Woodside, page-4021

Martin Conlon, head of Australian equities at Schroders, is BEARISH on Australian Equities.

"Conlon argues the momentum thatpropelled the market higher now seems to be adding to the speed and size of its recent fall. “Whenearnings momentum, particularly in market darlings, reverses, the price levels at which fundamentalinvestors will step in to buy from momentum investors can create some significant air pockets.”Conlon’s biased, of course, but he sees an opportunity for value investors to shine by finding the unlovedstocks that have been missed in the momentum movement. “Longer run earnings expectations look veryoptimistic and stocks with huge amounts priced in for the longer term look incredibly risky. While ithasn’t been right – other than in recent weeks – relatively low multiples combined with some self-helpon improving cost structures seem the most sensible avenue.”