one man's feast as "........the australian

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    Hey Guys

    A very interesting article in the Weekend Australian about the ASX in general and it's current oversold position and how it affects our shares...........:)

    Cheers Nectar

    One man's feast as sharemarket crashes
    INSIDE STORY: DAMON KITNEY From: The Australian August 13, 2011 12:00AM
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    SOME curious chatter was doing the rounds of the stockbroking community on Monday afternoon as the sharemarket plunged below the 4000 mark for the first time in two years.

    It quoted an unnamed fund manager who said he was ready to feast on some bargains. "They are warming my main course," he said.

    "The waitress is telling me the slow-cooked pork belly is nearly ready."

    The mystery would-be diner was veteran stock-picker Ian Harding, the co-founder of Sydney-based boutique fund manager WaveStone Capital.

    And on Tuesday lunchtime, with the local market down another 5 per cent and the end of the world seemingly nigh, Harding and his business partners headed out for a bite to eat at the Bavarian Bier Cafe in Sydney.

    His order? The slow-cooked pork belly. The previous Friday, as the local market plunged ahead of the historic Standard & Poor's downgrade of US sovereign debt at the weekend, he had gone into gold stocks and bullion.


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    "I told my team that day, 'Today is just the entree'," he says.

    Harding's Tuesday afternoon feast was put on hold temporarily as the market posted its biggest one-day turnaround in five years that afternoon.

    But by Wednesday he and many others were buying, pushing the market to its best one-day gain this year.

    It ended the four most volatile days of trading on world sharemarkets since the global financial crisis. The roller-coaster continued on Wall Street on Thursday night as the Dow gained 4 per cent. But the bears have not packed up their picnic.

    "On a 12-month view, I think it's a nightmare. It's a continuation of the GFC," says one renowned bear, Morgan Stanley economist Gerard Minack.

    The rout in global markets since July 26 has wiped out $7.9 trillion in equity values.

    Concerns remain about the health of the European banks and the massive debt in the eurozone. The biggest concern is France.

    Belgium, France, Italy and Spain now plan to impose a ban on short-selling or on short positions.

    European bank stocks fell by 10 per cent or more on Wednesday, and there were concerns they were starting to crimp the interbank loans that keep the global financial system running.

    All that is quite apart from the outlook for the US economy following the S&P downgrade and the Federal Reserve's vow to keep rates at rock-bottom for the next two years.

    Some traders in the US are comparing the threat from Greece that triggered concerns about European sovereign debt last year and earlier this year to the collapse of Bear Stearns. The US investment bank crashed in March 2008, six months before the onset of the GFC.

    These bears equate the fragile economies of Italy and Spain to merchant bank Lehman Bros and insurance giant AIG: their collapse in 2008 unleashed chaos on the global financial system.

    But there are some reasons to be positive. The balance sheets of Australian corporates are in good health - a legacy of billions of dollars in equity raisings during the GFC.

    Economic statistics out of China during the week indicated its economy would continue to hum along, with growth rates of above 8 per cent.

    It is factors such as these that prompted Adelaide-based self-funded retiree John Hails to start buying on Monday. He picked up shares in retailer Oroton and the vitamin group Blackmores.

    By close of business yesterday, he was still ahead.

    "You don't panic in these situations," Hails says. "If you're investing for the long term you look at the fundamentals, and the fundamentals haven't changed at all."

    Goldman Sachs executive director Richard "Coppo" Coppleson's famed note to clients on Tuesday carried a giant photo of Sylvester Stallone in the ring with a grizzly bear. Beneath, in bold type, Coppleson declared: "The market has been belted up by the bear trying to get us in the last 21 days. This afternoon we stood up & shouted BACK !!!!"

    This is little solace to retirees such as Hails and others close to retirement with much of their wealth in superannuation.

    Just over a month ago, the median balanced super fund was within 4.5 per cent of its pre-GFC highs.

    According to SuperRatings, the median balanced fund returned 8.7 per cent after fees and taxes in the year to June 30.

    But since June 30 the All Ordinaries Index has fallen more than 10 per cent.

    A hallmark of the past week has been the volatility and the massive volumes pumped up by hedge funds and short-sellers.

    Coppleson declared on Tuesday after the stunning afternoon market turnaround: "I've never seen anything like this before."


    http://www.theaustralian.com.au/business/markets/one-mans-feast-as-sharemarket-crashes/story-e6frg916-1226114114307
 
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