Tight at the top as a small slowdown puts the squeeze on runaway racers

NOT the most pleasantly fragranced second week to a shares race. The market has possibly seen a little too much sun and there are signs that the multi-month rally may be starting to pong. The benchmark ASX 200 index deflated by a tad over 1 per cent, with banks and mining stocks the worst drags.

By InvestSMART · 28 Oct 2012

By InvestSMART ·
28 Oct 2012

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What was a close race has become positively claustrophobic. Amid the crush, risk manager Michael Grau-Veliz has elbowed his way past intergalactic royalty in the form of Doreen Daze to claim a lead at the mid point of the race. It has to be said that Michael can consider himself a tad fortunate after a 14 per cent surge in Wotif.com almost cancelled out the fact that every one of his other stocks went backwards. But was it really luck? Or just totally ace risk management? You be the judge.

Every leg of the race has its hero, and this week it's financial planner Shaun Purcell, who was the only competitor to make any money, propelling him from sixth to podium contender. Fleetwood was his standout - up 6 per cent - but Flight Centre and Treasury Group also added some neat gains, showing that he's more than a one-trick pony (yes, we're looking at you, Michael).

Dartboard did pretty well, crawling through the legs of Richard "Chartman" Pritchard to sit within a pineapple's* distance of Shaun. Reader Peter Callaghan had a shocker and finds himself spat out the back of the leading pack as he drops to sixth from third, mostly thanks to an 18 per cent plunge in St Barbara, who - and I bet you didn't know this - is the patron saint of disappointed shareholders. True story.

*This is what the cool kids - like us - call a $50 note. Get with it!

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Frequently Asked Questions about this Article…

What happened to the ASX 200 this week and should everyday investors be worried?

The ASX 200 fell by a tad over 1% this week, according to the article. Banks and mining stocks were the biggest drags, and the piece suggests there are early signs the multi-month rally may be starting to slow. The article doesn’t issue specific investment advice, but it flags a tighter market environment that everyday investors may want to monitor.

Which sectors pulled the ASX lower this week?

Banks and mining stocks were identified as the worst drags on the ASX 200 in the article. Those sector moves contributed to the small slowdown and the index’s decline of just over 1%.

Is the multi-month ASX rally over or just pausing?

The article describes signs that the multi-month rally may be starting to cool — it says the market 'may be starting to pong' — but it frames that as an early signal rather than a definitive end. In short: the commentary points to a small slowdown, not a confirmed reversal.

Which individual ASX stocks were highlighted as top performers in the roundup?

Wotif.com was a standout winner in the article, surging about 14% for one participant. Fleetwood also performed well (up roughly 6%), while Flight Centre and Treasury Group added neat gains for another competitor.

Which ASX-listed company suffered a major fall this week?

St Barbara was called out for a steep decline — an 18% plunge — which the article notes knocked one reader’s portfolio down several places in the weekly race.

What human stories or investor characters were featured and why do they matter to everyday investors?

The article used a race metaphor to highlight investor experiences: Michael Grau-Veliz (a risk manager) benefited from a big Wotif.com surge, Shaun Purcell (a financial planner) was the only competitor to make money overall thanks to several winners, and reader Peter Callaghan suffered after St Barbara’s drop. The point for everyday investors is that individual stock moves can strongly affect portfolio outcomes and that different approaches produce very different results.

What lessons about risk management and diversification can everyday investors take from the article?

The article implies that risk management and diversification matter: one participant’s big Wotif.com gain partly offset other losses, prompting the question of luck versus skill in risk management. While the piece doesn’t give formal advice, it highlights how concentrated gains or losses in single stocks can change portfolio standings quickly.

Does the article recommend any immediate actions for ASX investors amid this small slowdown?

No explicit trading recommendations are given. The article focuses on market moves, sector drags, and individual winner/loser stories. It suggests a tighter market and a pause in the rally, which everyday investors might take as a cue to review risk management and portfolio diversification rather than acting impulsively.