Santa's sleigh reaches for the sky as values face falling off a cliff

Q: What is the US "fiscal cliff" mentioned in the article and how could it affect Australian investors?

The piece describes the fiscal cliff as a looming US budget and policy risk that could trigger a sharp market reaction around the New Year. For Australian investors, sharp moves in US markets can flow through to the S&P/ASX 200, increasing volatility and prompting more cautious positioning.

WELCOME to the last race of the year, and it's starting to look like the market may have saved the worst for last. The looming "fiscal cliff" in the US could ring in the New Year with a scream and a thud, and investors are busy attaching their parachutes.

By InvestSMART · 18 Nov 2012

By InvestSMART ·
18 Nov 2012

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The S&P/ASX 200 benchmark index slipped 3 per cent - curse those Yanks - and our local Aussie heroes, the miners and friends, were the hardest hit.

Speaking of heroes, into the crossfire of global economic fearmongering step a new band of brothers. The ever graphic Richard Pritchard has charted his way to top spot early, earning a mighty $250 in the process. Strategic Energy Resources and coal explorer Blackwood Corp spiked almost 25 per cent, which was enough to offset some howlers at the other end of his list. While Rich was the only one to make money, a trio of racers new to the game beat the index handily. Leading the pack is reader Angela Smith who, remarkably, also picked Strategic Energy Resources. Contract manager David Peda also performed admirably with a reliable looking portfolio that didn't let him down (relatively speaking).

Hold on! Who's this? White beard, red robes, funny hat ... some kind of creepy cultist? No, wait, it's Santa Claus! Fresh from the North Pole, the jolly fellow can tell whether you've been naughty or nice, but does this talent extend to companies? He is an expert in stockings but is he in stocks? Oh, we could go on, but suffice to say he's off to a decent start. There's some daylight between the top four and the rest and Doreen, business manager Manish Bansal, Pottsy and Dartboard will need something special next week.

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Frequently Asked Questions about this Article…

Why did the S&P/ASX 200 slide about 3% at the end of the year?

The article says the S&P/ASX 200 slipped roughly 3% amid growing investor worry about a looming US "fiscal cliff." That global political and economic uncertainty pushed traders to reduce risk, and the move hit the local market at year end.

What is the US "fiscal cliff" mentioned in the article and how could it affect Australian investors?

The piece describes the "fiscal cliff" as a looming US budget and policy risk that could trigger a sharp market reaction around the New Year. For Australian investors, sharp moves in US markets can flow through to the S&P/ASX 200, increasing volatility and prompting more cautious positioning.

Which sectors were hardest hit in the pullback described in the article?

According to the article, miners and their related sectors were the hardest hit during the sell-off, contributing significantly to the S&P/ASX 200’s decline.

Which companies bucked the market trend and rose despite the sell-off?

The article highlights Strategic Energy Resources and coal explorer Blackwood Corp as notable winners — each spiked almost 25% during the period covered, standing out against broader market weakness.

Who were the individual investors mentioned who outperformed and what did they do?

The article mentions Richard Pritchard, who charted his way to the top spot and earned $250, reader Angela Smith who also picked Strategic Energy Resources, and contract manager David Peda, whose reliable-looking portfolio performed admirably relative to peers.

The article says a "trio of racers new to the game beat the index" — what does that mean for everyday investors?

The report notes that three newer participants outperformed the index, meaning their portfolios fell less (or performed better) than the S&P/ASX 200 over the same stretch. It illustrates that even during market weakness, some stock selections or portfolios can hold up better than the benchmark.

Why does the article use a Santa Claus metaphor — does it have investment meaning?

The Santa image is a light, conversational metaphor in the article: it playfully contrasts seasonal cheer with stock-picking. It’s a stylistic device rather than a literal investment signal — the piece uses it to humanise participants and highlight that a few picks were doing well amid broader pain.

What practical lessons for everyday investors come through in this market update?

The article underscores market volatility tied to global events (like the US fiscal cliff), sector concentration risk (miners were hardest hit), and that isolated winners — such as Strategic Energy Resources and Blackwood Corp — can still emerge. It suggests staying aware of macro risks and that individual stock outcomes can vary widely even in a down market.