Ann: Investor presentation - IOOF FY 2018 results, page-26

An interesting comment at the bottom of the updated II article

‘
Thanks - good article.

I think a lot of the market's aversion to uncertainty relates to fiduciary/reputation/client relationship issues that reduce demand for a stock (rather than increase supply) during times of uncertainty. We forget prices can fall due to reduced demand as well as increased supply!

Most funds in markets are not allocated by the ultimate owners of the funds, but rather by their appointed fund managers/advisors, etc. It is hard for many market participants to invest someone else's money into an uncertain situation (harder than their own) because they have to justify their actions to their clients, and often clients expect hard answers/conviction before investing, rather than 'we are not sure, but feel like the selling is probably overdone'. People are risk averse less with respect to the stock itself, and more with respect to the potential reputational damage with clients if they get it wrong. People are social creatures and are risk averse when it comes to things that could get them 'kicked out of the tribe' (a death sentence in hunter gather days).

As soon as uncertainty is allievated (or perceived to be alleviated), stocks usually quickly rebound as there is now a concrete enough basis to sell the stock to clients.

A lot of market inefficiency is driven by people's desire to avoid risking looking stupid. ‘

I think this emphasises the advantage we ‘retailers’ have when assessing risk/reward compared to most fund managers/brokers.