Raging share market bull Charlie Aitken, head of institutional dealing at Southern Cross Equities, isn’t backward in coming forward.
Aitken made the front page of The Australian’s business section on Wednesday accusing various brokers of shorting Fortescue Metals Group whilst predicting the stock could hit $15 within 12 months. It rose 26c to $7.65 yesterday and was steady in morning trade.
Consider this passionate advice given to subscribers of The Eureka Report on November 2 last year [2009], one day after the All Ords peaked: “I urge investors to use any weakness in domestic banks due to US investment bank sub-prime issues as a buying opportunity.”
Hmmm, at one point the Big Four banks had collectively tanked by almost 40% as $100 billion of capitalisation disappeared. Let’s hope Charlie’s Fortescue prediction is more accurate than his advice on bank stocks.
On September 19 last year [2007] Aitken told Eureka subscribers that “the whole sub-prime issue is over-stated and losses/defaults will be nowhere near where the armageddonists believe.”
He even became something of a media critic with the following:
Over the past two months all the financial market armageddonists and super-bears have been dusted off and wheeled out of the closet. For some unknown reason in financial markets if you are bearish you are seen as smart. The financial press also loves running a super-bear story, and it is amazing how few truly optimistic or even realistic people get an outing in the press. I suppose good news doesn’t sell newspapers.
It is true that the media is largely driven by negativity, but journalists also love colourful descriptions of the prevailing consensus, which is what made Aitken a media star during the bull market.