It’s always amusing to see how headline writers beat-up a small fall on
the sharemarket into something that it isn’t. Today we got “Rout blows
froth from bourse
” as the lead in The Australian’s business section. Sure, the market fell 2.15% yesterday but in the context of this year’s 30% rise,
it is nothing.

The All Ords is off another 66 points to 4,431 today
after further interest rate jitters sent the Dow Jones falling another
123.75 points to 10,317.36 overnight. Even if the All Ords fell another
300 points, it would still be in well up for the calendar year and only
then would we have an official correction – that being a 10% drop.

A 3.5% drop in two days can be ignored because there has been quite a bubble in the market of late and you can see it
in the share prices of infrastructure players such as Macquarie Bank
and Babcock & Brown.

BNB is off another 84c to $16.72 today, meaning it has now lost 21.32%
from its record high of $21.25 on Monday. Macquarie Bank may have just
got the timing of its media float wrong, because its share price has
lost another $2.19 to $70 today, bringing the total drop from the peak
of $78.28 on Monday to 10.57%. Hopes of locking in the maximum $170
million profit on the sale of its regional radio assets into the media
fund are quickly receding.

I still reckon the market could get back to 4000, but with AGMs to
attend, you have to take your buying opportunities so orders have been
placed this morning for 32 PBL shares, 40 Billabong shares, 95 IAG
shares and 165 Multiplex shares, a total spend of about $2100. We
remain heavily underweight on equities and are looking forward to a real
“rout” to create some genuine buying opportunities.

With property turnover also slowing, it just might be that we’ve seen
the peak of the economic cycle, but as long as China continues to boom,
the Australian economy has no serious concerns on the horizon,
especially given the sheer weight of capital looking for a home from
compulsory superannuation savings.