Market psychology and emotions in action - Macquarie Group (MQG)

Karl Siegling

Cadence Capital Limited

Below is a diagram of the Macquarie Group share price over the past ten years. This period includes the GFC the period ‘post’ the GFC, the recovery from the GFC and, more recently, the growth in share price followed by a relative collapse in share price and, as we write, a recovery in the share price. Whilst it is nearly universally accepted to buy cheap stocks and sell expensive stocks, this simple concept can prove difficult to implement. MQG have announced that they will earn the highest profit ever recorded by the company for the financial year ended March 2016. This profit will reflect a significantly growing business, a business expanding globally as well as a business moving to more ‘annuity’ style revenues. Were it the case that share prices reflected fundamentals at all times, one would presume that approaching the full-year record results period for MQG, the share price should also be approaching record highs. In this article we use MQG as a ‘live’ example of market psychology and emotions in action. (VIEW LINK)


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Karl Siegling
Managing Director and Portfolio Manager
Cadence Capital Limited

Cadence Capital strives to outperform the index and we invest our own money alongside yours. We believe that a combination of both Fundamental and Technical analysis, along with a disciplined stock entry/exit strategy, are key to investing success.

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