ATM - A2 Milk Corporation Limited

[minimoke]

Turners have been all over the country telling their story in a pretty convincing way but their narrative which has been clearly and thoroughly articulated has done nothing to help their share price !
ATM had very, very little to say about the outlook for FY19 and yet their SP has had one of the strongest months of any stock on the NZX in August.
SUM had a fair bit to say about a positive looking second half coming but their narrative didn't help them.
RYM have been as quiet as a church mouse this month but SP up nearly 16%

Its a bloody fickle market!

[Beagle]

Its a bloody fickle market!

Agreed so a prudent investor hedges his bets

[winner69]

Beagle — are you trying to anticipate what the average opinion expects the average opinion to be?

It’s interesting there is a tendency of punters to flock to certain stocks, whilst neglecting most others. Does this raises questions for the economic theory of rational investor choice?


It could be that “herding” behaviour within the framework of rational choice is in play. Punters maybe are trying to identify when it is optimal to follow the behaviour of others without regard to their own information.

Some narratives are more appealing than others eh

[BlackPeter]

Just curious - why would you think there would be a framework of rational choice shaping our markets? I guess if this is anything to do with the theory of a rational and efficient market - this has been thrown on the scrapheap of history some time ago. There are some good books about behavioral economy around (written e.g. by R. Thaler / Danny Kahneman). If you don't know where to start - try "Misbehaving" written by Richard Thaler.

Markets are a level 2 chaotic system - and yes, herd behavior is for social animals like us humans a very strong motivator (right or wrong). In terms of understanding whats happening - you are normally able to explain what brought a herd to stampede ... but it is often quite hard to explain why they did run into a particular direction. Might be something like that butterfly in Beijing causing a tornado at the US West coast.

Same with markets - don't try to understand them, exploit them!

[ratkin]

Turners have been all over the country telling their story in a pretty convincing way but their narrative which has been clearly and thoroughly articulated has done nothing to help their share price !
ATM had very, very little to say about the outlook for FY19 and yet their SP has had one of the strongest months of any stock on the NZX in August.
SUM had a fair bit to say about a positive looking second half coming but their narrative didn't help them.
RYM have been as quiet as a church mouse this month but SP up nearly 16%

Empty Vessels make the most noise

[winner69]

Just curious - why would you think there would be a framework of rational choice shaping our markets? I guess if this is anything to do with the theory of a rational and efficient market - this has been thrown on the scrapheap of history some time ago. There are some good books about behavioral economy around (written e.g. by R. Thaler / Danny Kahneman). If you don't know where to start - try "Misbehaving" written by Richard Thaler.

Markets are a level 2 chaotic system - and yes, herd behavior is for social animals like us humans a very strong motivator (right or wrong). In terms of understanding whats happening - you are normally able to explain what brought a herd to stampede ... but it is often quite hard to explain why they did run into a particular direction. Might be something like that butterfly in Beijing causing a tornado at the US West coast.

Same with markets - don't try to understand them, exploit them!

Read Thaler’s Nudge ....quite a good read

Maybe a stock is not necessarily popular on account of their inherent value but they become more popular simply because they are already popular

I have a friend whose at LSE in Behavioural Economics - occasionally asks me to guide him to threads on Sharetrader that could provide his students with raw material to help them with their papers

[Beagle]

Read Thaler’s Nudge ....quite a good read

Maybe a stock is not necessarily popular on account of their inherent value but they become more popular simply because they are already popular

I have a friend whose at LSE in Behavioural Economics - occasionally asks me to guide him to threads on Sharetrader that could provide his students with raw material to help them with their papers

Momentum a powerful force. No wonder you have very smart people like KW that are primarily TA and momentum investors.

[winner69]

Momentum a powerful force. No wonder you have very smart people like KW that are primarily TA and momentum investors.

......so fundamentals per se like relative PEs don’t really count for much most of the time

[percy]

Momentum a powerful force. No wonder you have very smart people like KW that are primarily TA and momentum investors.

There are a huge number of "systems" or "styles" or "approaches" to investing.FA,TA,Momentum,the stars,contrarian etc.
Flitting from one to another,than another, is a sure way to confusion, and failure.
I have known very successful investors who only invest in booze shares,while others who only invest in property shares.
Once you have worked out what works for you, it pays to stick with it.

[winner69]

There are a huge number of "systems" or "styles" or "approaches" to investing.FA,TA,Momentum,the stars,contrarian etc.
Fitting from one to another,than another is a sure way to failure.
I have known very successful investors who only invest in booze shares,while others who only invest in property shares.
Once you have worked out what works for you it pays to stick with it.

So true percy but i’ll add, if I may, that one needs to recognise when the ‘system that works’ may one day fail and they need to review what they day