Investor Points of Few – And Not A Single Damn Was Given That Day…

By Alan Steel


I’m not entirely sure why, but the stock market’s recent return to volatility (read: normality) leads me to that war-wizened, relationship-wrought leveller spoken by Rhett Butler to a very temporarily inconsolable Scarlett O’Hara in Gone with the Wind:

“Frankly, my dear, I don’t give a damn.”

Now, maybe I’m seeing an equals sign here between “that scene” and “this market” because Rhett had finally arrived at the realisation that his erstwhile bride was a bit of a self-obsessed loon.

And methinks that’s a somewhat inevitable relationship-based conclusion for those of us married to the investment business.

What I mean is that this type of maddeningly cyclical stock market sociopathy will repeatedly defy logic as much as performance indicators in a kind of ineffable “Scarlett Index” of sorts; whose deeper motivations are as colourfully opaque as the sky before a hurricane.

Jings! Maybe that’s the reason crowd thinking and market movements tend to move in opposite directions.

And suffer the contrarian mind, which must simply accept Scarlett’s temper tantrums with a sort of resigned Norman Rockwell smile and the jovial Coca Cola-soaked homespun wit and wisdom of Warren Buffett, who I rather doubt has giving even a single “damn” this week about the market’s beguiling behaviour.

Now, it has not escaped me that an index like the Down Jones has flushed 3,000 points in about 12 days, which I blame in part (as is my want to do) on the media’s frontal lobotomy-style interpretation of economic performance measures, and having over-egged that pudding into a cholesterol-bomb that’s now fattening the love handles of bond salesmen and cash deposits in banks the world over.

The scribblers have blistered their fingers with screeds of toil and trouble as they’ve tapped out the travails of these now lurid losses, and in typical fashion with a glaringly Scarlett reporting imbalance that belies the corporate earnings, cash piles, jobs growth, sector performance and general global upsidedness that has preceded this brief turvy after lots of topsy.  

Might that some brave headline writer would pull a sea of these frustrated investor Daniel-sans aside to wax-on and wax-off the blind and blinkered recency-biased reporting and allow for a bit of balance.

They might even consider the words of Felix Wintle (ex-Neptune) about what these events so filled with sound and fury likely signify:

“This looks like a sharp unwind of an over-bought market, skewed by the short volatility positioning of hedge funds. It should settle out over the course of this week.”

And I’ll paraphrase a few of his further thoughts that have brewed this storm in a teacup for you:

  • “New Fed Chair (Powell for Yellen)”
  • “Markets don’t like change, or rumours of change”
  • “Markets going up and up without NORMAL pullbacks”
  • “This is looking very much like a correction that has been exacerbated by the extremely low levels of volatility, rather than any systematic problem or impending recession.”
  • “80-90% of all trading now is done by the machines; most of which work on algorithms and most of which are all alarmingly similar to each other, meaning everyone heads for the exit at the same time.”


To that end, remember folks that, “After all…tomorrow is another day.”

And that if we can take care of the sense, then the sounds and words will (eventually) take care of themselves. 

Alan Steel, Chairman, Alan Steel Asset Management




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