By Alec Hogg
Sometimes distractions are a good thing. In the past week, South Africans have been absorbed by the appointment of a new finance minister. And another shocking financial scandal involving the hapless KPMG. Meanwhile, the rest of the civilised world is fretting about a sharp fall in share prices.
Since the beginning of last week, America’s tech-heavy Nasdaq has fallen 7.5%, headed by a 14% pummelling for Amazon. Those losses spilled into the bellwether Dow Jones Industrial Average, whose 5% decline was mirrored by pretty much every other stock market from London to Johannesburg.
The headlines suggest this sell-off could turn into a repeat of the panicked selling we saw nine months ago when global stock markets gave up 10% in a week. But while those who let emotions triumph ran for the hills, the smart money kept its cool. Pretty soon Mr Market’s tantrum had passed, normality returned and prices recovered (and then some).
There’s no guarantee we’re in for a repeat of the post-February rebound. But selling when everyone else is doing so has never been a good strategy. So this looks like a good time to watch the dramatic news flow in the motherland. And let others get caught up in the share market’s latest drama.