Black Monday

[BlackPeter]

"Blacker Monday Looms" ...
http://www.zerohedge.com/news/2015-0...ech-china-fold

it always does ... and some day all the doomsday prophets will be right ... until they are wrong again. My portfolio didn't tank a lot last Monday (3% down at the worst point) ... and most of the dip came back by now anyway. Instead of worrying from crisis to crisis it might be a better strategy to maintain a well diversified portfolio based on companies providing essential (or desirable) services and products with a track record of solid earnings.

And looking into the "China crisis": The Shanghai Index is still 42% up compared to just 12 months ago, and people are worrying whether the Chinese economy is really growing by 7%, or maybe just by 6% or shock horror maybe just by 5%. If we take just a wee step back, than all these worries look a bit silly, don't they?

Sure - markets are currently volatile ... but there is an easy remedy against that: As long as you own solid stocks which you purchased at a reasonable price - don't worry about the SP jumping around - and definitely don't sell if the SP is cheap.

Maybe we should talk instead about an actually quite good earning season ... actually my retirement stock(s) did quite nicely, and I am as well reasonably confident about a number of manufacturers and service providers who all should benefit from the lower NZD.

Life is good ... and while this Monday is quite grey (weather wise) I am sure the sun will shine again ... and this prediction is likely to be much more reliable than the prediction of the next dooms day scenario.

[Bobcat.]

Brent Oil has just now broken through $49/barrel, after breaching $50/b just 5 hours ago. It will probably bounce around a bit from here until the US Equity markets open tonight but this together with Futures sitting at -183 (Dow) and -23 (S&P500) is not a good sign (well, it's a good sign for Bears who are now short but not good for the bulls amongst us).

Copper and other commodities are also falling, and the Euro (EUR) and Yen (JPY) are rising...which you might've noticed happened right through to the night of the 25th (last Tuesday). Again all signs that US Equity markets will open much softer tonight.

The question is not will Equity markets fall again (probably this arvo and tonight) but to what extent and for how long.

Chartists like their hammers, crosses, EMA's, etc. Others prefer to be swayed more by company fundamentals; and they are both useful...but right now I'm finding the best indicators for Equity market direction are Index futures and the currency markets, with the EUR and JPY seemingly the safe haven of choice for the big players.

[Major von Tempsky]

As an economist I have to markedly differ from the somewhat ignorant rhubarb above, obviously written by people who are neither economists nor historians! I'll keep it short and simple.

(a) you can only really analyse economic history since 1945 since it is only since then that Keynesianism has held sway and governments (developed countries, most of them) and central bankers have understood what is going on. Friedmanism is the more recent approach used to conquer inflation and use interest rates and restrict aggregate demand.

(b) what's happening in stockmarkets is only ONE of the factors that Central Banks analyse before moving. Other factors such as inflation, economic growth, the balance of payments on current account, the state of employment, the various factor inputs known as "land" and the effect of current technological change.

"Bull" needs to go back to school.

[sb9]

http://www.smh.com.au/business/china...31-gjbled.html

Interesting read...

[Bobcat.]

Nikkei is currently down about 2%, with the Heng Seng down about 1%.

I know it depends more on today's and tonight's full sessions of trading, but...it does look like we will have another correction to the downside tonight on Wall Street. It would not have been foolish of those holding nzx or asx stocks prone to a sell off to have sold out today -- it's prudent risk mgmt.

Discl: apart from some precious metal stocks and a few small caps, I'm about 70% cashed up...and waiting.

[skid]

sorry Major--You may be an economist but you have provided precious little facts to back up your statemnts

Its interesting that those labeled ''worriers'' actually have very little reason to worry as they sit on the sidelines and watch this drama unfold with others investments.

Tomorrow will come--but many may be somewhat poorer due to complacency.

For the record--I didnt COME to Thailand to preserve my profits--I came to Southeast Asia compliments of the profit I preserved---That ''play money''--ie.paper profits/losses translates into real life experiences----for those that have the sense to listen to real facts ,rather than feel good cliches ,and end up with some actual money to do things-im available for travel tips...

Dont mistake caution for negativity---Think Ill go out for a coffee and to rent a motorbike for my last 2 week tour up north. before heading back to NZ for the spring..(maybe a camper van next?)

[stoploss]

As an economist I have to markedly differ from the somewhat ignorant rhubarb above, obviously written by people who are neither economists nor historians! I'll keep it short and simple.

(a) you can only really analyse economic history since 1945 since it is only since then that Keynesianism has held sway and governments (developed countries, most of them) and central bankers have understood what is going on. Friedmanism is the more recent approach used to conquer inflation and use interest rates and restrict aggregate demand.

(b) what's happening in stockmarkets is only ONE of the factors that Central Banks analyse before moving. Other factors such as inflation, economic growth, the balance of payments on current account, the state of employment, the various factor inputs known as "land" and the effect of current technological change.

"Bull" needs to go back to school.

Ok if you are going to make it personal by calling people ignorant , can everyone just remember- " Economists were invented to make weather forecasters look good "

[Bobcat.]

OK, well I happen to have a University degree in Economics and have learned enough about the 'discipline' to know that if you line up a dozen economists in a row they will all (whether deliberate or not) point in many, many different directions.

In itself, economics is usually found wanting..needing another discipline or two (finance, political science, a social science such anthropology, psychology or philosophy, even mathematics) to find its feet on Planet Earth well enough to offer a balanced worldview.

That's just my opinion.

[Crackity]

OK, well I happen to have a University degree in Economics and have learned enough about the 'discipline' to know that if you line up a dozen economists in a row they will all (whether deliberate or not) point in many, many different directions.

In itself, economics is usually found wanting..needing another discipline or two (finance, political science, a social science such anthropology, psychology or philosophy, even mathematics) to find its feet on Planet Earth well enough to offer a balanced worldview.

That's just my opinion.

Just for you Bobcat

Economists are people who are too smart for their own good and not smart enough for anyone else's. - See more at: http://www.equities.com/editors-desk....8gijYHhZ.dpuf

[couta1]

I doubt whether your average retail investor running a profit or a paper loss(Big or Small) would worry about the current trend, what will the trend be in 5 years time? Most would be happy to just keep collecting dividends unless they need their money right now, I wouldn't be foolish enough to realise my big paper losses at this time( I've learnt my lesson big time doing that in the past)