Globe and Mail
Living up to its reputation as one of the cruellest months for stocks, September has a perfect score so far: Three days, three gut-twisting losses.
In the span of just 72 hours, the S&P/TSX composite index has plunged 957 points or 7 per cent, including a 324-point tumble Thursday that could have been much worse: At one point, the index was down as much as 428 points before a few brave – or reckless – bargain hunters stepped in.
“The sentiment has gone from euphoria to panic,” said John Stephenson, senior vice-president and portfolio manager at First Asset Investment Management. “Right now people want out at any price.”
... Exacerbating the commodity rout was Ospraie Management LLC's decision to close its biggest hedge fund, which at one point was worth $4-billion (U.S.) but has suffered steep losses after its bets on resource stocks backfired.
Fearing that Ospraie will liquidate its portfolio of natural gas, oil, metals and other commodity holdings at fire-sale prices, many investors are selling their resource equities now in an attempt to minimize their losses. But the pre-emptive selling is only pushing prices lower.
“You've got people saying, ‘We've got to get out in front of this before we get crushed,'” Mr. Stephenson said........
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