Mat’s Investing Blog

It was a little earlier than I expected but the All Ordinaries has achieved the 50% fall in 1 year and 18 days. Here’s to hoping for another 50% from here!

3436.6 is the magic number whereby the All Ordinaries will have fallen 50% from its high on the 1st of November 2007. My prediction: we hit it this week.

When the stock market is rising the cautious few, the value investors and their kin, are allowed to be pessimistic without fear of hurting other stock markets players as no one is losing money. However, due to being cautious the value investors are also labelled as out of touch and are generally derided for not reaping the easy profits that are at hand. 

Unfortunately when things switch around, when the stock markets falls and the other players lose big, then the value investors must hide their euphoria as it would too easily offend. Every time the stock market falls we cheer on and all the while thousands of people are losing everything they have. If we speak out we are lampooned for being inconsiderate and cold but it is simply the way we play the game.

As a value investor it always pays to keep our emotions to ourselves.

One of the things I’ve been saying a lot recently to my close friends is that I’m blessed to have been born at such a time as to have one of the largest stock market movements in history take place in my early adult life. This, coupled with a few of my major traits and my free cashflow, should allow me to profit handsomely in the years to come as I can snap up fantastic companies at bargain prices. It was therefore with keen interest that I noticed a new book being released titled “Outliers: The story of success” which proposes that genius often is superseded by hard work and the timing of your birth. For those eager to know more an extract is available which is quite enlightening in and of itself. With that in mind it’s back to work for me!