The market is wrong about the banks

Marcus Padley

Marcus Today

There’s a phenomenon known as Groupthink. It was defined by psychologist Irving Janis as ‘a mode of thinking that persons engage in when concurrence-seeking becomes so dominant in a cohesive in-group that it tends to override realistic appraisal of alternative courses of action’. In other words, everyone gets carried away with the same idea. Groupthink is most prevalent in the stock market. We continually see the talking heads in the media talking the same stocks and stories. We fall in love with the Domino’s Pizza story or one of the myriads of other popular companies. Everyone’s (there’s that Groupthink) expecting the banks to raise yet more capital, but the need for banks to raise more capital is driven by research from major investment banks keen to raise capital for them - NOT BY APRA. The groupthink on $20bn to be raised has been locked in by repeated media reporting...not the report from APRA. Read more for the top five reasons there's a war on the banks. (VIEW LINK)

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Marcus Padley
Marcus Today

Marcus Padley founded Marcus Today in 1998 and leads the team of analysts and market commentators that publishes a daily stock market newsletter, presents four podcasts and runs an $80m Australian equity fund. He is passionate about educating and...

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