There's been plenty said — and written — in the business pages, on TV and elsewhere about the 'crisis' in Greece.
I put crisis in inverted commas specifically because no-one is sure if it really is a crisis. Sure, there's plenty of doom and gloom about — and there are some very smart people who have some very thoughtful (and worrying) views on the subject.
But we've been worried about Greece for 5 years now. And before it, we worried about Spain, Portugal, Italy and Ireland. And there was Cyprus, whose own banking crisis was going to be a problem. Or Ukraine.
Do you see the problem? There are no shortage of potential reasons to worry, but very, very few of them end up being a problem.
And even the stock market seems not to know whether it should worry. Or, more accurately, the thousands of investors whose daily buy and sell orders make up 'the market'.
Is it a problem? Or a worry?
In the past 10 business days, there have been 7 days when the market moved more than 1%. On four of those days, the market gained more than 1%. On three, it lost more than 1%. The net effect is that the market is essentially back to where it started over this period.
If you're looking for evidence that no-one knows — and that the market has started to resemble a chook with its head cut off — you need look no further.
The simple reality is that no-one knows what the Greek people and parliament will decide — and how the European Union will respond. And even if we knew that, there's no precedent for how — or if — it'll impact the rest of the world.
Before that uncertainty scares you out of the market, though, it's been — to one degree or another — the case for the last 6 years, ever since the GFC broke. Over that time, the All Ords has returned 88% — so you've gone close to doubling your money, despite the risks. And the opposite holds — if you took your money out at the first sign of trouble and have been waiting for a resolution ever since, you've cost yourself a small fortune.
Even if the ASX falls 10%, 15% or even 25% from here, you'd still be miles ahead. Maybe this is the time Greece fails. Or not. But history favours the brave.
Something to really worry about
Speaking of fear and bravery, though, you need a cast iron — if you'll excuse the pun — stomach to be investing in iron ore stocks right now.
While exports from Port Hedland have hit a record volume, the price of iron ore fell 6% overnight, remaining in a range that keeps almost all Australian iron ore miners in the categories of 'near-death', 'vulnerable' or 'much-less-profitable-than-we're-used-to'. Yes, that really is as good as it gets, if you're in the business of digging up and shipping the red dirt that covers much of Western Australia.
Put simply, there are some industries that are rarely worth the long-term investor's dollar. The most obvious are airlines, local steelmakers and miners. That list is even more perilous when share prices (and commodity prices) are high.
Buying shares in iron ore miners — unless you're getting a quality miner for a dirt cheap price — is a mug's game. And when I say dirt cheap, I don't mean a price that's 40%, 60% or even 80% from its highs. I mean a price that allows for a very long stretch of very low iron ore prices — and only when a company can produce it for a very cheap price. That is, as you can imagine, not an easy task.
