A slew of company earnings news has hit the market. Not least among them, BHP Billiton's!
On that point… Whoa, boy. We all knew the miners were up against it, what with volatile commodity prices, but the results just released by BHP Billiton (ASX: BHP) this afternoon made the picture even clearer.
The Big Australian's profit slumped some 30%. Revenue fell by 8.7%.
It's enough to remind you of Rio Tinto's (ASX: RIO) ugly half year results, released earlier this month, which saw profits plunge by a stunning 71%.
Both companies are in full damage-control mode, slashing costs and selling off assets.
Beginning to feel a bit bearish? You're not alone…
You could be forgiven for feeling a bit bearish yourself, what with the news from the Big Australian…
As well as blue chip companies like QBE Insurance (ASX: QBE) and Coca-Cola Amatil (ASX: CCL) both posting sharply declining profits today — and getting smashed.
QBE shares and Coca-Cola Amatil shares both closed 5.5% lower.
Certainly, some of the louder voices in the market are predicting a further slowdown…
The good times are over, they say. At least for a while.
For instance, in this morning's Australian Financial Review, Oliver Gordon, head of global advice at Rivkin, said the market's momentum "is waning".
He didn't stop there either.
"Mr Gordon suggested that while the ASX 200 low from two weeks ago, of just above the 5000 level, might, this week, provide the market with some initial support, any weakening could lead to a deeper correction… to the level between 4900 and 4837".
Not to put too fine a point on it!
Another commentator, CMC Markets chief analyst Ric Spoone, said the impact of ex-dividend trading — with heavyweights like Computershare (ASX: CPU) and Wesfarmers (ASX: WES) going ex-dividend today– will also drag the market down.
Still, for all these experts issuing sound bites, there's one truly ALARMING trend only The Motley Fool is telling you about…
Just remember that you read it here, folks.
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All right, all right. So there's no such trend. My point is…
The media (and particularly, the financial media) is always keen to identify so-called "trends." The scarier, the better, it seems.
Often these commentators seize on a single data point or chart — and just extrapolate from there.
It hardly matters whether the data point in question is relevant or important… or whether that data point can tell us very much about the market's future beyond next week (if it can even tell us about next week — because I doubt it!).
Motley Fool writer Morgan Housel has written that, "the plural of 'anecdote' is not 'trend.'"
Likewise, the plural of "data point" is not "trend"!
Besides, what would it mean for you, exactly, if the ASX200 stood at 4837 at some moment this week? Not much, I'd argue.
Of course, it can be hard to shut out all this noise and keep your long-term perspective.
That's just the thing we've got to do as Foolish investors, however. Remember, in the end…
Whether the market dips this week, next week, or doesn't dip at all, what matters is that you invest in Australia's best companies and hold your shares over years, not months, as you collect dividends and allow time for solid capital appreciation.
Doing this is a great way to get rich over time. Just don't expect the "experts" to tell you that. Fear may sell, but time is on YOUR side.
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Of the companies mentioned above, Bruce Jackson has an interest in BHP Billiton and Wesfarmers..
