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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

a dangerous place « Previous | |Next »
August 13, 2011

Markets go up, markets go down, markets go up, markets go down. Volatility, or rather rounds of volatility, is normal for the stock market. Some roller coaster rides are wilder than others due to the intensity of rumour, fear, greed, panic and speculation by spooked gamblers always on the lookout to make a quick buck by betting against some trend in the repricing process.


To play the market successfully you have to know what you are doing especially when economic conditions are in the global economy are rough --as they are now due to the prospects of low growth and the limited capacity of governments in the US and Europe to provide any form of stimulus.

So there can be periods of negative returns due to savage declines and hopeful rallies. The talking heads in the finance industry--'investment strategists'--- are always so hopeful and optimistic. Stock markets always over shoot, It's just a bit of a downturn at the moment, the natural cycle of growth will soon kick in. Boom times are just around the corner.

Well, the whingeing retailers in Australia don't happen to think along the lines of the investment strategists. They reserve their deep felt angst for the customer with a bad attitude--those who save rather than spend, demand heavy discounting, and buy goods online overseas rather than in Australia; all during a mining boom that is stretching the capacity of economy, stoking inflation and threatening interest rate rises.

Still, you sure had to be fast last week to grab the bargains that sprang up when the stock market nosedived (I just love all the metaphors for the stock market).You would have to be sitting a the computer screen trading stocks all day out thinking the high-frequency trading systems programmed to get in and out of the market in the blink of an eye.

| Posted by Gary Sauer-Thompson at 10:23 PM | | Comments (2)


I have a pitiful handful of shares. The ones that came with the NRMA float.

I'm firmly of the opinion that (apart from the crazy "bubble" times"), it takes money to make money. If you have the funds to cover the market properly... what you lose on the swings you gain on the roundabouts. And what you actually lose can be minimised by some tax fiddling.

The market is rigged in favour of the big players. Everyone else is just along for the ride. Someone like Tony Abbott might call it "class warfare" or a "wealth redistribution scheme"... but I doubt it.

I ran into a person the other day who was complaining that the inequality problem is really an ownership problem, and if ownership was more widely spread, income inequality would be much less.

I suggested that compulsory superannuation has completely revolutionised ownership in Australia. More Australians are owners (via shares held by super. funds) than ever before. And the new owners are doing very poorly because of it.

There was no reply.