Predictions

[nextbigthing]

Anybody brave enough to predict where things are heading? Tomorrow? In a week? In a years time? Merely a blip or something more serious? For how long?

[Joshuatree]

Up and down

[warthog]

I walked on to the next corner, sat on a bench at a bus stop, and read in my new book about Heraclitus. All things flow like a river, he said; nothing abides. Parmenides, on the other hand, believed that nothing ever changed, it only seemed so. Both views appealed to me.


Ross MacDonald, The Chill (1963), Vintage Crime/Black Lizard edition, pp. 209-210

[NZSilver]

Less up more down - run for the hills!!!!!! (With cash not stocks)

[bull....]

I predict in 5yrs time my meridian shares will have delivered some very nice dividends and buybacks and special dividends

[gv1]

I predict in 5yrs time my meridian shares will have delivered some very nice dividends and buybacks and special dividends
So this is better of the lot of power co's.

[bull....]

So this is better of the lot of power co's.

in my opinion, but im sure others will disagree

cook strait cable upgrade will allow more sth island power to enter nth island
growth powershop Australia
growth powershop nth island
potential transmission line review
potential renewables opportunities once abbot in aus is dismissed

[littletramp]

Can I make my first post by asking a question? Given (1) the increasing mistrust and uncertainty of the safety of funds in the Banks again in the USA and many other countries (around preferential debts, risky loan assets etc and the dubious/untested priority of depositors rights) along with (2) the low deposit rates available compared to the company yields available, (3) the total lack of return from precious metals and risk of capital loss from any downward price movements with risk on driving investment, (4) the small returns from bonds and (5) the non sense of holding cash (under the bed), where are the fund managers going to put the huge sums of money that continue to roll in from investors? They do not seem to be sure which part of the world they consider safe haven for currency - USD or Euro? My question is simply - what will those fund managers do with the money which just rolls in every day? Logic suggests, that while companies somewhere in the world can make a profit and pay a dividend greater than the interest rates available and perceived global risk is manageable they will invest into shares and it will just be a bit volatile? Any other thoughts? Cheers.

[Corleone]

in my opinion, but im sure others will disagree

cook strait cable upgrade will allow more sth island power to enter nth island
growth powershop Australia
growth powershop nth island
potential transmission line review
potential renewables opportunities once abbot in aus is dismissed

What about the growing possibility of Labour/Green govt as the economy hits skids with dairy and less export demand from China coupled with general frustration regarding the house price fiasco. I picked up a few gentailers just before the last election and reaped the benefits, wouldnt we see a similar drop and reduced divies?

[smpl]

Inflation to set in. Property rises accordingly. Rates rise.
Equities down. Bonds down. (Shock horror to retail investors)
Dollar and Eur Up. NZD down. Bitcoin to test new highs.
Commodities to infinity.

[bull....]

What about the growing possibility of Labour/Green govt as the economy hits skids with dairy and less export demand from China coupled with general frustration regarding the house price fiasco. I picked up a few gentailers just before the last election and reaped the benefits, wouldnt we see a similar drop and reduced divies?

labour has ruled this out now I believe.
anyway competition is rife in the electricity sector look at the switches occurring and the discounts available

[gv1]

Thanks mate.


in my opinion, but im sure others will disagree

cook strait cable upgrade will allow more sth island power to enter nth island
growth powershop Australia
growth powershop nth island
potential transmission line review
potential renewables opportunities once abbot in aus is dismissed

[Zaphod]

I expect the lines companies to be the next target, despite being highly regulated. In politics, there must always be a 'fall guy'.

[Biscuit]

Logic suggests, that while companies somewhere in the world can make a profit and pay a dividend greater than the interest rates available and perceived global risk is manageable they will invest into shares and it will just be a bit volatile? Any other thoughts? Cheers.

I don't think that is logical. Dividends are only part of the equation and markets are driven by expectations of movements in share prices.

[Biscuit]

Personally (for what its worth) I doubt we have seen the end of this correction. I've been profit taking for a while now, sold a few into the bounce this morning and am sitting pretty much 50:50 cash:shares which is where I'm happy being for the (un)foreseeable future.

[klid]

Donald Trump will win the US election. And that will influence everything else.

[Joshuatree]

Hee
Am reposting this piece (on Investing Strategies and Secular bear markets thread)from Craigs;) as its pertinent to our investing psychology ahead.

A snippet from Cam Watson at Craigs on NZ SUPER FUND REFERENCE PORTFOILO REVIEW
4. Recent returns have been exceptional. Over the past five years the Fund has returned 14% a year, “considerably ahead” of the 8.5% annual return they expected. In fact, the actual return of 14% is in the 85th percentile of the range of expected returns, i.e. it is very high. They concluded their discussion on past returns with a candid health warning that probably applies to all investors; “Along with these abnormally good periods, we also expect that there will be periods of abnormally low returns and we remain focused on the Fund’s returns over the long-term”.
5. They have cut their forecast long-term returns. The Fund last reviewed their expected returns in 2013. At this time their midpoint expected long-term return for the reference portfolio was 8.9%pa. They have reduced this expected return to 7.7%pa, due principally to a reduction in their expected return on cash from 6.0% to 5.0%. This lower cash rate also reduces the expected return on shares as the Fund uses a formula that calculates returns on shares by adding a return premium to the return from cash, so a lower cash return leads to lower returns on shares as well. This is another takeaway for all investors – the smart people are factoring in a period of lower returns ahead, perhaps we should too.

[skid]

Donald Trump will win the US election. And that will influence everything else.

Geez,dont talk like that Klid--That scares me more than the economy--although I guess if they elected Bush(es) nothing would surprise me!

Disc.--totally out of Share market for now--cash -small amount precious metals,just in case-property---no debt

[Cool Bear]

most likely stocks will be (going up and down but) on a general downtrend. NZX50 well less than 5000 by year end? Time to take a few months break from the market as my shares is now about only 10% of portfolio. For this year, I am just about breakeven. So if the worst is to happen and remaining shares is to halve, I will only be down by less than 5% for the year.

[BlackCross]

Real EPS in the US has flattened. Looks like the end of the bull to me. Perhaps not a bear market though, rather lots of volatility.

[troyvdh]

absolute bollocks...the US is rebounding...Ive just spent 3 weeks in Northern china...slowing down...I doubt it....if folk here are complaining about there shares being worth now...blah blah...your totally in the wrong game...I know its probably old fashioned...the sharemarket aint a casino....for those lamenting recent events...grow up....

[Hectorplains]

All things flow like a river, he said; nothing abides.

Nah, the Dude abides.

//www.youtube.com/watch?v=6WUTlCTi7fg

[Dentie]

Disc.--totally out of Share market for now--cash

Heard of OBR Skid?

[Joshuatree]

"A river does not strive ; it flows around the boulder"

[nextbigthing]

Everything up again overnight. How long does a dead cat bounce last, or was this simply a large pothole before the last climb to the cliff when the bridge finally gives way?

[kiora]

Everything up again overnight. How long does a dead cat bounce last, or was this simply a large pothole before the last climb to the cliff when the bridge finally gives way?

Follow the economic cycle.It indicates the next pothole when interest rates go up ? ??

[bull....]

Follow the economic cycle.It indicates the next pothole when interest rates go up ? ??

historically us stock markets have continued to rally for 1 -2 yrs after the first interest rate hike but nothing is guaranteed

[biker]

Commodity prices recover dramatically over the next 12-18 months

[xafalcon]

It's hard to see much up-side for coal & iron ore. Were is the demand going to come from?

Soft commodities are a different situation. Likely to start returning to historical average values. Timeframe uncertain

[xafalcon]

Commodity prices recover dramatically over the next 12-18 months

It's hard to see much up-side for coal & iron ore. Were is the demand going to come from?

Soft commodities are a different situation. Likely to start returning to historical average values. Timeframe uncertain

[Biscuit]

How long does a dead cat bounce last, or was this simply a large pothole before the last climb to the cliff when the bridge finally gives way?

That reply should get the prize for most metaphors in a single sentence, well done! Or are they similies or analogies?

[nextbigthing]

Haha thanks. What's the prize? :t_up:

[Biscuit]

Haha thanks. What's the prize? :t_up:

I don't know, but if it were up to me, it would be huge! If someone asked me to write a single coherent sentence with 5 metaphors in it, I would be completely stumped.

[blobbles]

My prediction is that we are in for a crash over the coming months. The market has been way too high for way too long, being pumped up with printed money and borrowed money. The jitters from the Chinese crash are just the beginning, wild swings down then up point to instability for me, the beginnings of a trend, the return of a bear market.

Of course I could be wrong about the timing, it will happen eventually anyway, but I suspect the next few months will see either a dramatic crash or the start of a downtrend. I just can't see how we can continue the upward trajectory from here, market has been way too frothy for too long.

[Bjauck]

My prediction is that we are in for a crash over the coming months. The market has been way too high for way too long, being pumped up with printed money and borrowed money. The jitters from the Chinese crash are just the beginning, wild swings down then up point to instability for me, the beginnings of a trend, the return of a bear market.

Of course I could be wrong about the timing, it will happen eventually anyway, but I suspect the next few months will see either a dramatic crash or the start of a downtrend. I just can't see how we can continue the upward trajectory from here, market has been way too frothy for too long.

You may well be right.
The NZX capital index is at about the same level it was in early 2007. Allowing for inflation of about 20% since then, it is actually down in real terms. On the other hand in our most international city, Auckland, house prices are up by over 50% since 2007. In the NZ context, perhaps all the quantitative easing that has been sloshing around World markets has resulted in cheap finance for NZ property investors and Foreign property investors to buy Auckland property. Of all investment markets in NZ perhaps it is the unregulated Auckland residential property that has "benefited" most from quantitative easing and will perhaps "suffer" most when more normal international money supply conditions return.

[winner69]

Looks like the world is well and truly stuffed

http://www.interest.co.nz/opinion/77312/oliver-hartwich-doom-and-gloom-global-economy-and-donald-trump-effect

[pak]

DT for president aye. Personally I think there are a number of triggers waiting to go off for a major event. Having Donald Trump is a new one to me.

[macduffy]

Looks like the world is well and truly stuffed

http://www.interest.co.nz/opinion/77312/oliver-hartwich-doom-and-gloom-global-economy-and-donald-trump-effect

Isn't it always?

The Kingston trio sang about it in the 1960's. Nothing much has changed, just the scenarios and the players - but somehow we seem to muddle along.

Incidentally, DT isn't a serious contender. He's just there to pressure/lobby whoever gets the nomination to do a few things his way!

;)

[nextbigthing]

My prediction is that we are in for a crash over the coming months. The market has been way too high for way too long, being pumped up with printed money and borrowed money. The jitters from the Chinese crash are just the beginning, wild swings down then up point to instability for me, the beginnings of a trend, the return of a bear market.

Of course I could be wrong about the timing, it will happen eventually anyway, but I suspect the next few months will see either a dramatic crash or the start of a downtrend. I just can't see how we can continue the upward trajectory from here, market has been way too frothy for too long.

There's another option though, sideways. Perhaps we will just track sideways with anything that has a good earnings record or moat etc maintaining its value or climbing slightly, while anything 'speculative' gets hammered until proven.

There seemed to be a lot of money piling into Spark for example. A lot of dividend stocks I follow have maintained their prices, frustratingly!

[skid]

Another possible scenario is a slow downturn like in Japan--a lost decade--I think those are the worst.

Remember when inflation was the big concern?--Now they're fighting for it

Of course good solid shares with divis will fare better than speculative stocks,but nothing is immune completely if the whole market is revalued.

[macduffy]

Of course good solid shares with divis will fare better than speculative stocks,but nothing is immune completely if the whole market is revalued.

Well, repriced rather than revalued!

:cool:

[skid]

Well, repriced rather than revalued!

:cool:

If shares are overvalued--then its revalued (of course thats a hard thing to know just now but its helpful to know that we are all thinking of things compared to the last few years (and even then what was the market valued at 1-2 years ago)---Its true though that price is a pendulum that often swings to far one way or the other--(how much is the real value of that dump in Grey Lynn?)

[Beagle]

Good time to take some chips off the table and buy a new "toy".

[nextbigthing]

Good time to take some chips off the table and buy a new "toy".

So you're predicting a bear market Roger?

[BlackCross]

Goldman Sachs just slashed its forecasts for China's growth over the next three years amid broadening pessimism over the health of the world's second largest economy......

http://www.cnbc.com/2015/08/31/goldman-takes-a-knife-to-china-gdp-forecasts.html

add in flat EPS growth in the States and it's hard to see a reason for a further bull run.

[nextbigthing]

The Chinese Government have stopped propping up the SHCOMP and most articles point to the policy changes in China as being what started this. It currently sits just above 3000, and the mid term average appears to be approx 2200. So perhaps we have a fall of about 30% around the world (as the world seems to be following China) and then we go back to 'normal'.

[nextbigthing]

'Westpac chief economist Dominick Stephens has forecast the OCR could fall to 2 per cent by the end of the year, from 3 per cent at present'

Wow 2%! That is low! Surely that has to provide a boost to the sharemarket.

http://www.stuff.co.nz/business/money/71738291/bnz-drops-oneyear-fixed-mortgage-rate-to-435pc

[GTM 3442]

'Westpac chief economist Dominick Stephens has forecast the OCR could fall to 2 per cent by the end of the year, from 3 per cent at present'

Wow 2%! That is low! Surely that has to provide a boost to the sharemarket.

http://www.stuff.co.nz/business/money/71738291/bnz-drops-oneyear-fixed-mortgage-rate-to-435pc

How much of a drag on the sharemarket did the rising interest rates prove over the past couple years?

[Bobcat.]

Global dairy prices have risen about 20% over the past month, housing demand is still an issue, and the economy is not heading into a recession like our next door neighbour whose kept their interest rates steady.

Yes, our business confidence is down but there's less pressure on the Reserve Bank now to lower rates IMO. The NZD is already very low.

It'll depend a bit on inflation figures released later this month but I'm picking probably no change to the OCR next time around with probable 25bps drop after that.

Trading to it.