Blood in the Streets - The Sequel

Some excellent and rational posts @Jack1960 and @cutty

I’ve thought for some time that it’s a very distorted market that has wrong-footed MFG/Hamish and that’s why I’ve been backing it to outperform in the future when markets settle back to more regular patterns.

And its more than just the passive v active thing going on here too.

‘Alternative’ investments like Bitcoin, BNPL, ‘meme’ stocks, Tesla at a P/E of 300.....there’s been some crazy gains made by investors......a significant number of whom are new to the game since COVID smashed the markets in March/April 2020.

These only make the Magellan mis-steps look even worse.

But these alternative investments are really starting to unravel.

In the past month :

Bitcoin down 25%

Afterpay down 30%

US ‘meme’ sticks like AMC/GameStop down 20%-40%

....even a stock like Tesla which has found its way into many mainstream portfolios has come well off the boil....it peaked at US$1243 in early Nov....it’s now down to around US$930.....that’s 25% down on 6 weeks ago.

So the easy money is drying up and this was (I thought) setting up nicely for MFG to come back into its own.

Unfortunately once a stock (and in MFGs case a fund manager and front man) gets out of favour it can become a bit of a pile on. Funds management can be a fickle business - even more so now I think with the proliferation of impatient investors that have only known this hot market.

I’m a long term holder so I can ride this one out.....but I’m now preparing myself for a sea of red on Monday and a much longer wait (than I thought even earlier this week) for a recovery in the MFG sp

It’s hard to keep your head as an investor in times like this ....but if you opt out of the sellers frenzy on Monday you might be very pleased you did in 2 years time.