After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.

Well, this has been an interesting week.

Meat Loaf goes and dies and the stock market goes into meltdown!

However, all joking aside, the stock movements of the last five days have left us all without the meatloaf and just (in a) pickle of a situation.

It was only at Christmas time that I was making some predictions and already three of them have come true (and it’s still only January).

Bill Wyman can still remain very nervous – until December, at least.

Now, nervous times need us to stand back and observe.

Some of us have been here before.

My advice to you in these volatile times is to only read the headlines and not the underlying stories.

All a journalist can give you is a rearview mirror image of what has happened and not some sage advice.

‘Market falls 2% on Fed’s Hawkish statement’

I have met many mainstream journalists in my life.

All wore cardigans with holes in the sleeves, married a school teacher and would have loved a very large amount of alcohol put on my bar tab.

The only thing that was pickled about them was their liver.

I recently had a foolish moment of weakness and made the mistake of actually reading a clickbait article about an economist’s view on why interest rates may rise.

The writer actually didn’t have a clue about what was happening in the real world.

You never see a headline about the market rising by 3% over two days, but should it fall 5% it gets top billing.

We are currently in times of financial history where no one actually knows the outcome.

If the official interest rate in Australia is at an artificial rate of 0.1%, then where should the next uptick take it to?


I don’t think so, as that would not mean very much.

It would be like a slap over the face with a limp lettuce leaf to anyone with an over the top mortgage. Too soft.

They would just say ‘nah’ and keep on spending with their credit cards.

Rates really need to go to 1%, bang, in one go, to get everyone’s attention.

Everyone is talking but no one is doing.

In Canada, they have just announced that their official rate will stay at 0%, instead of taking the moose by the horns, raising them and helping stem inflation.

God help all those in Canada when the moose’s nuts are in the vice.

“The decision, in our view, is a policy misstep,” foreign exchange analyst Simon Harvey with Monex Canada said, “and is one that could prove costly later down the line.”

He ain’t wrong there.

The poor old Australian stock market has taken a bit of a battering and has been all over the place this week.

The one day it could have bounced was on Australia Day but the market was closed, so the only thing to watch in a day of trading darkness was Bitcoin.

And that was boring.

What I am saying is keep your powder dry. Only read the headlines and not the story.

If you are long of blue chips, then history tells you to just hang in there and don’t panic.

If you happen to be in the more spicy end of the market and your stocks bounce but not by the same amount of their fall, then look out.

In the ‘87 crash, everything fell for two days and then the blue chips started to recover and the overgeared companies started to fade away, as Bondy and John ‘Pig’s Arse’ Elliot found out.

A flight to quality killed their debt-loaded empires.

Finally, just remember this.

If a stock falls from $1.00 to 50c, then it has fallen 50%.

However if it recovers and goes from 50c to $1.00, then it has risen by 100%.

Now you will never see that in a headline!

The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected].

Feel free to contact him with your best stock tips and ideas.