Baptism of dire dabblings in dark times

JUST as we were preparing to bask in that sweet "new race" smell, our nostrils have been clogged with a stinker of a week on the markets.

By InvestSMART · 11 Mar 2012

By InvestSMART ·
11 Mar 2012

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JUST as we were preparing to bask in that sweet "new race" smell, our nostrils have been clogged with a stinker of a week on the markets.

The resources stocks were the anchor that dragged the market down 2 per cent as traders took news that China's economy might grow by less than 8 per cent annually in the years to come as a sure sign of the coming apocalypse.

Into this maelstrom plunge our plucky racers, only to be strewn this way and that by the malevolent market forces. Only two of our brave crew - dizzy Doreen Daze and the indomitable Pottsy - made any coppers after five days of carnage.

Not to get all Mad Max Beyond Thunderdome on you but what you need in these dark times is a hero. Doreen found hers in Pura Vida Energy (up 40 per cent), while Oil Basins rode in on its white horse to rescue the fair Pottsy, who would have been in some distress were it not for the oil explorer's 28 per cent jump.

Translator Primrose Riordan was our most consistent performer. A strike rate of 40 per cent when it came to winners versus losers kept her ahead of the market and in touch with the leaders. She broadly eschewed the ever-popular explorers to focus on energy and healthcare. Phosphagenics has a great name and put in an equally great performance - up 8 per cent.

All our other racers did worse than the market, and it's a very crowded field down there. Engineer Andrew Hutchinson was the best of the rest but he's only $1200 ahead of Dartboard, who we suspect is starting to make himself at home in the cellar.

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Frequently Asked Questions about this Article…

What caused the stock market to drop 2 percent this week?

The article says the market fell about 2 percent largely because resources stocks dragged the market down after traders reacted to news that China’s economy might grow by less than 8 percent annually in coming years.

Which companies were the standout winners this volatile week?

According to the article, Pura Vida Energy was a major winner (up 40 percent), Oil Basins jumped about 28 percent, and Phosphagenics delivered a solid gain (up 8 percent).

How did concerns about China’s economy affect Australian resource stocks?

The piece explains that traders treated the suggestion China may grow at under 8 percent annually as a negative signal, which put pressure on resource stocks and contributed to the market pullback.

Who was Primrose Riordan and what investment approach worked for her?

Primrose Riordan was the most consistent performer in the article’s roundup, with a 40 percent strike rate of winners versus losers. She generally avoided explorers and concentrated on energy and healthcare stocks.

Which sectors did the better-performing picks focus on this week?

The article notes that the stronger picks tended to focus on the energy and healthcare sectors rather than the popular explorers.

Did most of the featured investors lose money this week?

Yes. The article states that all the other ‘racers’ did worse than the market overall, and only two—Doreen Daze and Pottsy—finished the five-day stretch with any gains.

How close were competitors at the lower end of the performance table?

The article reports that engineer Andrew Hutchinson was the best of the laggards but was only $1,200 ahead of Dartboard, underscoring how crowded the bottom of the field was.

What message did the article convey for investors during these ‘dark times’ in the market?

The article uses a racing metaphor to say that in tough market conditions you often need a 'hero' stock to rescue performance—highlighting how individual winners like Pura Vida Energy and Oil Basins made meaningful positive differences amid broad market weakness.