FNArena’s Weekly Insights – September 16 2019

Investors should draw an imaginary elastic band between share prices of, say, Goodman Group ((GMG)) and Scentre Group ((SCG)) as that will help them in understanding current dynamics in the local share market.

We’ve all heard and read it before: the share market is heavily bifurcated; general indices no longer tell the full story about what is going on in equities. What we are not often told about is that the gap between the Winners and Losers in the share market, between those shares that are fully participating in this year’s bull market and those that are not, the laggards, that gap at times stretches out too far.

Hence why I think the comparison with an imaginary elastic band is but apposite. Whenever the gap stretches out too wide, next follows a snap back that closes the gap, somewhat, and up until this month only temporary.

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