*Edit: Sorry, was still typing when the thread closed.
I've seen mention a few times over the past month or so about the recent short attention span of the markets, with very short "hot" sector runs but I've been too tight on time recently to post much. While there has been a trend over the long term (decades) for holding times to reduce somewhat, I think what we've seen over the past 6 months or so isn't a change of the market's attention span. I think we've just seen a few sectors which didn't deserve a sustained run. For example:
Uranium: We saw the Uranium price finally bottom and then go for a little run. Stocks followed suit but the uranium price flattened out reasonably quickly, so there was no real reason for a sustained sector run.
Cobalt: unlike uranium, cobalt prices have gone on a pretty serious run over the past year, so it's no surprise that money started being wrecklessly thrown at stocks with any mention of cobalt. It's also not surprising that it has run out of puff quickly, simply because there is not a single stock on the ASX which has drilled an economical cobalt resource that doesn't entirely rely on a different commodity. Every stock boasts either a very low, far from economic grade or has not completed a comprehensive drill program. Most haven't drilled at all and are relying on historicals. Historicals on most other commodities barely raises an eyebrow, it's great for a bit of speculation but not enough for a sustained run. More than 6 months ago, Cobalt was being talked about quite a lot and we were seeing large gains in the spot price but it was the same problem then, there just weren't any great projects yet.
Medical Marijuana: We saw huge surges in prices of medical stocks but this was only due to some legislation changes. The stocks themselves haven't had time to start approaching serious revenue and prove themselves. They'll no doubt go for a second leg in the future but we saw some pretty high valuations considering they're still at such an early stage. Furthermore, being a new sector, there aren't directors with runs on the board in that space that people will invest in, with conviction. There also isn't quite as much of a barrier to entry as some other sectors. It's safe to assume the licensing process is a nightmare, but I can be reasonably confident it would be a lot easier to get a MM company up and running than it would be to prove up an economical resource and get it past all the hurdles on the way to production. Large institutions stick to what they know, what is safe and generally invest on a longer term time frame, so it will take some time before we see any billion dollar MCs.
My point is, if the next hot sector has a fundamental reason for a sustained run, I think it will happen. Until then, I think we'll just see a few more short legs in cobalt, MM, gold, tech, etc.
