By Jason Fittler
Last week marked the two-year anniversary of the March 2009 low caused by the GFC.
The ALL Ords hit a low of 3090 on the 10/03/2009, two years on the market closed at 4791. This is a return of 55% over the two-year period.
At this time, fear had taken hold of the market, but this was not just the average Mum and Dad investor. Even the professional research analysts were trying to cover up poor recommendations by making calls to fit the market trend.
On the 09/03/2009, RBS Morgan’s banking analysts came out with an underweight banks call. NAB which was a sell in this report was at the time trading at $15.85 and is today trading at $24.74 you would have also received $4.25 in fully franked dividend giving you a return of 83% on NAB over the past 2 years.
The point is not to have a go at our old dealer group but to highlight the risk of believing your own media hype. Even the professionals get caught in the short term, media influenced hype, throw away all logic and reasoning.
To be a good long-term investor you need to have a sold fundamental grip on what make up a good business. A good business is a good business regardless of the share price and the Australian Banks are good businesses.
I have attached to this newsletter the newsletter I put out on the 10/03/2009 (PDF Download) and the 03/03/2009 (PDF Download) so you can see for yourself my view on the market back then. Just for fun, I have included the returns on the two stocks I was recommending back then Origin Energy and ANZ. But, what is important to read is my market commentary and view on the market at the time.
Origin Energy - return since 2009 is 31% (View original article on Origin)
ANZ - return since 2009 is 114% (View original article on ANZ)
At MINC Townsville we not only look at independent research but we also perform our own fundamental research on the businesses, reviewing their company assets, cash flow, return on equity and intrinsic value.
Through this method, we are able to find good long-term opportunities for our clients.
But, more importantly, we block out all of the media noise and hype, which is where most investors lose their way, and their money.
For more information contact us on 07 4771 4577.