Hindsight is a wonderful thing - and so is the market

A huge buying opportunity. It has gone up ever since.

I was reading some old Marcus Today newsletters this week from 2003. Let me take you back and allow you to exercise the power of hindsight as we read the following stories:

"Ex Billabong CEO Matthew Perrin sold his last 5.1 million shares in surfwear company Billabong at $6.35 through J.B.Were. That's about $100 million he has now raised. He can afford to retire. Oddly enough he apparently doesn't surf." The share price peaked at $17.95 in May 2007 and is now $2.11.

"On the rumour mill is the story that Aristocrat Leisure is going to be bid for at $2." Aristocrat Leisure has since hit a high of $17.68 in February 2007. Whoever was bidding for it should have bid.

"Chemeq had weak results today reporting a $3 million loss, much as expected. Dr Graham Melrose recently sold 40,000 of his 23 million shares at $5.86 taking the shine off the wonder stock, which has just dropped from $8.61." Chemeq hit 2.2? in February 2007 before disappearing. Dr Melrose retired from the board before it went out backwards. He was worth about $198 million for a bit there.

"Nylex has raised $100 million through a share placement at 25? underwritten by Bell Potter. Despite the stock recently trading at 44?. That's 400 million new shares bringing the number of shares on issue to 644.3 million. The chairman of Austrim Nylex, Mr Dick Nitto, said: 'Shareholders have today given a significant vote of confidence in the management team of Austrim Nylex and its strategy for the future."' Nylex went into receivership and was delisted in August 2010.

"ERG hits $1.43 on the back of final results and a $198 million loss compared with a loss of $243 million the year before. The MD says revenue will be the key driver." The stock hit a low of 0.2? in May 2009 before being restructured and delisted in June 2009. In the tech boom in February 2000 it hit an equivalent price of $26.62.

"Cochlear dropped from $28.40 to $21.70 today on the news that first-half sales will be flat after a meningitis alarm." It bottomed at $19. A huge buying opportunity. It has gone up ever since. Now $61.93.

"Metal Storm (MST) fell from 70? to below 50? this month despite the announcement that it had conducted the live-fire test of a rapid reload multishot cartridge for its 40mm pod system." Ah, those were the days, trading Metal Storm. Metal Storm is now 0.1?. It peaked at $3.31 in the tech boom.

"Fortescue Metals held their AGM today. Their focus has moved to iron ore. They describe themselves as 'Swimming with the tide'. At 60? the stock now has a market capitalisation of $100 million and is 66.3 per cent owned by management." FMG hit a high of $13.15 in June 2008 with a market capitalisation of $40.94 billion and is now $4.58.

"Ziggy Switkowski presented to the Macquarie Equities Investor Conference today. His main bullet points included growing traditional copper wire telephone lines revenues, strong free cash flows, a robust balance sheet, rigorous capex management and a strong dividend yield. He notes Telstra has a competitive advantage." Ziggy has gone as has the competitive advantage. The price at the time was $4.86 down from a high of $9.20 in February 1999. It hit an all-time low of $2.55 in November 2010. Now $3.56.

"Paladin put out a presentation on the Langer Heinrich uranium project in Namibia today. They note they have a strategic partner/cornerstone investor in place and have almost completed their bank feasibility study. The share price has popped 23 per cent from 1.7? to 2.1?." The price hit $10.80 in April 2007 up 63,529 per cent. Now $1.19.

Its great to play Harry Hindsight. But if the above examples tell you anything, it is this: the sharemarket is an unknown and is full of opportunity. Not just in 2003, but right now.

The next Paladin is right in front of us somewhere. So is the next disaster. You have to love this game. There is no better playground for your intellect, or your money.

Marcus Padley is a stockbroker with Patersons Securities and the author of stockmarket newsletter Marcus Today. His views do not necessarily reflect the views of Patersons.

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