S&P has cut a swathe through the resources stocks making up the S&P/ASX 300 share price index
John Robertson
PortfolioDirect
S&P has cut a swathe through the resources stocks making up the S&P/ASX 300 share price index. Twenty three stocks out of the 110 currently in the index are being dropped as part of the index provider's quarterly review, due to take effect on 20 September. The primary reason for the cutback has been relative share price performance. The resources sector is near the trough of a cyclical downturn which has dragged prices back to 2005 levels. By treating an inherently cyclical sector comprising hundreds of smaller companies as though it was just like any other sector in the US (from where the methodology arises), S&P adds to the cyclicality of the local market as its decisions encourage investors to sell on weakness and buy after share prices have risen, at times the exact opposite of what anyone should be doing.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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