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Proceed with caution

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By Michael O’Connor, theislandinvestor.com

Stock Market Surge

Last week we saw a considerable rally in the stock market. On Thursday, lower-than-expected inflation figures were well received, resulting in the largest one-day rally in over two and a half years.

Although US inflation remains near its highest level since the early 1980s, the latest monthly Consumer Price Index report brought some relief. Inflation rose at an annual 7.7% rate in October - down from 8.2% in September. This was enough to push the NASDAQ up more than 8%, while the S&P 500 added 6% for the week.

So as improving inflation numbers push markets higher, should investors be jumping in headfirst to avoid missing yet another market rally?

Not quite.

Not Out of the Woods Yet

In the last two years, we have seen rapid market recoveries play out at breakneck speed as Monetary support, ultra-low interest rates, and fiscal stimulus all conspired to drive markets higher.

In simple terms, when money is free, and governments are hell-bent on continuously printing more and more of it, asset prices increase.

This exuberance pushed prices and valuation multiples to questionable highs. Now, however, the money printer has been turned off, and interest rates have increased dramatically, leaving us in a far less supportive environment. Unsurprisingly, asset prices have fallen accordingly.

This recent pullback has stripped out much of the excess from markets, leaving stocks trading at much more attractive prices.

Household names such as Google, Microsoft, Amazon, Tesla, Disney, Nike, Netflix, and Facebook have fallen between 30% and 75% in recent months. Now, the entry points into some of the best companies in the world are much easier to digest. This is welcome news for investors with a long-term outlook. But over the short term, it is vital to realise that many of these names are trading lower for a reason.

It can be tempting to assume that we will return to all-time high valuations now that inflation is starting to turn and markets have stripped out much of the excess in valuations. However, as we stare down the barrel of falling earnings, slowing economic activity, a less supportive monetary policy and persistent inflation, it would be naive to think that it’s all upside from here.

The positive momentum from last Thursday’s inflation print will fade, leaving market participants wrestling with the looming recessionary pressures.

Taking all the above into consideration, I believe the stock markets will remain within the 10% range it has traded in over the last month. This is likely to result in volatile horizontal trading over the coming weeks and months as positive moves due to falling inflation give way to market declines as earnings growth continues to slow.

Summary

The market appears to be moving past its overwhelming obsession with inflation, but unfortunately, this paves the way for all new worries. The slowing economic activity that is allowing inflation to fall in the first place now becomes enemy number one. Softer demand will lead to lower spending, leading to lower earnings which should theoretically lead to lower stock prices.

Unfortunately, the ferris wheel of worry continues to spin.

Considering all the above, I believe the stock market will remain within the 10% range it has traded in over the last month. This is likely to result in volatile horizontal trading over the coming weeks and months as positive moves due to falling inflation give way to market declines as earnings growth continues to slow.

Over the long-term, opportunities are more plentiful than ever as valuation multiples improve but for those expecting to make a quick buck over the coming weeks and months, proceed with caution.

If you have any questions reach out at www.theislandinvestor.com, I'm always happy to help.

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St Brendan’s College: Voices from the Halls

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Interview conducted by Aodhagán Ó Súilleabháin, Cormac Flanagan, and Ryan Twomey.

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Name: Kieran O’Leary – Entrepreneur and Killarney businessman.
Year of Graduation: 2005

Occupation: I would be the Jack of all trades and the master of none. I am involved in the hospitality industry. I have Corkery’s Bar, Revive Café, Ruckus Café and I’m a part of Integrity gym, so I do a lot of coaching. The passion by me would be probably in the fitness industry, because I played at a high enough sporting level and that’s come to an end now so I’m kind of concentrating on the coaching early mornings, hospitality day and evening and I have a young family as well so that’s obviously the biggest priority of all.


Could you describe a typical day for you?
I wake up at 5.30 and I am in the Gym for 6am. I work with clients till 8.30 – 9:00am. I then have school drop off, check the stock in the cafes and open Corkery’s. I kind of float around all day, kind of just helping where I can, and then evening time is probably the most hectic, at home, the kids might have football, well the young fella has football, he does a bit of Jiu-Jitsu, and dinner, stop, start, repeat the following day. I work hard, when you’re self-employed it can be difficult, but I try to get down time on Sundays or maybe Wednesdays.

What drew you to St Brendan’s as a school?
It was the sports that kind of drew me. The past pupils that I would have known from the sports clubs and would have seen their careers progress. It’s renowned, the history behind the Sem is unbelievable. I wasn’t really going anywhere else. The history behind it, the stories that come out of it, the people that have progressed and done so well in life. I don’t mean success by wealth, they seem to be happy in their professional life, happy with their life decisions and I suppose the Sem has a huge part playing in that.


Would you have kept in contact with any teachers?
Even now you see older teachers that may be retired or are even still there, they still have a bit of time for you, and they’ll stand in the street and say how are you getting on? We live in a small town, where everyone knows kind of everyone’s business to such an extent, so I think just the camaraderie, friendships and like the great times we had, I’ll always remember that. 



Would you have kept in contact with your classmates?
The friends I made. They are lifelong friends. We were lucky enough to be a part of a good few sporting teams, and we would have progressed through the Kerry GAA side of things, and then there’s a lot of them working around here, a few of them abroad, but you’d have your core five or six fellas that you still stay in contact with. Outside of that if you saw past students of the school around the town, of course you’d stop and talk to them.


Were there any specific academic programmes or teaching methods at the school that helped you succeed in what you’re in today?
I didn’t apply myself the way I’d like to which is kind of a regret, but I did Business Studies with Joanna Ryan, she was a very good teacher. I went on to do business which I didn’t complete in IT Tralee, and funnily enough, then I got involved in the business side of things, so it’s funny how things work out. Just because you mightn’t do the best Leaving Cert doesn’t mean that you’re a failure, there’s always an opportunity around the corner and if you’re willing to apply yourself in any shape, way or form then you’ll succeed. It’s all about the mindset, discipline and as I said, my mindset was GAA, maybe even soccer related when I was that age, I could see nothing else, I was a bit blinkered, but as you broaden your horizons as you get a bit older, more mature you realise there’s different ways to go about your goals.




Can you share an example of how a teacher or staff member made a meaningful impact on your growth.
I’d say Seamus Grealy to be honest, because he is an excellent teacher. He was a soccer coach and he would have seen the potential in me and even though the application mightn’t have been there at times. He still persisted and gave me that chance to try and achieve the best possible grade I could within the Leaving Cert year.  I would have done honours English even though my mother and father were saying “What are you doing?, you know, because I hadn’t the work done or whatever. The fact that he gave me that kind of TLC. I needed, that kind of arm around the shoulder, to say, listen there’s more in you, try your best, and as you know he can be firm as well, I just found him pretty good to deal with. 

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Official launch of the Assess Ireland Rally of the Lakes set for April 11

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The official launch of the 2026 Assess Ireland Rally of the Lakes will take place at Gleneagle Hotel on Saturday, April 11.

The organising team will reveal key details of the upcoming event, including an up-to-date entry list and several new innovations for this year’s rally.

Representatives from three major championships will be in attendance: the NAPA Irish Tarmac Rally Championship, the GK Print Southern 4 Rally Championship, and the Kingdom of Kerry Rally Championship.

Local councillors and politicians will also be present to offer their formal backing to the event, which remains a significant economic driver for the region.

The launch begins at 5:00pm with a display of rally cars outside the hotel. Several local rally drivers will be on hand to meet fans, and an open invitation has been extended to all members of the public and rally enthusiasts to attend

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