Over the last 12 months the MSCI Europe Index fell 29%. The last time we saw a fall of this magnitu...
Over the last 12 months the MSCI Europe Index fell 29%. The last time we saw a fall of this magnitude was during the crash of 1973/74. Recent weeks have seen the market becoming increasingly volatile. A rise of 2% by mid morning can be reversed to a 2% decline by the end of the day.
It is worth observing that the broad European indices have now rebounded to levels last seen on 11 September. The speed of the reaction by the authorities and the concerted nature of their action took some people by surprise and must reassure many that we are not facing the sort of policy inaction seen in Japan.
While it is hard to make a case for an imminent bull market, it is certainly easier to feel more sanguine about the general level of the market, if not to feel positive about particular cases.
There are many companies which have seen their share prices collapse ' in a few cases it is not unjustified ' in some cases management have predicted more rapid sales growth than they have been able to deliver, others may be judged to have simply misled investors.
A few companies have fallen foul of putting all their eggs in one basket and betting on supposedly unique products that have subsequently been discovered to be less useful or even necessary than they had first predicted. Many good companies have also seen their share prices suffer. In some cases they have warned their investors that the outlook is not as good as previously predicted.
In order not to get caught out again, stock analysts have now assumed a 'worst case' scenario.
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