Australian Investment Blog

All the press this morning is focused on Greece and whether it will exit the European Union (EU). For me as before, there will be another last minute “band aid” solution and a totally broke Greece will remain financially part of Europe. The sceptic in me says that we all know Greece is broke, but the EU is happier that economists focus on them, rather than the next layer of trouble including Italy, Spain and Portugal. Hence, today I am going to let Europe look after itself and decide whether to pull the trigger on my “technical buy” signal evolving in MYR.

The Retailing Index is up 36% in the last year, but as we know Myer (MYR) has continued to fall to all-time lows last week, a staggering 70% discount from its float price 6 years ago – see chart 1. Jennifer Hawkins helped get a lot of people excited about buying MYR, but the only success was had by the private equity groups that literally dumped all of their shares immediately, reflecting that they agreed the float was overpriced. With the local economy arguably worse with interest rates down at 2% and PWC stating in today’s Financial Review that 1/3 of Australia is now in recession, is retail a dangerous area? When it comes to MYR, it’s not just the retail and on-line questions, but the company itself that continues to underperform.