Time to be defensive? Convince me Im wrong Please!

[belgarion]

Im feeling very bearish.

Im looking for good news but Im not finding much. Latest thing: UK Personal bankruptcies at 11-year high (http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982349973&p=1012571727085). Why is this an issue? Because, like 1993, central banks will need to move very carefully to avert the a potentially very damaging housing bubble burst and they may be too slow to avert higher inflation, which, once established, will return us to a sustained period of high i-rates.

This is much the same as the US. US recovery looks sluggish at best. I wonder how the next US treasury bond selling exercise is going to go? In NZ, the high NZD is about to smack our economy around a bit. Ditto for Oz. The housing bubbles in US, UK, Oz and to some extent NZ look potentially dangerous and any sudden shift in i-rates is likely to cause an immediate bearish effect. Evidience? Just look at last week.

To give you some idea of how bearish I feel ... TEL is suddenly looking like an excellent place to park all my NZ assets for the next year. Can one get any more bearish than that !!![:I] ... The only peice of good news I see this year is a stablising USD with a reversal trend firmly established by Nov 2.

Anyone ... give me a couple of 'feel-good' stories ... Crystal ball gazing appreciated too.

[OldRider]

I don't have any facts,but was reading in the last day or two about Asian growth,more particularly India & China.The suggestion was made that each of these people & economies had now sufficiently embraced a capitalist outlook that slowing their growth was more likely to be a problem than enhancing it.How much of a difference their enormous potential for consuming resources will make I can't say, but it was suggested that sooner or later China would surpass USA as the powerhouse economy of the world.Maybe the growth in this area will compensate for a decline in both Europe & USA?

[Mr_p_yu]

Sorry Belgarion, can't help you out there :(:(

I am very bearish about things myself[xx(][xx(][xx(]

More evidence to support this:

In the NZ herald today "Figures from Barfoot & Thompson showed the average house sale price sank from $422,961 in December to $382,439 in January" and regardless of holiday or not seem to be the bubble is going to burst and soon!! [B)][B)][B)] (blackeye for some people)

To put this more arrogantly I think the local real estate market price have risen to a level of unrealistic returns and this is simply due to the "irrational exuberrence" of investors. Just watch them fall.;););)

Stock markets should have a major correction coming up (similar to 1987???) even the future PEs on stock such as AIA and most retail stocks looks completly out of line.

More doom and gloom to come. Sell now while you can!!!

[belgarion]

Yahoo chart show NZSE40 over last 2 years with 20/50/100 day MA. (http://finance.yahoo.com/q/ta?s=^NZ40&t=2y&l=on&z=l&q=l&p=m20,m50,m100&a=&c=)

There's a message in here somewhere [:I] .... Help!

[Capitalist]

Good call re TEL Belgarion.IMNSHO.

I am awaiting a reply from Mr "infometrics" Skinny. Your calls for the last 12 months have been hilariously wrong re the NZ market. I recall a Grim Reaper banner on your site :D Maybe you were just ahead of your time Gareth/Andrew?

But I agree with this:
Stop, children, what’s that sound?
Rampant domestic growth is resulting in a blowout in the current account deficit. Presently at 4.6% of GDP, we forecast the deficit to climb to almost 6% of GDP by the end of next year. That will eventually cap the rise in the dollar – our pick is sometime around the middle of 2004.

Swings in the exchange rate are rarely ever smooth. International financial market players are likely to wake up one morning and decide that New Zealand’s current account deficit has got bad enough. The punishment meted out by the market could mean that the currency drops as quickly as it has climbed over the last couple of years.

[bongo66]

The so-called housing bubble bursting? rather a slow-down than a burst is likely and as a consequence of that i beleive we may see sell-offs in the rental sector as those investors chase the higher yeilds available in equities.

Wot me biased? Bongo

[zyreon]

re housing bubble bursting...

It all depends, i.e. what is driving the price increase, is it pure speculative demand? if so then it is a bubble and will burst like a puss filled boil (ew thanks for the visual!).

But if it is supply driven (i.e. a lack thereof) then we would expect things not to apocalyse but to perhaps crab along.

anyway what is the housing market? ;)

even though there national average is up 'heaps' there is no doubt some areas where real estate prices have gone down, while other areas have violently out performed. micro v macro etc

anyway its some points to ponder

[Risk]

At the moment, I am feeling neutral (neither too bearish nor bullish).

I had been quite bullish until a couple of weeks ago, but since then I have been stopped out of several of my positions, and have currently only around 70% of my trading capital actually in the market.

the DOW trend still looks pretty good IMHO, so Im still buying, but there has definetely been a shift in my portfolio towards dividend bearing stocks (TEL being my latest buy last week as well)

[Gryffyn]

With Risk. Neutral at the moment. Happily out of property other than own house and bach.

Curious as to what happend to Telcom if our dollar drops relative to the US later in the year - will there be an o'seas sell-off? Ditto if Edison exit Contact - maybe some people taking profits while the dollar is good for them.

[belgarion]

More to worry about ... If OPEC hold current production level or worse, cut them, then it could all go so very 1970s ... Setting up a shaky stage for oil prices (http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BB4405AC1%2DEB7F%2D4C36%2DB3DD%2D259497C729 9B%7D)

[Gryffyn]

Belg - if the doom-sayers sway you, then where would you put your money to be defensive?

[neopole]

i am neutral to positive.
have spent the last 3 years building up a sizeable share portfolio, my farmlet is starting to earn money, our horse breeding is about to show returns. and have had 2 pay rises.
having said that,
i have been driving a $500 car, and living in a 45sqm box, and spending all my savings and income to develop what i mentioned above.
things are starting to look good.
but had a stink life the last three years.
but then i bought things that no one wanted.

where to from here.
TEL is a good place for now.
FPH FPA will be a better place is you can wait
GPG aways good
BLT ? thats my big punt.
how long will the $nz stay up? my guess by 2006 we'll be going downtrend and export companies will be on a long uptrend.
as for property.
rural south auck.
but must be flat.
all the horsey folk are movin in, and payin through the nose.
hint
BIG equestrian developments in the works, and the onion farmers dont want to give up their land to the la-de-da's and their fancy horses. but as always money talks.

[zyreon]

well done neopole, its good to see a success story (or at least on the verge of success)

on the surface it seems your doing it like the self made millionaires profiled in the millionaire mind, and the millionaire next door.

keep it up

[skinny]

...I reckon its time to be defensive for NZ assets at any rate...had hoped that the G7 meeting might have took some pressure off the floating currencies but it seems not. I've now reduced NZ financial asset holdings to only 20% of my portfolio and have kept only those shares I believe should not not be hit too hard by the currency (like TAY and RPL). The rest is off-shore: around 50% is in near-cash (Euros and AUDs) but I'm not as pessimistic as Belgarion and have the rest in shares, sprinkled between the UK, the US and South Korea (see the link offshore investing.)

BTW, Cap I am in no way connected with infometrics - have not even lived in NZ for the past decade !!! I do enjoy Gareth Morgan's rants though (as anyone who calls themselve Cap should ;)) and I suspect that they would be the 1st to admit that short-term currency forecasts are not worth the paper they are written on.

[willy_wonker]

quote:Originally posted by belgarion

Im feeling very bearish.

Im looking for good news but Im not finding much. Latest thing: UK Personal bankruptcies at 11-year high (http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982349973&p=1012571727085). Why is this an issue? Because, like 1993, central banks will need to move very carefully to avert the a potentially very damaging housing bubble burst and they may be too slow to avert higher inflation, which, once established, will return us to a sustained period of high i-rates.

This is much the same as the US. US recovery looks sluggish at best. I wonder how the next US treasury bond selling exercise is going to go? In NZ, the high NZD is about to smack our economy around a bit. Ditto for Oz. The housing bubbles in US, UK, Oz and to some extent NZ look potentially dangerous and any sudden shift in i-rates is likely to cause an immediate bearish effect. Evidience? Just look at last week.

To give you some idea of how bearish I feel ... TEL is suddenly looking like an excellent place to park all my NZ assets for the next year. Can one get any more bearish than that !!![:I] ... The only peice of good news I see this year is a stablising USD with a reversal trend firmly established by Nov 2.

Anyone ... give me a couple of 'feel-good' stories ... Crystal ball gazing appreciated too.



Sold most of my property portfolio mid-late last year 2003 and a very happy man indeed :):)

The signs are up with realty agents attitudes towards their clients and taxi drivers talking about property investments.

[wsheridan]

In my book there is never a time to feel bearish.

The market goes up, the market goes down - you just have to position yourself to try and beat the sheepish mentality of most investment "advisors".

With regard to your TEL comments - surely the time to invest in TEL was when it was having the crap beaten out of it on this forum last year. It's up more than 25% since then :D

[wsheridan]

And if australia drives our economy - we ought to be optimistic according to this

http://onenews.nzoom.com/onenews_detail/0,1227,254282-1-453,00.html

[thereslifeafter87]

I'm with wsheridan!

The market may go to hell in a handbasket, but individual stocks will still perform well over time.

I've just been looking at stocks in the US. Everyone is always saying how overvalued the US market is, but I've found that among the small caps especially everything is undervalued.

Companies like Dorchester in NZ (that sells at around 12x diluted earnings) sell for 5-7x earnings in the states. And I'm talking about companies with networths of up to US$1bill

With the NZ dollar at almost 70c US, now must be a great time to feel bullish as hell about investing in the US.

IMO there is never a good time to be defensive.

[Awryly]

And doesn't Warren Buffet agree with tla87?

[KJ]

I am with wsheridan-buy stocks with sound earnings growth,low PE's,high ROE's and high div yields.

So there will be ups and downs in the market-how can you time leaping in and out of the market?

If you hold quality stocks what does it matter? Divs keep flowing and accumulate more on the downs.

[Oracle]

KJ

Yes! A good formula for mediocrity. Some of us aspire to greater things.

[Lawso]

quote: quote from Oracle
A good formula for mediocrity. Some of us aspire to greater things.
Yes, and some of you lose your shirts. If sitting on nice little parcels of AIA, CAV, CEN, TEL, WPT, FBU, WAM, FRE, DPC, NUP and NUF is mediocrity, that's what I'll settle for.
Plus the occasional punt when I've got the cash, but not on the likes of PUR, ROC, thank you very much.

[Gryffyn]

Aspiring is one thing Oracle, achieving another. Some well managed companies on NZSE have produced consistent good returns. I like a balance of bankability like SKC, MHI, GPG and a few punts like TWR myself.

Shares like HBY made gains even when the NZ market was quiet.

[KJ]

Oracle-what's your problem?

The stocks that I have made reference to-the likes of DPC,TUA,CAV,HBY,GPG,RYM,STU,TPW-have returned me 45% last yr.

You consider this mediocre-a word that means "middling,second rate"

Please enlighten me with your expert comments and analysis or is the crap that you have just written the best that you can do?

What are the greater things that you aspire to? Dreaming?

[Prop]

Belg

If the Asians & the rest of the world pull there money out of the US to stem the rapid depreciation of there assets. They still need somewhere to put it. Their economies are very dodgy - Where better than godzone? No terrorist issues here, growing economy, lots of fluffy promotion in the media! They can come here on tax expensed holidays to check on their investments!

Great place, Great investment, no worries!

Sound convincing?!

All we need to do is get rid of the feminazis running the country and we will be in heaven!!!

[Oracle]

Those sensitive!

Why ride the cycle up and down? I prefer to be a stock picker & get out when the stock reaches maturity.

From past posts ..
CED Purchased 6 figure quantity .56 cents to $1. Sold at $2.70.
BRY purchased .30 sold .60 plus.

Reccommended MET approx 18 months ago. 6 figure quantity at around $1, sold recently.

Recent purchases RYM, HQP both around $1.65. Still hold HQP.

In the last few months have traded BCA, TWR, HNG & FKP (Aust) and still hold some.

Have purchased relatively large quantity TTP since Dec...20% in 6 weeks! Well- undervalued.

I sell my holdings, hopefully at an optimum time, & move on to the next one! KJ ...You have made 45%, but as you have said, you will watch it decline.

[The P.O.D.]

Oracle,

can you please give us your next pick?

[Oracle]

POD

TTP...They announce Thursday. Cannot see downside. nta has to be 64 cents at least. I have been buying since Dec. Should have bought more. Risk is, that they do nothing! Sincere, but I accept no responsibility.

POD (&KJ). Even oracles make mistakes. I bought and sold 30,000 GPG at around 30 cents in 1991, & had a good quantity of DPC at 8 cents. pre consolidation! Having dug out DPC, a broker told me, "no, they're not doing much."

[KJ]

Oracle-If you look at the stocks that I made reference to you can see that over the last 3 yrs their returns would average 100% plus.Why would one leap in and out of these-so you can pay tax and endless broker fees?

Of course one does not hold them for ever.If, IMO earnings growth is weakening then I would sell.I also look for new stocks,that fit my criteria,to add.In the last 12 mths I purchased MHI,HQP,& TWR.

As for your trading activities,I have no idea whether or not you make a profit-only you know that.From what I have read,most people lose money trading.

I do not understand your comment "you have made 45%, but as you have said, you will watch it decline"-please enlighten me.

[Oracle]

KJ

You have done well. When I made my mediocrity comment it was a general one, re the buy & hold philosophy. I do not believe I said that 45% was mediocre.

My comment re watching the 45% gain, decline, was from your statement that prices would decline and you would buy more. ie: not selling at the top, your gain would be eroded.

I consider that a decline in value is a loss, whether realised or not. I do not consider that riding a loss down is "defensive."

[Burgerbun]

Oracle..the same guy that said dont buy PVO or RPL while they put on 100% and 50% respectively.

Give me a break and change your name to something less deserving.[:p]

and tell the one the truth.

You must be soooooooooooo rich by now.....why does someone sooo incredible post on a NZX site,.:D:D:D

[Burgerbun]

and BTW...now you say BUY TTP....:D:D:D:D:D:D:D

like 3 years too late my wise one.[:p][:p][:p][:p]

20c would have been more like it.....

[KJ]

Oracle-to give you an example of buying stocks when they decline I would give the example of say CAV which has come off about 10% recently-IMO an opportunity to buy more because I believe that CAV is still in an earnings growth phase.

Now why would one attempt to sell at the top,buy back in 10% lower,pay 2 lots of brokerage fees plus the tax on the gain.

How often does anyone sell at the top and buy at the bottom? The few instances that I have tried have not worked for me.

[Oracle]

KJ

You may think differently in an overall market decline. If the market was to return to it's 2 year ago level. Could you forgo that opportunity!

[KJ]

Oracle-I have to admit that I have never been good at selling at the top and buying at the bottom-something that I think I share with most people.I have learnt ,over the years not to try.

What I am better at is not selling while stocks are uptrending and not buying while stocks are falling.

In the case of the general market decline that you quoted of course I would like to have been out at the top and in at the bottom.

The reality is that most do not know where the bottom is and it is very easy to get spooked and sell near the bottom.

My preference is to hold good quality stocks with the features that I have already stated.Wait..wait.. for the bottom and buy more.

I do not think that I am good at trading.Also I have no desire to spend my whole life on the computer.

[KJ]

Another point Oracle-when the market fell in Sept 01 it happened so quickly that I doubt that there was time to get out.

Quality stocks fell about 15 to 20% but by December they were back to where they were prior to Sept 11.

[devito]

Oracle
You
are
a
Ledgend!!!!!!!!!!!!!!!!!!!

[Awryly]

Hard not to agree with this:


quote:[FBU]Chief executive Ralph Waters, an Australian, had one thing to say to investors.

"New Zealand is the most unusually pessimistic environment I have ever encountered. I don't think we're ever going to change it."

[Oracle]

Devito

So are you, Danny!

[Awryly]

Easily explained by all those poisonous reptiles, man-eating crocodiles, covetous neighbours, religious wars, dictatorships, and famine we're consistantly afflicted with. [V]

[Awryly]

Or do we just drink too much Speights?

[Burgerbun]

quote:Originally posted by Oracle

POD

TTP...They announce Thursday. Cannot see downside. nta has to be 64 cents at least. I have been buying since Dec. Should have bought more. Risk is, that they do nothing! Sincere, but I accept no responsibility.





And back to your December levels.
I guess the Oracle sold at 42c yesterday tho.:D:D;);)[:p][^]

[The P.O.D.]

Oracles pick of TTP is a classic example of over confidence when in reality no one knows what the future may hold.

Last year was a particularly good year on the sharemarket. Any body could pick a few stocks that went up. This then leads to a feeling of over confidence in picking a winner.

In reality, Oracle would of looked at the previous 6 months or so and saw a nice rise in the share price. Then, with an announcement due today he would assumed it would go up further.

However, good on him for sticking his neck out and I think we can all say we suffer at times from the exact same situation.

[The P.O.D.]

By the way...

TTP went from 42 to 36.

and I have made several equally as bad calls over the years based on over confidence....and so has cloudnine.

[Oracle]

POD

It is but a temporarily blip. But yes the loss has been made as I still hold. An "opportunity loss."

Looks to me like price manipulation. Good result. Good Balance Sheet. A case of fluctuasian. Winston has it right!

[Burgerbun]

yip, just a 4 year "blip" at current bank rates in a day. -17%.



could you give us your next tip?[8D] oh wise one.

Buy more at 36c now?

[Oracle]

C9

Yes!

[Halebop]

I both trade and invest and do either when each seems most sensible. A dogmatic approach to such a dynamic field as investing seems suicidal to me. I'm up a gross 132% since March '03 (My financial year) and expect to pay a lot of tax on my trading activities and very little tax on my investing activities. And guess what? Sometimes I got it right with my picks and sometimes I got it wrong. And I also figure pretty much everybody did great this last year.

I don't feel the need to argue semantics about it or score points at someone's expense. However, if someone presents an opposing view to one I hold and can present some logic, a theme, some rational analysis or even a hair-brained theory then I might actually gain something from the process. I generally don't gain much by just being slagged off in someone's post - except a healthy dose of disrespect for the poster.

If I can steer us back closer to the topic for a moment - I often have a feeling about the market as a whole and again sometimes I'm right and sometimes I'm wrong. Consequently, I tend to bet on situations and specifics rather than market consensus. I find it a lot easier to analyse a single value proposition than to work out what equities or interest rates are going to do in general. This way when the market melts down and I'm holding a bundle of equities (it'll happen some time or the other...), at least I'm partially insulated by having bought at 50 cents in the dollar in the first place. In the worst case I get to consol myself by knowing I own a portfolio worth 25 cents in the dollar! ;)

[craic]

By Bill Mann
February 12, 2004


If there were any doubt that speculative activity is back, this should settle it: The major online brokerages, including Ameritrade (Nasdaq: AMTD), Motley Fool Stock Advisor selection Charles Schwab (NYSE: SCH), E*Trade (NYSE: ET), and Toronto-Dominion Bank's (NYSE: TD) Waterhouse have seen an explosion in daily trading volume.

Whereas Ameritrade's daily trade volume in 2002 rarely exceeded 140,000, this past week it announced that it had set a record on Jan. 20, with 326,000 trades, and averaged 254,000 for the month. Trading volumes for options similarly shattered all-time highs this past month, more than 60% higher year over year. Options volume is heavily weighted toward calls, with puts trading at substantially greater time premium. Translation: People think that the markets will continue to climb. Margin balances, predictably, are skyrocketing.

This past weekend, Barron's excerpted from Baupost Group principal Seth Klarman's annual letter to shareholders. Klarman is perhaps best known for his now-sadly-out-of-print book Margin of Safety and is an extremely successful value investor. In his letter to shareholders, Klarman wonders just "what today's speculators could possibly be thinking" buying stocks, bonds, real estate, just about any asset class at present prices.

But the key to Klarman's discomfit comes not in spite of the horrible losses of the last few years, but because of them. A friend of mine described it this way: There really has been cash on the sidelines in the last few years, and we're in the midst of a rush to deploy it. People have waited out the trough, and are now trying to ride the wave upwards. They don't want to miss out.

And you know what? He's right. That's exactly what's going on. People fully expect that there will be people tomorrow who will buy the same overpriced securities they themselves bought today. Valuation? Yeah, like it matters. Things are going up. That's what matters. This puts into perspective the anger that our warnings on companies such as Sirius Satellite Radio (Nasdaq: SIRI), Internet Capital Group (Nasdaq: ICGE), and Ivanhoe Energy (Nasdaq: IVAN) have engendered in stakeholders.

When the most important thing about an investment is whether it goes up tomorrow, then someone pointing out weaknesses in the overall investment thesis constitutes a direct threat. When momentum is the driver, such roadblocks are deadly, because investment success is predicated on someone being willing to buy it at a higher price, at any point. That such opinions have no bearing at all on the business is beside the point. A momentum stock must maintain its momentum at all costs.

No speculator left behind
One of the main reasons that people feel more confident this time around is that they have learned a lesson from 2000: If they had only been able to cut their losses during the last slide, they'd have been just fine. There are many ways people are doing this, but one of the most popular is a tool called the "stop-loss." The theory is that if you place an automatic sell, say, 8% below your purchase price, your stock will be sold before you can get badly, badly hurt. It's a game of letting your winners run and cutting your losses, and it's nothing new -- sort of like idiot insurance.

I certainly recall a few people for whom the stop-loss got them out of the Junipers (Nasdaq: JNPR) of the world when they were really expensive. In a market where billions of shares are traded each day, there's not much reason why stop-losses wouldn't work. Still, of the people who employed heavy use of stop-losses in the last meltdown, I don't know of many who became filthy stinking rich as a result. But each of us knows plenty of folks who didn't use any stop-losses and were shellacked.

The way I see it, this is a spurious correlation. You don't get hammered in the market for want of a stop-loss; you get hammered buying overpriced crap in the first place. But this is exactly what's happening today. We're in 1987 all over again, and everyone's holding

[Tinker]

Craic,

Thanks for that. Thought provoking. The difficulty I have with the thoughts he puts forward is that the mania that can strike markets can be very prolonged and are part of the ebb and flow which overall results in a reasonable return ( vis a vis I thought the DOW was overpriced when it went through about 7000 96/97 and stayed out of that market!). Still developing my thoughts on investing ( for value) on big rises. I don't use stop losses, relying instead on the premise that value will show through in the end and where the company does not perform as expected well 10 or 20% extra loss is not a tragedy. I am NOT a trader so their techniques are not so applicable for me[^]

Anyway should just about have it sussed the day before I fall off my perch:D. Ahhh the art in the science of investing eh.

Cheers

[belgarion]

This thread was started by me on the 7 Feb this year. Since then ... BULLs and BEARS have evened each other out ....

DOW going nowhere (http://finance.yahoo.com/q/ta?s=%5Edji&t=6m&l=on&z=l&q=l&p=m20%2Cm50%2Cm100%2Cb&a=ss%2Cvm&c=)

S&P 500 going nowhere (http://finance.yahoo.com/q/ta?s=%5Egspc&t=6m&l=on&z=l&q=l&p=m20%2Cm50%2Cm100%2Cb&a=ss%2Cvm&c=)

... while this is not the same in all major markets, many have gone nowhere since Feb.

In NZ, the NZ50 has shown rises since Feb on the back of some good divies but the NZ40 hasn't gone anywhere much (it never did really). In Oz, indicies are still ticking along, and those with significant Chinese exposure have ticked along nicely.

For me in NZ, the last few months have been stories of many stop losses being triggered. TEL and AMP to name a few. When I started looking at where to replace my dollars, I started looking back at brokers and investor comments. A single thread was common: "Geo-political risk."

At this current junction my position is cash and near cash (near cash being high earning, range bound stocks property stocks, etc.) Why?

With Bulls and Bears fairly evenly balanced, a significant 'geo-political' event, particularly one in the US or one involving Oil, could very easily trigger a significant fall. "Where US markets go, others follow."

Domestically, my view for the next six months, perhaps even until after the UK elections, is that there could be 50% to 100% catching a 'geo-political event (or events) inspired' bounce rather than 10% simply holding and praying. This bottom-feeder is ready, even feeling a little smug. (BTW, Chinese investment returns over the last 12 months have staggering!).

[skinny]

Belg - one non-terror event that could break the present impasse we see between bulls and bears at the broad index level is the Fed tightening later this Month. Concerns over it are way overblown IMO and we could see a good rally once the medicine has been administered [8D].

In any case as you know the index masks a multitude of sinners and saints and sector specific stories.
E.g. if you had of bought energy stocks (as I've been raving about) or even an energy sector ETF you would have done well stateside year to date [^]

Similarly, if I had sold the portfolio of NZ stocks in Feb I'd be spewing today - would've missed a 25% rally in NPX, a 16% rally in MHI and a 12% increase in CMO - and thats not counting the div. yld of +7% in these ones.

That all said I am accumulating cash at the moment - mainly to wait for the NZD to go up further against the AUD again to fund further Oz purchases ;)[:p]

[clearasmud]

doing the same thing Skinny!

[bongo66]

Its always time to be defensive come to think of it its always time to be on the offence.

Pick good companies and the rest will follow. Outside events will always affect markets but long-term its wiser to be in the market at all times-when you have picked right.

Those macro events(silly term so ill call them outside events)we have no control over but when they occur it is a wonderful opportunity to add to those companies one already has.

Not a fence sitter, No really!! Bongo

[Gryffyn]

Bongo, macro does not = outside events, it's used to differentiate it from micro events which may also be external. Good to see you're still with us.

[bongo66]

Oh Griff, I stand duly corrected :) I should include Macro and Micro events in my term "outside events" as both are out of ones control.

The red wine is getting to me:)

Navel gazing the big and the small, Bongo

[Burgerbun]

quote:Originally posted by belgarion

Im feeling very bearish. Im looking for good news but Im not finding much. Latest thing: UK Personal bankruptcies at 11-year high (http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982349973&p=1012571727085). Why is this an issue? Because, like 1993, central banks will need to move very carefully to avert the a potentially very damaging housing bubble burst and they may be too slow to avert higher inflation, which, once established, will return us to a sustained period of high i-rates.

This is much the same as the US. US recovery looks sluggish at best. I wonder how the next US treasury bond selling exercise is going to go? In NZ, the high NZD is about to smack our economy around a bit. Ditto for Oz. The housing bubbles in US, UK, Oz and to some extent NZ look potentially dangerous and any sudden shift in i-rates is likely to cause an immediate bearish effect. Evidience? Just look at last week.

To give you some idea of how bearish I feel ... TEL is suddenly looking like an excellent place to park all my NZ assets for the next year. Can one get any more bearish than that !!![:I] ... The only peice of good news I see this year is a stablising USD with a reversal trend firmly established by Nov 2.
Anyone ... give me a couple of 'feel-good' stories ... Crystal ball gazing appreciated too.

Posted by Airbusboy at the beginning of FEB 04.[:I][:I][:I]


Yip, good advice:D:D:D...NOV 2nd has gone[|)]

Anymore advice you could give us...All my friends cant wait for your next one.[:p]

9 months down the track and

The NZX has had a shocker;)

Most investors on Sharetrader have had a shocker;);)

Housing market imploded[:o)]




How do you get up in the morning Airbusboy[?]




[^][^][^][^][^][^]
so satisfying exposing your pathetic attempts at analysis!

[rmbbrave]

Many have been worried about the demographics of the developed countries for a long time.

During the last 20 years of the 20th century baby boomers have been investing for the retirement driving up the price of property and equities as they invest. Soon they will start to retire, sell their assets to maintain their lifestyles. The big uncertainty is whether there will be enough younger people to buy these assets. If not prices will fall.

Japan and Germany have been badly affected by this demographic "time bomb" but so far the English speaking world has not suffered badly.

Whether they will or not no one really knows. I personally am optimistic. Germany, much of Europe and Japan (from 2007) have shrinking populations. English speaking countries' populations are still growing and are forecast to keep growing for the next 50 years at least.

[Gryffyn]

RM - one factor is that the baby boomers haven't all had large families - they still are / will be asset rich when the shuffle off and these are passed down enriching (somewhat unfairly) the next generation.

[Placebo]

This is an argument Gareth Morgan has used to dismiss the idea of buying multiple rental properties. Eventually they get sold, instant market overload, supply exceeds demand, price crash. Good theory Gareth! RMBB I'm not sure those populations are actually in decline. Their natural fertility rates have fallen but population is still being augmented by migration, so there is a net gain. The biggest change that has occurred is the growth in single-occupant housing, so there is growth in the housing market without a corresponding growth in population. This is a big trend in NZ too (part of the reason for the inner-city apartment boom).

Anyway.

Just a thought too. What's wrong with being defensive anyway? To use a sporting analogy, when I was a wee nipper my secondary school soccer team had a coach who knew a thing or two; his approach to the game was to coach strategy from the back forward. In other words, he first taught us to defend, before focussing on attack. So the first thing is to ensure you aren't beaten. And if you look at the most successful teams (including the likes of the Crusaders, this year's Wellington Lions, the ACT Brumbies, the Wallabies and World Cup-winning England) they are very effective on defence (some would say defence-oriented), and are winners. ****nal, in the English premiership, have always been defence-oriented (or they were -- "Boring Boring ****nal!") and successful nevertheless.

I don't see why a defensive strategy can't also be effective in investing. Belgie mentioned TEL -- why not? It has an attractive yield and isn't losing value. With a couple of good defensive stocks in your portfolio you can then go on the "offensive" with a couple of riskier options. I'd say this is my overall strategy. I have a couple of solid yield stocks and a couple I would have considered riskier, it has worked for me so far.

My 2c worth.

[patsy]

quote:Originally posted by rmbbrave



Japan and Germany have been badly affected by this demographic "time bomb" but so far the English speaking world has not suffered badly.

Whether they will or not no one really knows. I personally am optimistic.



One of the reasons for the difference in Japan's demographic time bomb (that has somewhat exploded already) versus the American one is that the population of the USA is, in average, 8 years younger than that of Japan.

[belgarion]

Since my original post, I continue to feel 'bearish'. Ive sold 4/5 of TWR. Ive sold all TRH i still had. Ive sold a few MHI above 7.90 and a few HBY. Sold TEL. Sold AMP. Selling NZR. Bought CNZ, GPG, ABA, SCT and CTL (plus 2 undisclosed others) but overall a big net seller. Zero leverage, 25% cash in NZ banks and moved quite a bit of cash into yuan. Two consequetive years of circa 40% ... It can't stay that way.

For me 'bearish' is not wanting to buy much of anything. As they say, no one ever went bust booking a profit so Im doing it.

Now, in NZ, I wait. [:I] In China ... ;)

[nelehdine]

HBY up to 618 this afternoon Belg ... a record high, plenty left to go for in this one I think. I can understand your reasons for bearishness, but I feel with good stock selection the returns available from the stockmarket compared to banking the money in the local BNZ far out-weigh the risks. Lots of talk about the NZ economy heading into a new "paradigm" ... I'm a buyer and have put my money where my mouth is by adding an additional $120,000 purely NZ stocks to my portfolio in the last 8 weeks. Currently showing a 7.85% return over those few weeks !! not bad when you extrapolate that to an annual rate.

[skinny]

Its difficult to make an overly defensive argument for good ol NZ when you have great stats for the September quarter:

- NZ unemployment rate down to 3.8%, full time employment growth 1.4%, wage inflation steady
- Retail sales growth up 2.4%; 7.5% for the year

And other positive macro factors such as:
- inflation looks like peaking at 2.5%
- interest rates now on hold
- oil prices now coming down (esp in NZD terms)
- the NZ twi pretty much moving lock-step with the terms of trade, largely neutralising the impact of the currency appreciation on exporters incomes.
- NZ's main trading parters either booming or trucking along well (Australia, Japan, US, China, UK - thank goodness we don't rely on Germany!)
- massive fiscal surpluses...

The real issue IMO is: Are NZ equities over priced today given the NZ economy looks like it will remain strong into 2005?
Or in other terms, will corporate earnings be strong enough next year to justify the relatively high aggregate market p/e we see in NZ currently?

[Packersoldkidney]

They are saying the same thing about the ASX as well, Skinny. In other words, upside priced in to share price - to what extent is the big question.

[clearasmud]

[quote]Originally posted by belgarion

Since my original post, I continue to feel 'bearish'. Ive sold 4/5 of TWR. Ive sold all TRH i still had. Ive sold a few MHI above 7.90 and a few HBY. Sold TEL. Sold AMP. Selling NZR. Bought CNZ, GPG, ABA, SCT and CTL (plus 2 undisclosed others) but overall a big net seller. Zero leverage, 25% cash in NZ banks and moved quite a bit of cash into yuan. Two consequetive years of circa 40% ... It can't stay that way.

For me 'bearish' is not wanting to buy much of anything. As they say, no one ever went bust booking a profit so Im doing it.


Belg, if you are happy wth money in China then perhaps u could consider Aust. resourse and oil stocks.
We are still IMO in the early stages of a bull market fuelled by China

[belgarion]

CAS ... But Oz dollar is floating ... Renmimbi is not ... ;) ... I suspect you're right re China and bulls but I'm seeing (and expect to continue to see) better returns in China.

Skinny, Nel ... Your points are well noted. In 1987 people were saying the same thing. That throwaway line aside, from what Im seeing, everyone is being squeezed and the smiling happy faces you see from CEOs are actually grimances as their margins are squeezed. The cycle is tightening and tightening ... it will need a release valve soon but Im darned if I can fgure out what the valve will be. When in doubt, hunker down.

[skinny]

quote:Originally posted by belgarion
Skinny, Nel ... Your points are well noted. In 1987 people were saying the same thing. That throwaway line aside, from what Im seeing, everyone is being squeezed and the smiling happy faces you see from CEOs are actually grimances as their margins are squeezed. The cycle is tightening and tightening ... it will need a release valve soon but Im darned if I can fgure out what the valve will be. When in doubt, hunker down.



In 1987 we didn't have record imports of capital equipment. Or off the handy infometrics web site:

"Gross fixed capital formation has risen by 10% on average over each of the last three years. That is more than twice the rate of GDP growth, and suggests a reasonable degree of capital deepening"

So, part of the release from the increasing capacity constraints and tightening margins is likely to come from increasing labour productivity - which given the benign path of wage growth NZ has had so far should lower business unit labour costs. In fact I believe you have said yourself before Belgarion that you expect NZ labour productivity to pick up ;)

[belgarion]

That's true Skinny ... Problem is that China is doing it too. And the ROC is far better. ;)

[COLIN]

Mr. B:
In the spirit of the new arrangements to keep extraneous material away from the "Markets" forums I suggest you delete the abusive and insulting content of your "byline" - before others respond with counter-offensive language and we revert to the former problems.
Thanks, in anticipation.

[Packersoldkidney]

I guess what you are saying Colin is its best to be defensive than offensive. Fair call. Tell that to the...... ahhh bugger it, I'll change it to suit the lies.

[GladiatorNZ]

Peter Lynch once said "the market climbs a wall of worry". I'm almost always long - I take the Lynch approach of concentrating on picking good companies that I'd be happy to own in a downturn.

Nonetheless, the NZ market is looking a little pricey at the moment, and quality stocks are hard to come by. And the NZD is overvalued. The AUD is overvalued too, but I like Australia's long term propects somewhat better than NZ so am selling NZ shares to buy Australian shares at the current favourable exchange rate. Apart from Oz, I have also bought up Chinese assets in the expectation that the Chinese currency will rise.

[Burgerbun]

quote:Originally posted by belgarion

Im feeling very bearish.

To give you some idea of how bearish I feel ... TEL is suddenly looking like an excellent place to park all my NZ assets for the next year. Can one get any more bearish than that !!![:I] ... The only peice of good news I see this year is a stablising USD with a reversal trend firmly established by Nov 2.





Belgarion posted this in FEB 04. One of the best years for the NZX and many sharetraders.

in his own words....

WHAT A DORKWHAT A DORK!!!


squirm AIRBUSBOY squirm

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[Burgerbun]

quote:Originally posted by skinny

Its difficult to make an overly defensive argument for good ol NZ when you have great stats for the September quarter:

- NZ unemployment rate down to 3.8%, full time employment growth 1.4%, wage inflation steady
- Retail sales growth up 2.4%; 7.5% for the year

And other positive macro factors such as:
- inflation looks like peaking at 2.5%
- interest rates now on hold
- oil prices now coming down (esp in NZD terms)
- the NZ twi pretty much moving lock-step with the terms of trade, largely neutralising the impact of the currency appreciation on exporters incomes.
- NZ's main trading parters either booming or trucking along well (Australia, Japan, US, China, UK - thank goodness we don't rely on Germany!)
- massive fiscal surpluses...

The real issue IMO is: Are NZ equities over priced today given the NZ economy looks like it will remain strong into 2005?
Or in other terms, will corporate earnings be strong enough next year to justify the relatively high aggregate market p/e we see in NZ currently?




Followed by the TRUE FACTS...

Airbusboy, now argue your statement you made in FEB this year regarding the next year with the above facts firmly keyed into your tiny little mind...

NOW YOU HAVE THE FACTS.

TRY AIRBUSBOY TRY really hard.


:D SO VERY VERY SATISFYING :D
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[Runswifscissors]

quote:Originally posted by cloudnine


Followed by the TRUE FACTS...

Airbusboy, now argue your statement you made in FEB this year regarding the next year with the above facts firmly keyed into your tiny little mind...

NOW YOU HAVE THE FACTS.

TRY AIRBUSBOY TRY really hard.


:D SO VERY VERY SATISFYING :D
[^][^][^][^][^][^][^][^][^][^][^]

I have friends and acquantances who are bears about the stock market,they worry about high levels of debt and over-valued shares, I have done very well by not following their advice ..... so far. When I've read about share market crashes in history its not unusual, for someone to have predicted them first. eg JK Galbraith in 1987. They seldom get the timing right but they have got the fact of a badly overvalued market right.
Therefore I listen to what such people are telling me, and make up my own mind.
Clodnine you clearly have a magnificent obcession about Belgarion. But instead of comming here and showing off to impress him, Why don't you buy him flowers and chocolates like a normal person?
Andd give the rest of us a break ok?

[duncan macgregor]

C9 I must agree with runwifscissors stick to the market or take your chidish obsession to the other site and insult each other there.
Get a life for petes sake. all the best macdunk

[Phaedrus]

Markets reflect the collective mood of their participants, and tend to have an equilibrium point - Linear Regression analysis is helpful in determining where this "balancing point" lies, and Standard Error analysis is helpful in determining where the "extremes" lie. The two combined provide a trend-based assessment of market movement. Standard Error Channels are calculated by plotting two parallel lines above and below a linear regression trendline. The lines are plotted a specified number of standard errors away from the linear regression trendline. On the chart below, the dotted line is 2 standard errors, the solid line is 3 standard errors.
The Index may extend outside the channel for a short period of time, but if it remains outside the channel for a long period of time, a reversal in trend may be imminent. This is when it would be time to be defensive, not now.

http://home.ripway.com/2003-11/39768/NZ501001.gif

[Runswifscissors]

And who decides where to draw the channel lines and the scale of the graph? and the length of tiime the graph covers?

[patsy]

I'm not sure whether there is any point in analysing whether the "market" is or not overvalued unless one is investing in a passive index. After all, if one does the homework right ragarding an individual share , it doesn't matter too much if the "market" as an aggregate does well or not... this works both ways, whether the market overall goes up or down.

[duncan macgregor]

PHEADRUS, good chart, it gives a factual view of where the market has been, and a hint of what might happen. Looking at the snail trail is when you draw the guide lines in. The idea of TA as a tool is to use the guide lines of the past, to know when to get out when past guide lines are crossed. The market over reacts both up and down, and to be successfull in my opinion is to understand that fact.
The market will continue to rise until the day comes that an event or panic sets in, and most of the gains will be lost. The FA investors will lose the most the people with stop losses will get out first. FA and common sense and a bit of detective work is my buying recipe, and TA and a stop loss my insurance policy. Property is my first choice this is only a game to be played. macdunk

[Phaedrus]

Runswifscissors, you ask :-
Who decided where to draw the channel lines? and the scale of the graph? and the length of time the graph covers?
I did, of course. You seem to be trying to imply that these choices have a significant measure of control over the conclusions to be drawn from such a chart.
(1) Where to draw the channel lines. Parallel to the Linear Regression line, at such a distance that nearly all of the action is within the lines. (The 2x Standard Error dotted line encloses about 95% of the action.)
(2) The scale of the chart. Do you mean the Y axis? I have no discretion here - it must cover the appropriate Index range - no more, no less.
(3) The length of time covered by the chart. This is a relatively new Index. I can do no more than plot all the data I have. Surely you would not want me plot less than this?
However you draw the graph, whatever the scale, whatever the time period, this Index is in a steady long-term uptrend, one that is showing no signs at all of weakening as yet. THAT is the point here.

Patsy, I wasn't trying to analyse "whether the market is or is not overvalued". The objective was to assess whether Belg's Bearish sentiments are shared by the market or not - whether there is evidence of any developing market weakness. The graph shows a strong linear uptrend - about as Bullish as it gets. This is a time to be fully invested, not a time for caution.
In my experience it is best to be out of falling markets (or short). No matter how much homework you have done, sound stocks generally fall too. It is good to be at least partly cashed up at such times - you are then well placed to pick up subsequent bargains.
In my opinion, there are times when it pays to be defensive - but now is not one of them.

[Burgerbun]

Main point. This self proclaimed guru/dork said, he was extremely bearish in FEB 04.
Belg asks for Facts...

I find him one, Skinny brings up the lastest figures, Phaedrus backs up with TA....and I want to hear his answer.

scissors...why dont you try starting your own thread?
I found this one for myself.. NOT YOU, you have made some comments...now if you dont like this thread, you know the title, so don`t open it, or at least dont contribute THEN complain...
as for Mac, oh dear, another rubber necker.

[^][^][^]
still very satisfied

[brother coy]

ah hahha nicee charts phreedee wheres mes sees wheres my picks for nz boom started righta at da bottoms of ya chart hahha gloat:D

[brother coy]

By David Karsbøl
Research Analyst
Published: Nov. 16 2004, 12:39 GMT
Reality vs. Market Perception

--------------------------------------------------------------------------------

Bush stays on and so will the twin deficits and the dollar slide. Long-term yield will rise.
Watch out for the financial state of Corporate America. Favor capital goods makers.


1. What is the Bush-administration all about? In short, Bush, Rove and Cheney are very focused on being business-friendly, on implementing the Wilsonian Dream (?to make the world safe for democracy?), be generous to the military, to improve home ownership rates and to institute culturally conservative legislation for same-sex marriage, abortion etc.

The Bush administration?s efforts on the first of these points was already more than evident in his first term. But a second Bush administration may throw its weight behind the moral issues near to Bush?s heart as many saw the 2004 election as a referendum on morality. In other words ? The Real Bush ? the Christian Conservative may once and for all kill off the US trend toward increasing secularism from the heyday of liberalism decades of go. In fact, there are three reasons why Dubya II will be more The Real Bush than Dubya I over the coming four years:

First of all, Bush will appoint two and possibly three Supreme Court justices out of nine. Two justices are closing in on retirement and another one has cancer and is likely to withdraw within four years. Two more conservatives like Antonin Scalia and Clarence Thomas could dramatically alter the kind of decisions coming from the supreme judicial body of the US for years to come.
Second, Bush now doesn?t have to focus on getting reelected and on raising money for a third term (the constitution only allows two terms). This will tend to make him less dependent on the public and more likely to legislate in accordance with his ?true self?.
Third, his first term was over-shadowed by the election chaos in Florida and the broadly held view that his presidency was illegitimate. This notion has vanished with the small but significant margin to Kerry in the recent election result.
For the above reasons, four more years with Bush will drag the US economy and society further in the same direction as the first term, but it will be done faster and by a more confident and (critics will say) more arrogant president.

That means a further growing cultural divide between Europe and the US (and possibly also within the US). The risk to the US economy is that the willingness of foreigners to invest in the US would diminish. This is especially the case if Bush plays the religion-card too often (investors like secular capitalism better than theocracy).

The world economy is divided in a peculiar sense ? investors will have to choose between a capitalistic economy run by Christian evangelists and a social democratic Europe run by morally bankrupt secularists. Secularists and European moderates will increasingly choose to place their assets in Europe or Asia and that especially goes for Muslim investors, who will demand a higher premium to support a country that will be even more associated with the Christian religion.

Although the Bush-administration has promised to cut the budget deficit in half over five years, such promises tend to be forgotten by the politician that made the promise, once he gets elected. The Iraq situation will not get solved ? it even has the potential to worsen and call for a heavier (and costlier) military engagement.

On hard-core economic issues this means more deficit spending and therefore, higher long-term yields (especially when foreigners become more reluctant in their purchases of US assets), and a lower dollar. Even the dunces running central banks will find out the hard way that the dollar is a one-way bet.



2. Contrary to market perception, there are some red flags regarding the financial state of Corporate America. Yes, I know corporations are swimming in cash, but their operating leverage is extremely

[Gryffyn]

cheers bro - nice post, sound reasoning without drama

[Risk]

Buying NZX50 stocks is being defensive!

[Burgerbun]

quote:Originally posted by cloudnine

Main point. This self proclaimed guru/dork said, he was extremely bearish in FEB 04.
Belg asks for Facts...

I find him one, Skinny brings up the lastest figures, Phaedrus backs up with TA....and I want to hear his answer.

[^][^][^]
still very satisfied




Now even more satisfied than Minder...Belgarion found making one of the WORST calls this century.

outing a hypocrite and one so full of himself
[^][^][^]
Utterly Satisfying



bye bye Airbusboy bye bye

[Risk]

quote:Originally posted by cloudnine
Now even more satisfied than Minder...Belgarion found making one of the WORST calls this century.
outing a hypocrite and one so full of himself
[^][^][^]
Utterly Satisfying
bye bye Airbusboy bye bye


cloudnine, can you please control your childish behaviour and keep the off topic posts to the OT forum...Im sure the site admin would appreciate that, and so would we.
Thats why we asked for an off topic forum in the first place.
I thought you did too, so who is the hypocrite?

Being defensive in your investing is all in the eye of the beholder.

Buffet stayed out of IT stocks for years while the IT sector was booming because it doesnt agree with his plan.
some saw that as a mistake.
but did he make the right choice after all?

looking at just the NZX50 as a guide to wether you should be defensive is over simplistic. There are many other factors which traders take into consideration.
-is the P/E too high?
-what are interest rates like? can I reduce risk by getting a good rate at the bank instead?
these are just 2 examples, and there are thousand other factors which make the market.

If your plan is to survive in the long run, it must be able to preserve capital...and to adapt.

There are times to take bigger risks in the quest for bigger rewards.
Times to be aggressive and buy volatile and speculative stocks.
imho the best time for this is at the start of a bull market.

there are also times to be defensive. to buy dividend stocks, to hold cash, and to buy conservative stocks like those found in the NZX50.

You can still make lots of money by being defensive. You just take on less risk.

[halcyon9]

quote:Originally posted by cloudnine


quote:Originally posted by cloudnine

Main point. This self proclaimed guru/dork said, he was extremely bearish in FEB 04.
Belg asks for Facts...

I find him one, Skinny brings up the lastest figures, Phaedrus backs up with TA....and I want to hear his answer.

[^][^][^]
still very satisfied




Now even more satisfied than Minder...Belgarion found making one of the WORST calls this century.

outing a hypocrite and one so full of himself
[^][^][^]
Utterly Satisfying



bye bye Airbusboy bye bye

[Major von Tempsky]

NZX50 up to yet another record, shortly to break 3000? eh?
I've remained fully invested in NZ equities all the time.
Wasn't it earlier this year/late last year that the NZX50 was struggling to break and hold above 2000?
Convinced yet Belge?

[Paper Tiger]

Yes it is all going great but one day inevitably things will turn. Unexpected events happen. Perhaps we should all have a defensive strategy in place at all times and be ready to implement it.

[belgarion]

ING Looking good .. ;)

[Longtack]

Paper Tiger Posted - 25/11/2004 : 07:23:50 AM
--------------------------------------------------------------------------------
Yes it is all going great but one day inevitably things will turn. Unexpected events happen. Perhaps we should all have a defensive strategy in place at all times and be ready to implement it.

Gotta have that exit strategy, in all things, as Ananda says.

[Major von Tempsky]

Why?
Compare now to 1987.
Very low inflation vs high inflation.
High dividend yields, imputation tax credits, low P/Es, companies which actually make and do things rather than paper shufflers.
Vs low dividend yields, no tax imputation credits, high P/Es, a plethora of "investment companies" which shuffled paper in each other.
Rather than repeating mindless brainless mantras you need to look for signs that mean something e.g. widespread and continuing falls in company profits, a credit squeeze, government deficits, a collapsing NZ dollar, low or negative economic growth, bad words from the RBNZ.
In the meantime I'm making hay, you guys can hide under the bed and read Revelations, sell everything and buy Kiwi bonds if you want to.

[halcyon9]

:D:D:D:D:D:D:D:D:D

[Runswifscissors]

quote:Originally posted by Major von Tempsky

Why?
Compare now to 1987.
Very low inflation vs high inflation.
High dividend yields, imputation tax credits, low P/Es, companies which actually make and do things rather than paper shufflers.
Vs low dividend yields, no tax imputation credits, high P/Es, a plethora of "investment companies" which shuffled paper in each other.
Rather than repeating mindless brainless mantras you need to look for signs that mean something e.g. widespread and continuing falls in company profits, a credit squeeze, government deficits, a collapsing NZ dollar, low or negative economic growth, bad words from the RBNZ.
In the meantime I'm making hay, you guys can hide under the bed and read Revelations, sell everything and buy Kiwi bonds if you want to.

High private debt levels?

[K9]

quote:Originally posted by cloudnine


quote:Originally posted by belgarion

Im feeling very bearish. Im looking for good news but Im not finding much. Latest thing: UK Personal bankruptcies at 11-year high (http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982349973&p=1012571727085). Why is this an issue? Because, like 1993, central banks will need to move very carefully to avert the a potentially very damaging housing bubble burst and they may be too slow to avert higher inflation, which, once established, will return us to a sustained period of high i-rates.

This is much the same as the US. US recovery looks sluggish at best. I wonder how the next US treasury bond selling exercise is going to go? In NZ, the high NZD is about to smack our economy around a bit. Ditto for Oz. The housing bubbles in US, UK, Oz and to some extent NZ look potentially dangerous and any sudden shift in i-rates is likely to cause an immediate bearish effect. Evidience? Just look at last week.

To give you some idea of how bearish I feel ... TEL is suddenly looking like an excellent place to park all my NZ assets for the next year. Can one get any more bearish than that !!![:I] ... The only peice of good news I see this year is a stablising USD with a reversal trend firmly established by Nov 2.
Anyone ... give me a couple of 'feel-good' stories ... Crystal ball gazing appreciated too.

Posted by Airbusboy at the beginning of FEB 04.[:I][:I][:I]


Yip, good advice:D:D:D...NOV 2nd has gone[|)]

Anymore advice you could give us...All my friends cant wait for your next one.[:p]

9 months down the track and

The NZX has had a shocker;)

Most investors on Sharetrader have had a shocker;);)

Housing market imploded[:o)]




How do you get up in the morning Airbusboy[?]




[^][^][^][^][^][^]
so satisfying exposing your pathetic attempts at analysis!




Belgarion the moron, with it dead wrong again

great reading

[Major von Tempsky]

NZSE = 3246?
I've previously pointed out its election year and NZ shares nearly always do well in election year.
Especially with a looming right wing victory eh, Belge?
Besides which the NZ ratios of gross yield, P/E etc are hard to better around the world and investing in NZ from NZ avoids exchange rate worries and takes advantage of imputation credits.
Pity if Winston Jean-Marie le Pen Peters puts a stop to immigration though. We need it to fuel economic growth and because effete middle class NZ wimmin are more interested in doing up their house and overseas holidays than in having babies.
Of course its a route whereby "the meek will inherit the earth", the rest are too ego-centric to breed. Remuera, Khandallah and Fendalton are biological suicide if thats any consolation to you Belge.

[Phaedrus]

Is this a market that you want to be part of? YES.
Is this a time to be defensive? NO.
Has there ever been a time for caution over the last 2 - 3 years? YES.
When was this? For the 2 months between 23/3/05 to 23/5/05.
Why? Because the general uptrend faltered then.

Here is a chart showing the strong Bull market of the last few years. Six indicators have been used here to monitor the NZSE50 Index. They are :-
(1) Trendline
(2) 80 day Exponential Moving Average
(3) 5% Trailing Stop
(4) 40 day Variable Moving Average
(5) 15x Average True Range Trailing Stop
(6) 40 day Directional Movement Indicator.

These 6 indicators show excellent corellation, all triggering within a very short period of time. While I do not trade the NZSE50 Index as such, I use it to provide a general overview of the market and thus give me some idea as to my chances of individual trading success. Generally speaking, I do not buy during a falling market.

http://img.photobucket.com/albums/v418/789456/NZ5071001.gif

[trackers]

remember clearly all the shouts of 'run for the hills' when nzsx50 was in 2900 territory...now is a great time for that timeless cliche 'look at the scoreboard!'...

[K9]

More like, look at the original thread post

the call was made to run and hide in FEB 04


see how that little blip looks now

the index then was around 2400

33% later, the bears are still running around in the woods blind.

[Base Trader]

Globally this run has further to go (opinion of course). We see the Fed rising by 25bps yesterday and immediately the 10 year bond yields fall from 3.99% to 3.91% as the long dated - short dated spread trade plays out.

This bull bond market appears to be stopping at nothing and despite the rising oil prices this is the story for 2005. Cheap money is driving the US mortgage market and the US consumer driven growth that the US is experiencing. By proxy - China is also benefiting. At present the reflationary impact of low interest rates are over coming the drag of oil prices.

This is a solid result for global equities. Global commodities (and commodity companies) are benefitting from growth in the developing nations. Low interest rates are fueling US consumer spending. Finally, low interest earnings are driving cash elsewhere in a search for return.

For NZ corporate earnings, however, the picture is mixed. The drag of higher interest rates and higher energy costs (especially if we have seen the NZD peak) will hit corporate earnings for internally generated cashflows. But given any significant give up in value tends to come from the US I do not see the market tipping out of bed (that maybe what Phaedrus TA is catching too). However, I would take great care in choosing stocks as this market will punish non-performers.

I have sold FBU, CEN and taken my carpet bagging WHS profits. I will review WHS again but for now I am happy enough. I now just holding fringe stocks in NZ - HQP, SKX, MSL, and GPG - all based on corporate earnings reasons/view. Also hold AIA but that is another matter.

[craic]

Why is AIA another matter?

[Base Trader]

I have AIA but I am unable to trade in the stock at present so I am not analysing it.

[K9]

quote:Originally posted by Phaedrus

Is this a market that you want to be part of? YES.
Is this a time to be defensive? NO.
Has there ever been a time for caution over the last 2 - 3 years? YES.
When was this? For the 2 months between 23/3/05 to 23/5/05.
Why? Because the general uptrend faltered then.

Here is a chart showing the strong Bull market of the last few years. Six indicators have been used here to monitor the NZSE50 Index. They are :-
(1) Trendline
(2) 80 day Exponential Moving Average
(3) 5% Trailing Stop
(4) 40 day Variable Moving Average
(5) 15x Average True Range Trailing Stop
(6) 40 day Directional Movement Indicator.

These 6 indicators show excellent corellation, all triggering within a very short period of time. While I do not trade the NZSE50 Index as such, I use it to provide a general overview of the market and thus give me some idea as to my chances of individual trading success. Generally speaking, I do not buy during a falling market.

http://img.photobucket.com/albums/v418/789456/NZ5071001.gif


This post got a bit lost on last page..worth keeping

[K9]

Time to be defensive? Convince me Im wrong Please! (Belg Feb 04):D

[:I][:I][:I] fool


NZX HITS NEW HIGHS

need any more convincing Belgarion[}:)]...just look at your call on Phaedrus` chart FEB 04


were you wrong?;)

[:I][:I][:I][:I] dork

[Major von Tempsky]

I was trying to find the piece I put in at the beginning of the year where an admiring news media quotes Funds managers "experts" - usually the then current head of AMP investment - pronouncements on the year ahead. From memory the words of wisdom for this year were that there would be no more 20% rises and the most we could expect would be 5% plus whatever dividend.
Every year these Funds manager "experts', that the media grovel to, get it substantially wrong so I eagerly read what they say with a view to doing the opposite. And this year its happened yet again.
And again around Xmas the media will be cosying up to the investment manager of AMP to hear more pearls of wisdom drop from his lips. It was pointed out that this is election year and the NZX does well in election year but they took no notice.
Still, I do expect some softness after the election.
It would make sense for the media to interview someone with a successful track record instead of the wallahs they go in for. But on the other hand I would hate to miss what they thought so I could do the opposite ....;)

[K9]

NZX and DOW at 3 year HIGHS...Dow hit 10650 friday.

Whatta you say belgarion[:o)][:I]...you are pretty good eh!!!


another useless call from the KOP OUT KING

K9 what DOW are you talking about 10827.12 on 24/12/2004 10940.55 in March so how the hell can 10650 be a three year high. Or have you been smoking electric puha.

[patsy]

quote:Originally posted by ENIGMA

K9 what DOW are you talking about 10827.12 on 24/12/2004 10940.55 in March so how the hell can 10650 be a three year high. Or have you been smoking electric puha.


I think it should read S&P500, not DOW.

[K9]

Delirious Norma!

yes the S&P500 at 4 year highs

NZX at New Highs!

DOW, well, The doomers were saying it was going to implode at 7200.

just look at it since then.



What does Belg do, apparently loses $40k overnight in the UK...takes his Pounds...which have been losing strength...and sells them to buy in India.

[Capitalist]

And US deficit is plummeting too K9 :D:D:D

What was it we said 2 years or so ago - that the US was on the verge of a tremendous boom that would make many people rich. So it has come to pass. It ain't gonna go into a recession - no way - it has not long come out of one. Onwards and upwards ;)[:p][8D]

[K9]

NZX SETS NEW HIGH

3348



you have been convinced;):D:D:D

[Placebo]

One observation: If you are of a bearish nature, then the higher the index goes the more uncomfortable you become. In other words, the greater the gain the more inclined you are to feel that `this must end soon'.

If a downturn does come, the bearish person then feels vindicated. How often have we seen the bears pop up here and say `I told you so many moons ago'?

Seems to me, for bears, the market is either in a downturn or about to go into a downturn. Odd point of view, IMHO.

[K9]

I call it the "one day Roger Finch" syndrome


Of course the market will go down sometime after a 70% run,

but when you call it like Belg, just before a MASSIVE leg up and historically record breaking performance...


When does this guy admit humbly he was DEAD WRONG...

just as you said, wait for the NZX to reverse 300 points and say I told you so;):D:D

[Alpine Dragon]

Should try talking to so called "gurus" like Van Tharp. If you read his Newsletters http://www.iitm.com/products/newsletter.htm, He seems to always bang on and on about this "secular bear market". I for one, can't see any secular bear maket, only a secular sideways one going on in the US (DJIA). There will most probably be a correction in the next year or so, but as far as I am concern, the NZX and ASX markets are still in there secular bull phases, with no sign of any secular bear market (at least yet). It could be that gurus like Van Tharp have their charts upside down, but who knows...

The only reason I can think of gurus doing that is to drum up sales for their books, motivational cassette tapes and other such merchandise by invoking fear in the clueless mum and dad market.

Since I'm more focused towards Long term buy and hold rather than short term swings and intermediate trades, Come next correction, I would pile back in, hold and forget the histeria, particularly by what I believe are drummed up by overrated gurus, infact you could almost use them as a contrarian indicator for long term entry points, I believe.

[K9]

Careful dragon...

said GURU (that started the post)

is almost a Legend!!!...

and that must deserve some respect[?];)

:D:D:D:D:D

[belgarion]

Watching oil prices filter through the system :D ... Lining up those who will be most (and least!) affected in NZX. Worldwide, some economies will power through higher oil and others will tank.

Big adjustments coming. Some have been telegraphed to the market, some are more subtle. The next two/three years will be about 'adjustments' caused by oil prices and how they filter through the entire supply chain.

At present, far too many pundits seem to be looking forward with 'rose tinted glasses'. Bears seldom do. Bears turn to Bulls at the bottom of cycles. My read is that Bulls outnumber Bears by a considerable margin at present and I believe we're near the top of a cycle. Being bullish at the top of a cycle isn't generally that rewarding.

Unlike many, I still see inflation as a big issue. Walmart, who are very 'connected' with consumerism see the writing on the wall too.

How will central banks react? Where will I-rates go? What will consumers do?

Quite happy with where I am. [8D]

[K9]

:D:D:D:D:D

the same crap you were spouting nearly 2 years ago when the NZX was 2400?

you are truly a guru of dorkish proportions.

BTW...hows SAN;)

[luckysexice]

Becouse of the trade deficit and the pool profit result is this a singn of inflation going worse and market going down again

[K9]

quote:Originally posted by belgarion

Watching oil prices filter through the system :D ... Lining up those who will be most (and least!) affected in NZX. Worldwide, some economies will power through higher oil and others will tank.

Big adjustments coming. Some have been telegraphed to the market, some are more subtle. The next two/three years will be about 'adjustments' caused by oil prices and how they filter through the entire supply chain.

At present, far too many pundits seem to be looking forward with 'rose tinted glasses'. Bears seldom do. Bears turn to Bulls at the bottom of cycles. My read is that Bulls outnumber Bears by a considerable margin at present and I believe we're near the top of a cycle. Being bullish at the top of a cycle isn't generally that rewarding.

Unlike many, I still see inflation as a big issue. Walmart, who are very 'connected' with consumerism see the writing on the wall too.

How will central banks react? Where will I-rates go? What will consumers do?

Quite happy with where I am. [8D]



so...Buys AIR and SAN:D


how dumb can you get[|)]