The tales history tells | 4th quarter global market outlook

It was Mark Twain who uttered the famous words “History doesn’t repeat itself but it often rhymes”. Amidst a barrage of bad news for domestic investors including a local economy on its knees, no sustainable solution for dealing with our over indebted state owned entities, high unemployment and a domestic consumer under intense pressure, there is no shortage of reasons for investors to be concerned about the prospects for domestic equities. Apart from a very brief one month period in April 2003, the current rolling 5 year capital return is the worst witnessed on the JSE over the last 50 years. What is also evident is that such severe periods of poor performance are often followed by very sharp rebounds in equities which typically happen over a very short period of time. To reference back to the renowned words of Mark Twain, one wonders if history is likely to rhyme once again or if the infamous last words of “this time is different” will ring true.