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.
This is all a bit hard to cop given the huge fees Southern Cross has received from Andrew Forrest’s Fortescue outfit as its chief equities backer and promoter. However, Aitken points out the following:
Those quotes were taken without my consent from an email I sent to professional investor clients who are fully aware of our advisory role to FMG. Any formal public research my firm issues discloses the fees we have received from FMG and how many FMG shares any of our employees own.
That seems to deal with the conflict question, but then there is Charlie’s extraordinarily bullish record on a range of fronts.
Consider this passionate advice given to subscribers of The Eureka Report on November 2 last year, 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 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.
He then faded from view somewhat, but burst back onto the scene yesterday by being negative about rival brokers on Fortescue.
Having called the credit crisis and bank stocks so badly, surely a touch of caution about Fortescue would be in order.
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