Your favourite NZX stock down? You are not alone.

[Paper Tiger]

The last week has been not been one of the best for the New Zealand Stock Market.
For whatever reason prices started to move downwards last week after Mr Bollard decided that interest rates should go up. Certain companies have faired better than others, in particular those that make up the SCI have been particularly badly hit, I guess that the big companies are regarded as a "safer" bet at the moment.
So instead of worrying about why a particular stock is heading south look at the broader picture of market sentiment as a whole. OK, maybe a stock has it own particular circumstances and you should be worried/selling up. Maybe this is the start of a bear market (But only time will tell this). But we are not the masses, are we? There are opportunities out there, go buy them.

Disc: Hoping to recover ;)

[Halebop]

I see it differently right now PT. I think there are individual opportunities (in any market) but "the market" as a whole presents a dubious value proposition.

Is it highly over valued a'la '87? No chance. Is there only good news factored into share prices? I think so. Interest rates was the first piece of bad news. Another one or two will prompt a seachange.

[arjay]

It is interesting timing considering Dr Cullen is at the same time telling us we should invest in shares.

People pulling out to support their property investments. Wait for the next interest rate rise and then the skin and hair will be flying mortgages (floating) will be at least 10% by end of year possibly 11%. IMO

[Major von Tempsky]

To me it seems that sentiment is changing more and more to bearish. The latest news from the US - General Motors bad projections and the US 2004 current a/c deficit won't help. I'm surprised that the Dow has only dropped 68 at the time of writing. To me, in 1987, it seemed to be the $17 billion monthly current a/c deficit (much worse than other months at the time) which precipitated the 87 Crash but others seem convinced it was some US labour market report.
Personally, I'm still convinced the NZ sharemarket is a very good place to invest, particularly by comparison with overseas. I have a large wad of cash coming up to invest in a month or so, so I'm very keen to see the NZX dive. But I won't be encouraging it to dive and I'm not selling.
I think Cullen got it right but his timing was out - a month or two later would have been the time to spout.

[Gryffyn]

Enigma - I think the average punter who has property investments probably doesn't have any shares. See recent figures on NZ shareholders. More likely the investors who are yield sensitive are looking at the less risky returns in bonds and secure terms.

[Cooper]

I agree with Halebop. It's not overvalued, but I think expectations of profit growth for the next few years were based around the past three or four years, during which the environment (interest rates, dollar rate, the fact that NZX companies had been overlooked by most during the previous ten years and were therefore undervalued) was conducive to a bit of upwards movement.
With the dollar at historically high levels reducing profits for exporters (I don't quite agree with Bollard's assertion that the dollar is where it should be due to commodity prices), a high OCR choking off investment, high debt levels, companies being valued at a "fair" rate etc it's simply a matter of adjusting our expectations and becoming a little more defensive in stock selection and, perhaps, in terms of ensuring that DD is done diligently.

I honestly don't think we'll see much (any?) more in the way of rate rises, Enigma. The effects of the last rise will not come into play for a while, and surely Bollard has the sense to wait and see what happens.

THE KING says when you BOYS have been in the BIZ for 30 years you see blips all the time,, but when the mob sees something OH they know the world is Doomed,, so make money on the fall make money on the rise but to the MOB its easy only on the RISEING MARKET..

So stick with what you got and IMPROVE.. [^][^]

[The P.O.D.]

To sort of quote from Bob Jones...

When Cullen is telling you to buy shares then it is time to sell. End of story.

[Bling_Bling]

The NZ market has never been over valued compared to other overseas market. NZ market have always traded at a discount and will always stay that way due to our relatively small size market. The real test now is this years profit announcement. If companies start to post profit below expectation, bye bye pork pie.

[bongo66]

rrrr, wheres the long term thought...:D

[Lawso]

I imagine there are Stop Loss and Sell signals all over the place today for some people. But don't forget that at around 3120 the NZX50 still looks very healthy. Few would have predicted this level 12 months ago. While I agree with PT, The King and others that there are good buying opps at the moment, I'm comfortable with my decision today to put more money into MGP's offer, due to pay 9.86% per unit in y/e March '06.

[Paper Tiger]

One week on from starting this thread and NZSX had only 19 rises and lots of falls today.
I hope you guys have some spare cash in your pockets ready to buy when your favourite stock, now an unbelievable bargin, turns round.

[limegreen]

I thought mine had on a little bit of recovery. I'm still (at the moment) happy with my "bargains", but I'd prefer they didn't become any more bargainish

DISC: recent acquirer of FBU & WAM + spare cash

[Gryffyn]

all a matter of time-frame really

[Dazza]

would it be a reasonably analyst to say that
every year, around mid march to ealry april, the market dips a bit?

due to alot of the blue chips going ex divi.

ive ceertainly noticed that *wish i had waited till now or a bit longer to acquire my AIA.

current co. ex divy:
TEL?
AIA
SKC
PBG

to name a few...

all in all a good learning experience for me, i will check this time frame in years to come , i have learnt :D

[whiteheron]

Be very careful with stock selections from now on

I believe that stocks that show any sign of weakness from now on will be punished severely by the market
If profit forecasts are not met or exceeded values will fall back sharply
Companies that have had rising profits for some years but find that they are unable to maintain profit growth will be especially vulnerable to sharp downward price corrections
Why?
Basically for two reasons
Firstly , the reduced profit in dollar terms making them look less attractive
Secondly , and probably more important , they will have their P/E ratio re rated downwards
This results in a double whammy effect on the share price
If anyone wants me to I can prepare a relatively simple example with hypothetical figures to ( hopefully ) illustrate this

Is it time to ring the bell for the top of the market ?
Maybe not quite , but I believe it is very near
As nobody will be ringing the bell we will have to make a judgment as to where we are at or wait and see --- time will tell , as always
But the answer will not be clear until some time after the actual event


secondly

[Mick100]

Sounds like it's time for a closer look at gold related investments. It's the best insurance you can get in a bear market. If all the markets turn down globally then gold will shine.
The gold miners are very well priced at the moment - good buying opportunities.


Mick

[Dazza]

or oil??! our lovely NOG oil?!

wouldnt u say gold is already priced high.. 440? per ounce.. but then again im a n00b..

[Mick100]

quote:Originally posted by Dazza

or oil??! our lovely NOG oil?!

wouldnt u say gold is already priced high.. 440? per ounce.. but then again im a n00b..



The oilers appear to be fully priced at the mo while some of the goldminers, eg CRS, are way under valued
Take your pick
It's not a difficult decision for me to make.

Mick

[Dazza]

my bad didnt read last statement 'gold miners'

thought u were gonna exit the share market to buy gold :D

[bermuda]

If China can make it then the price will fall.
If China has not got enough of it then the price will rise.

Buy Mineral,Oil,Coal and Agricultural stocks.

p.s.China is currently putting another 10,000 cars on the road....like...per day.

[Major von Tempsky]

Its in the nature of stockmarkets that they have down days as well as up days.
When did the NZX last have a decent fall? Seems like ages ago, sort of before living memory category.
If one is a long term value investor with some cash....one starts licking one's lips in anticipation at this stage....
More, more....

[limegreen]

It's some ugly open this morning. nothing I've looked at looks happy!!

It looks like there are a number of sellers, but almost no one buying...

[craic]

Sadly the structure of the taxation system means that you can sell just before the dividend date and buy back afterwards and probably make more than you would had you held on for the dividend and paid the taxes. For some of us, mare than you might imagine, the picture is dark.Because my other half is in the 60-65 age bracket, Superannuation is reduced 70 cents for every dollar we earn over $4,000 per annum and this is on the gross amount. So,if the dividend is $1 paid ,the gross dividend is $1.50 and the tax on that is $1.05. Tell me of any other regime where you pay more than you get. Granted taxation at years end will balance the books slightly. In other words it pays to sell out at this time of the year and sit back and wait for the prices to drop. Wait a couple of months until the 31 March tax circus has passed and all will return to normal just as it did last year and the year before.

[Bilo]

Craic
I am thinking that this year, the tax could break the markets back, it is on top of an abused export sector, the highest interest rates in the world, a large and increasing balance of payments deficit. Do I need to continue? The issue of a re-traction is when not if.

[Bilo]

ANd I should have added:
Because Bollard has stuffed up, and
the minister should have been talking tax breaks.

[Placebo]

Never mind all that macro stuff, what this really means is that I am now doing great in the "Selling Short' comp :D

Every cloud and all that...!