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Thursday, 2 April 2020

Recency bias (and sticking to the principles)

Recency bias

The RBNZ today ordered banks to stop paying dividends back to their Aussie parents.

The UK seems to be going down a similar path, with banks expected to share the pain of the COVID-19 recession.

The Aussie major banks immediately dropped more than 5 per cent on today's open due to the cautionary news.

Commonwealth Bank was down more than 6 per cent in early trade, and trading with a $59-handle. 

As we discussed only yesterday, dividends will be slashed over the year ahead, so you need to be well prepared for that. 

A short and sharp post today, then, on sticking to your principles.

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