The Yankee,Aussie market problems you mention are due to a few...

The Yankee,

Aussie market problems you mention are due to a few key reasons :-

1) average Australian is economically illiterate when it comes to investing. This includes housing where emotional reasons are about all that is considered. The question ''am I paying too much'' is more or less ignored totally.

2) Hedge funds and shorters can run riot as a result of 1) and they don't rest. Too many Aussie investors sell simply because others are selling - they lack the skills to do FA so are easily led. AND THEY ARE LED.

3) These issues disappear to a large degree once dividends start to flow or the stock goes into something like the ASX200 say. That is big funds are less susceptible to the games and own a bigger % of the company than before.

4) BOTS are used to make the fall in price more efficient with constant 1 share falls being allowed. If these were outlawed things would improve to a degree. When a minimum brokerage charge existed, per separate transaction, this problem was far less apparent.