Market has its MOJO or is it FOMO?

I noticed the phrase "investor exuberance" in a news story  for the first time in what seems like forever: Is this the fabled 'green shoots' or a red alert to sell?

While I am not authorised to answer that question, a fund manager suggested to me that the recent stockmarket surge was best described as a "FOMO rally" - for 'fear of missing out'.

Indeed, a Mr Stuart Smith, senior client adviser with Australian firm Bell Potter Securities, said in the AAP story that we're overdue for a correction.

"I think we're overdue for a correction and I'm not alone. Valuations are stretched," he said.

What a wet blanket. But, to be fair, other news today was mixed.

A Sydney Morning Herald story, for example, was headlined "Global financial crisis increases suicide risk - Roxon", in which Australian federal Health Minister, Nicola Roxon, cut the ribbon on a new suicide prevention website.

Claims on Australia's public health payment system, Medicare, for depression and psychological treatment were up over 50 per cent, the story says.

"In the economic downturn there are going to be financial pressures on families which will strain relationships," Roxon said.

"So we must remain particularly alert at this time."

Closer to home, Suzanne Edmonds, head of lobby group Exposing Unacceptable Financial Activities (EUFA), was calling once more for a Royal Commission of Inquiry into the finance company domino effect. Edmonds too touched on the subject of suicide.

Her headline - "Finance company victims still want Royal Commission of Inquiry" - was equally depressing.

But just as not every finance company was a fraudulent Ponzi scheme, it's also not true that everyone who has lost money over the last two years was a 'victim' - at some point they may even have been exuberant investors.

 

David Chaplin