Trading games until announcement, page-415

An interesting article in the The Australian today; reading it goes some way towards explaining what may be behind SGH unprecedented SP decline over the preceding eight months and it offers good insight into what might lay ahead.  The article is not about SGH, its interest lies in value investing, but it is plain to see some of the points raised reflected in our experience of SGH.

My take on a few notable points:

* hedge funds (short & long) have become more powerful through access to cheap funding; there objective is to exploit extreme volatility

* deviation from fair value to the upside and downside is becoming more extreme; due to targeted pushing to the downside on stocks, when they bounce they bounce hard in a short time period, much of gain is achieved in a matter of days not years as those placing pressure on a stock reverse sentiment;

* patience is vital or may miss those massive big days where most of the gain is realised

* companies that are less susceptible to economic downturn, track record delivering on strategy and undervalue due to bear market panic are good choices to consider

Well worth a read...

http://www.theaustralian.com.au/bus...s/news-story/86dcfdcb10fd7ddd99df3856748aafe8