Apropos of this recent piece I wrote in the change in tone in markets I have been thinking more about the notion of change and our inability to see it as it is occurring. What prompted this latest musing was a walk past local tennis club over the weekend and I noticed something very interesting – it was empty. The context for my surprise was that when I was a teenager I lived at the back of a tennis club and the arrival of summer was heralded by three things that were as regular as clockwork, the arrival of hordes of cicadas, a heat haze over the local oval and the relentless soft smack of tennis balls. All the courts were occupied from sun up to sun down and the moment I could I grabbed the old trusty Dunlop Volleys and my trendy Donnay racquet and I jumped the fence and headed over to the courts for a hit. Nowadays the only time the club where I now live is occupied is by the once a week mid week ladies get together or the occasional after school program where a bunch of listless kids stare at the racquet in their hands and wonder how long it will be before they get back to their phones.
Change is rarely seismic in nature, to my eye it is more a process of slow evolution and erosion of the past where you get to a point in time where you look back and are somewhat mortified that you had not noticed that things had changed. It is akin to the experience that I guess everyone has had where you go past a familiar landmark that all of a sudden seems not to be there any more. You ask someone where it has gone and they tell you that it hasn’t been there for years and you wonder just what the hell you have been paying attention to for the intervening years.
The same opacity regarding change does catch traders, we seem to get stuck in a certain way of being or thinking and this reflects our observations. The domestic market has for the main part been average since the GFC but that will change one day. Markets always change, the problem is that because the change is gradual many dont notice and they will undoubtedly one day look back and our market is well beyond what it is today and they will ask the question – when did that happen.