From my blog.

[tpr2]

The following is an article which nearly made me choke with laughter.
I am going to insert my "thoughts" as I read through it. Don't choke on your dinner


Article starts here and you can see my thoughts.
Investors are walking around with much more of a spring in their step after a great month for Australia’s growth and hedged international assets.

"TP: What the.... what about the last 12 months of horror and devastation. What happened to the other 40% of our money"

Unhedged international exposures were hurt by a strong Australian Dollar, rising 8.5% against the US Dollar which weakened as the US Government effectively printed money by buying their own Treasury securities.

"TP: ahhhhh doesn't that mean there is going to be a lot of inflation?"

Whilst it has been a long time coming, the returns were certainly spectacular,

"TP: ahhhhhhh that's like saying I lost all my money in the first 9 races but made 10% back in the last so it was a great day....hellooooo"

with local shares (S&P/ASX 300 Accumulation Index) returning over 8% for March. For what it is worth, my view is that 6 March 2009 may well prove to be the low point for Australian equities. Australian equities still have a long way to go as there has not been a positive rolling quarter since September 2007. That is six negative quarters in a row - a losing streak we have not seen since the Korean War (1951/52) and before that back to 1938. It is worth noting that the All Ordinaries Index has never seen seven consecutive quarterly negative falls.

"TP: It's also worth noting that the US never had a black president before either.....that's not a shot at Bara, I like him but it proves history is not always a good indicator of the future."

It was also a good month for active fund managers, with Perennial Value adding a substantial 4% return above the index and Perennial Growth adding an additional 1.7% above the index.

:TP: Ahem..... thats not too hard to do if the bloomin benchmark is negative anyway"

Despite the IMF downgrading world economic growth to a negative figure of between -1 and -0.5% for 2009 (the first time in 60 years that there has been negative global growth), financial markets looked beyond this and focussed on some solid indications that the pace of decline is slowing. These indicators include:

• A positive reaction to the Geithner plan to clean up US bank’s balance sheets by allowing them to auction troubled assets to Government supported funds;
• Announcements by JP Morgan and CitiGroup that they were now trading profitably on a monthly basis;
• Ben Bernanke, in a rare TV interview, stated America's recession will “probably” end this year if the government succeeds in bolstering the banking system;
• February US new home sales surprisingly increased much more than expected (a 4.7% month-on-month increase compared to a predicted -2.9% decline); and
• Some good macro economic indicators showing that the global inventory cycle may have bottomed, with producers overestimating the decline in demand.

In addition, there have been some positive announcements regarding revised regulation for financial services, which will hopefully be adopted across the globe at the April 2009 G20 meeting.

"TP: snoooze yawn.

Could markets retrace the lows? In my opinion, markets could react dramatically if there is an early failure of the US Geithner plan which enables banks to offload their bad loans and troubled assets. Whilst there will be a queue of government incentivised investors and fund managers keen to buy these troubled assets, a key factor for the markets will be the valuation levels for these assets compared to their holding value on balance sheets.

Essentially, no one really knows the trajectory of this recovery. History shows us that markets will bounce back fairly dramatically as, and when, we see confidence return.

"TP: History also showed that Warren Buffet had never lost so much money in one hit. History also showed that Bernie Madoff was a great bloke."

March was a great indicator of what can happen to markets at these historically low levels. Even the world's supposed best investor Warren Buffett has arguably made several timing mistakes during this current cycle. So, it does not really matter if March was the start of a sustained bull market or simply a bear market rally. A key lesson from March is the ability of markets globally to very quickly reassess risk and subsequently reward investors who are positioned to take advantage of these positive moves.

"TP: At least thats a reasonable statement."

P.S this bloke has a lot of real estate in his personal portfolio...... practice what you preach bud.