2012 to date are not complaining.
And here at The Motley Fool, we’ll certainly be on the lookout for more unloved, overlooked, undervalued growth stocks.
We call it the perfect stock picking formula. It’s not infallible, mind you. But it puts the odds in your favour.
(Read on for one such opportunity we’ve prepared earlier…courtesy of our small cap specialist, Peter Phan.)
The boring truth about investing
Investing fortunes are made over years. Boring we know, but that’s the cold hard truth.
Just as you could be forgiven for thinking the Australian sharemarket is in the doldrums (it’s not), you could also be forgiven for thinking the Australian economy is in the doldrums (it’s not).
Instant gratification. We want the local ASX sharemarket to recover like U.S. markets (it might yet). We want the local economy to grow (it has been growing for decades). And we want the next Maverick, Syrah and Alliance Resources NOW (good luck).
The not-so-hot stock that just won’t jump
Regular Motley Fool readers may remember our small cap specialist Peter Phan highlighting litigation funder IMF (Australia) Limited (ASX: IMF) as a stock that could return an average of 30 per cent per annum over the next 5 years.
Instant gratification this is not. From early December to now, IMF stock is flat. Worse, profits have fallen, and management have deferred its decision on payment of an interim dividend. Sounds more like instant wealth destruction than any sort of gratification.
But Peter is not deterred, or perturbed. His view of IMF remains unchanged. In fact, he says the upside potential has increased considerably. As a reminder, Peter is a lawyer by trade. This sort of stuff is right up his alley.
There was a time when Maverick Drilling and Exploration was forgotten, and misunderstood. IMF is no Maverick, but with patience, Peter believes shareholders will ultimately be handsomely rewarded.
Attention: If you are looking for ASX investing ideas, look no further than “The Motley Fool’s Top Stock for 2012.” In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.
Of the companies mentioned above, Motley Fool General Manager Bruce Jackson has an interest in MAD, ANZ and WBC. Click here to be enlightened by The Motley Fool’s disclosure policy.