In the markets, last year's losers are this year's winners

Roger Montgomery from Montgomery Investment Management talks about how the Australian market was dragged higher in January by roaring global markets, encouraged by weaker-than-expected U.S. inflation, which lead investors to pre-empt a pivot in the trajectory of future interest rate moves by the U.S. Federal Reserve. It has really been a case of last year’s losers being this year’s winners. 

He gives as example US-listed Facebook; its peak-to-trough drawdown described a fall of 76 per cent. Facebook shares rose 55 per cent in January.  Montgomery says you cannot get too excited, Facebook shares are still down 52 per cent from their highs, at the time of writing.  Any stock that’s now down 70 per cent from its highs, could be up 200 per cent from its lows if it was previously down 90 per cent from its highs.