When Isaac Newton first posited that an object in motion would stay in motion unless acted upon, he probably wasn't thinking of stock markets. But hundreds of years later, the same principle has been adapted for investors; or "the trend is your friend" as it's more commonly stated. While this rule of thumb can be pretty handy, there are rare moments in financial markets where everything can turn on a dime, and suddenly that trend doesn't look so friendly. George Soros called these times 'inflection points', and according to Ben Griffiths, Principal and Portfolio Manager at Eley Griffiths, we stand at one of these crossroads today.
“It is classic exhaustion price action. Bulls aren’t sure if they’re convinced anymore, and bears are in the process of giving up after that strong run-up from December. It’s what markets do best at turning point; they confound the bulls, they trip up the bears, and they generally exhaust investors.”
In this week’s episode of The Rules of Investing podcast, Ben explains why the Australian economy could be doing better than it seems, how he knew it was time to start buying shares near the bottom of the GFC, and three simple investing rules that’ve served him well.
- 1:45 - The world according to GARP
- 5:37 - Small cap managers need to be streetwise
- 8:48 - The need to see skin in the game
- 11:38 - Behind our confidence in Afterpay
- 14:25 - Manifold challenges of boutique management
- 19:12 - Reflections on financial calamities
- 20:21 - Technical analysis or shamanistic witchcraft?
- 24:40 - An important inflection point
- 32:41 - All good things must come to an end
- 38:08 - The ogre of stagflation
- 39:42 - The one thematic nobody's talking about
- 44:51 - The market always gives you a second chance
- 49:36 - Our three favourite questions.
Content discussed during the podcast:
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The speakers mentions a few random leading indicators of recession in the US. For readers interested in this see www.recessionalert.com for a number of recession predicting tools based on 23 leading indicators. Current odds of recession within six months is still low.
Hi Pat First time listener to the podcast. Enjoyed the relaxed style and commend both you and your guest Ben on the generous discussion of 'inflection points' and the 'Small Caps' in the world of investing. Will tune in next time you are on 'Livewire". I have hit your follow button. Best wishes for the next Podcast. Regards Tolly