Where do you forecast the NZX50 to be at by Christmas 2022 ?

[Beagle]

There's an old saying on Wall Street, "As goes January, so goes the rest of the year" and I've read its about 86% accurate for the US markets. Sadly, January here and in many overseas markets certainly hasn't started well so far that's for sure !

After the worst year in a decade in 2021 surely we can't be on for another negative year in 2022 or could we ?

With the obvious challenges of central bank stimulus around the world be wound back from record stimulatory level's, rising bond yields undermining equity valuations and persistent inflation its clear there are some significant headwinds affecting the market and that's before we even consider the effects of Omricon and any other variants that might pose challenges to the economy.

We closed today at just on 12,600 and if my memory serves me correctly that's down a few hundred points already.

So, where to from here and where to by Christmas ?

This is a public poll and if I set it up correctly your user name will be recorded against your vote.

I'm away for a few days but look forward to reading people's thoughts and votes and will post more of my own thoughts and vote in due course.

Happy debating and voting :cool:

[JohnnyTheHorse]

The other Wall Street saying is "Don't fight the Fed". Increasing rates will put pressure on asset prices (which are currently at historical extremes and can only be justified on the assumption of zero rates for the next 100+ years).

It's highly possible we will be in recession within 1-2 years due to increasing rates. My concern now is that has inflation been allowed to embed itself deep enough that we cannot use the strategy of lowering rates to ease the impacts of recession. Interesting times.

ANZ out today forecasting OCR of 3% in April 2023. Got to take it with a grain of salt as we are in seriously unchartered waters, however if it gets to that asset prices across the board will be down minimum 20% in my opinion.

I have made big portfolio changes in the last 4 months to anticipate this (cut many long positions apart from a core I have full confidence in, and added select short positions).

[clearasmud]

Just voted over 15,000 based on the trend over the last 3 years.
2021 was a consolidation year.

[Muse]

Current forum consensus forecast (weighted average) forecast of 13,010.
Assumed midpoints of each range (and max of 15250 and min of 10750 for convention)

[Aaron]

Not usually aware of the index level but voted anyway.

Less than 11,000. Got down to 9,200 in March 2020 but recovered after unprecedented central bank stimulus. Average people getting hurt by inflation may not be so easy next time investors ask for a decent yield when investing.

Doom I tell you DOOOOM.

[iceman]

Not usually aware of the index level but voted anyway.

Less than 11,000. Got down to 9,200 in March 2020 but recovered after unprecedented central bank stimulus. Average people getting hurt by inflation may not be so easy next time investors ask for a decent yield when investing.

Doom I tell you DOOOOM.

Hey Aaron, I love the sense of humour coming through in your posts through the years but also do note a consistent doomsday forecast in almost every year since we both joined ST in 2010. Do you mind me asking, have you bought any shares since then or are you still waiting for the BIG correction :confused: ;)

[Aaron]

Hey Aaron, I love the sense of humour coming through in your posts through the years but also do note a consistent doomsday forecast in almost every year since we both joined ST in 2010. Do you mind me asking, have you bought any shares since then or are you still waiting for the BIG correction :confused: ;)

I am still waiting for the next leg down since 2009 and have missed the greatest bull run in history. Also waiting for the next leg down since March 2020.

I have been buying doom stocks such a gold producers , I see in the herald this morning 3 of my holdings in the top three rises yesterday(NST, NCM, EVN). But conversely they could be the top three falls tomorrow. Faith based investing is very volatile.

Have continued to own /picked up shares for yield such as Sanford, Spark, MCY, MMH(a bit speculative, caught up in Balances hype at the time but happy to hold) more recently AGL and KPG(many concerns with this, rising yields, internet retail, investing in residential at what might be the end of the boom. beagles posts, troyvdh post etc)

Over this terrible time for me, central banks have continued to stymie my doom narrative with historically low interest rates and reckless money printing, and I think they will continue with more of the same but possibly not as good a result. My anger at central banks may show through in my posts on occasion.

Still poor but can only blame myself really. Conservative investor looking for yield, need to be less scared of debt knowing the central bankers have my back.

You never know I might be right one year out of 12, but the problem is I will be paralysed with fear if it does happen so will miss my once in a lifetime chance once again.

[iceman]

Great response :t_up:

[clearasmud]

I am still waiting for the next leg down since 2009 and have missed the greatest bull run in history. Also waiting for the next leg down since March 2020.

I have been buying doom stocks such a gold producers , I see in the herald this morning 3 of my holdings in the top three rises yesterday(NST, NCM, EVN). But conversely they could be the top three falls tomorrow. Faith based investing is very volatile.

Have continued to own /picked up shares for yield such as Sanford, Spark, MCY, MMH(a bit speculative, caught up in Balances hype at the time but happy to hold) more recently AGL and KPG(many concerns with this, rising yields, internet retail, investing in residential at what might be the end of the boom. beagles posts, troyvdh post etc)

Over this terrible time for me, central banks have continued to stymie my doom narrative with historically low interest rates and reckless money printing, and I think they will continue with more of the same but possibly not as good a result. My anger at central banks may show through in my posts on occasion.

Still poor but can only blame myself really. Conservative investor looking for yield, need to be less scared of debt knowing the central bankers have my back.

You never know I might be right one year out of 12, but the problem is I will be paralysed with fear if it does happen so will miss my once in a lifetime chance once again.
You need a framework for understanding the cycles. I use the 20.5 year property cycle. It really helped me.

[Aaron]

You need a framework for understanding the cycles. I use the 20.5 year property cycle. It really helped me.

I guess I should hold off on the doom narrative until 2025 as this might be more likely.

[clearasmud]

I guess I should hold off on the doom narrative until 2025 as this might be more likely.

That's what I've been thinking.

[Beagle]

I think its clear 2022 is going to be another tough year (as per opening post reasons). I voted 11500-12000 and am fully cognisant that the NZX50 is a gross index inclusive of all dividends so I think its going backwards inclusive of dividends for the year. Why ? Stretched valuations are rife in our market with huge numbers of stocks trading on a PE north of 30. In a rising interest rate environment the only defense that's readily apparent, (apart from going short) is value stocks with high dividend yields and growth at a reasonable price stocks, preferably also with a decent dividend yield. Cash and short term deposits also are not as silly idea's as they sound, notwithstanding inflation as they give you the opportunity to buy into weakness at a time of your choosing.

This is a real stock-pickers market and owning an index tracking fund or medium to long dated bonds looks like recipe's to lose money to me.

[Biscuit]

Don't follow the NZX50 and I'm just guessing but I've plugged for 15,000 plus. This is the year we beat covid, the economy normalizes and we are back to business. Interest rates are going to go up, but not enough to make bonds or bank deposits relatively attractive. A lot of the inflation problems are supply problems that will resolve as the world gets over covid without any need for the central banks to push us into recession. I don't really see high p/e ratios in my nzx shares but that may not be representative of NZX50. I have a fairly broad NZ portfolio and only EBO, MFT and FPH are in the 30+ category and I don't see them as particularly over-priced given their performance and on-going prospects. Keeping cash on hand is a good idea and the current volatility and fear is likely going to continue to push share prices down further over the next few weeks. But beyond that, what's going to drive the market down further? We have a swag of companies that continued to power-on despite lock-downs etc and a bunch of companies that will recover as the borders open up.

[Dassets]

Same re positions. If anyone is interested I wrote an article that I threw up on Linkedin last November. I suggest that we may be in for a multi decade high inflationary period. Why? Because we are not in a supply chain squeeze. I think I.heard California ports increased container volumes last year by 16 or 19%. I suggest we may be looking at a form of industrial revolution, Net Zero by 2050. I use a paper written in the 1940s and published in the Oxford Journal of Economics written by a recognized economist. What he wrote supported what I thought. He covered the 1700s and truly the parallels are very similar. Anyway if you want to see why I thought that, and pls I haven't just plucked it, I would be interested in your feedback.


https://www.linkedin.com/pulse/tale-ancient-transition-john-southworth

[Aaron]

Same re positions. If anyone is interested I wrote an article that I threw up on Linkedin last November. I suggest that we may be in for a multi decade high inflationary period. Why? Because we are not in a supply chain squeeze. I think I.heard California ports increased container volumes last year by 16 or 19%. I suggest we may be looking at a form of industrial revolution, Net Zero by 2050. I use a paper written in the 1940s and published in the Oxford Journal of Economics written by a recognized economist. What he wrote supported what I thought. He covered the 1700s and truly the parallels are very similar. Anyway if you want to see why I thought that, and pls I haven't just plucked it, I would be interested in your feedback.


https://www.linkedin.com/pulse/tale-ancient-transition-john-southworth

Just had a skim read before work, if I understand you, the supply chain issue might be due to a change in manufacturing, to get to net zero carbon emissions by 2050. In the industrial revolution the mechanisation of things in general would have meant people have more "things" that were made of iron or spun etc which lead to an inflation of the commodity inputs, possibly because the extraction industries weren't set up for the increased demand.
I would have thought today we are switching one for another, e.g. mining coal to mining copper or oil to lithium so inflation would only be expected in the commodities for the green revolution.

I had read the stimulus finally getting to the people in the US (a consumption lead society) lead to a massive online shopping spree that overwhelmed the supply chain at the same time covid was affecting it.

I also now realise that I possibly should not be posting on this site and leave it to more thoughtful, intelligent people.

Personally I would not have a clue but suspect massive money printing and ridiculously low interest rates and the debasement of currencies is at the heart of the over consumption and inflation. This is flowing on to disrupt the supply chain along with a pandemic and responses to it. But I have no data to back up that belief, other than looking at historical rates of interest and how quickly money and debt has been created since 2008.

The earlier money printing went into asset prices so we never heard about it, now it is hitting the CPI central banks may have to react. A couple of years of recession might see the supply chain catch up.

There is the possibility like many industries shipping has consolidated down to a few companies who are only just starting to work out their pricing power in a globalised world. They may not want the supply chains to unlock.

[winner69]

I thought this IoT was going to solve the worlds problems

[Beagle]

Don't follow the NZX50 and I'm just guessing but I've plugged for 15,000 plus. This is the year we beat covid, the economy normalizes and we are back to business. Interest rates are going to go up, but not enough to make bonds or bank deposits relatively attractive. A lot of the inflation problems are supply problems that will resolve as the world gets over covid without any need for the central banks to push us into recession. I don't really see high p/e ratios in my nzx shares but that may not be representative of NZX50. I have a fairly broad NZ portfolio and only EBO, MFT and FPH are in the 30+ category and I don't see them as particularly over-priced given their performance and on-going prospects. Keeping cash on hand is a good idea and the current volatility and fear is likely going to continue to push share prices down further over the next few weeks. But beyond that, what's going to drive the market down further? We have a swag of companies that continued to power-on despite lock-downs etc and a bunch of companies that will recover as the borders open up.

Agree with that and in answer to your question, in my opinion, overseas markets, persistent inflation, higher bond yields, lower growth rates, falling house prices, reduced spending power from consumers through inflation eroding their income, lower business and consumer confidence, supply chain issues, Omricon and other potential variants. Its going to be an "interesting" year. I started 2022 with 60% of my portfolio in cash or short term deposits, currently 65% after selling a couple of modest positions with overseas ETF's that are tanking. That speaks for itself in terms of what I think of the short term prognosis for the market. Might start nibbling away at a few things when Omricon case numbers here explode.

[thegreatestben]

Were you buying yesterday Mr B?

[Beagle]

Were you buying yesterday Mr B?

No. Keeping my powder dry at this stage.

[Dassets]

What effectively is happening is that one supply network is being supplanted by another. But the old network needs to continue supply until the new one is capable. For the new network to be established new technologies, material derivatives need to be developed. And for that to occur you need a different infrastructure to allow that to even occur. Exactly what happened in the 1700s with the wholesale move to steam. For instance we were given direction last year that we needed to build one windfarm every 9 to 12 months in NZ until 2050. And that is similar elsewhere in the world. Transport is meant to make a wholesale move away from liquid fuels ie away from supporting network developed over 120 years. And that is meant to happen in 10 years. Virtually no analysis has been done on how to do it just why it should be done. Just like Jean-Luc Picard saying "Make it so" apologies to trekkies if I got that wrong.

[Aaron]

Not usually aware of the index level but voted anyway.

Less than 11,000. Got down to 9,200 in March 2020 but recovered after unprecedented central bank stimulus. Average people getting hurt by inflation may not be so easy next time investors ask for a decent yield when investing.

Doom I tell you DOOOOM.

I thought today is a good day to revisit an old thread.

Roughly halfway to christmas but thought I would take a moment to acknowledge the 7 out of 62 soothsayers with their uncanny and prescient forecast of the future.

The NZX 50 currently below 11,000 but still a long way to christmas. The central banks pivot might see the biggest relief rally in history.

I am unsure who the two at over 15,000 are but they are looking a little out of touch with reality today.

[Beagle]

I thought today is a good day to revisit an old thread.

Roughly halfway to christmas but thought I would take a moment to acknowledge the 7 out of 62 soothsayers with their uncanny and prescient forecast of the future.

The NZX 50 currently below 11,000 but still a long way to christmas. The central banks pivot might see the biggest relief rally in history.

Everything seems in alignment for the perfect storm. The war, persistent effects of the pandemic, persistent inflation, huge central Govt debt from Covid stimulus e.t.c.. Who knows where this goes but I don't see the conditions being in any way helpful for a recovery in the second half.

[Aaron]

Shouldn't the poll be cut off as it was at the start of the year. I notice 2 additional geniuses voting at less than 11,000 but what I can't work out is there is only one additional vote.

Do people have the ability to change their vote with these polls.

Never mind I might be looking pretty silly when the central banks switch direction.

[alokdhir]

https://www.marketwatch.com/story/those-who-buy-stocks-the-day-after-the-s-p-500-enters-a-bear-market-have-made-an-average-of-22-7-in-12-months-11655224023?mod=home-page

[Aaron]

https://www.marketwatch.com/story/those-who-buy-stocks-the-day-after-the-s-p-500-enters-a-bear-market-have-made-an-average-of-22-7-in-12-months-11655224023?mod=home-page

I think I will wait until interest rates stop rising. Maybe even wait until central banks are buying ETFs to prop up the stock market a la Japan.

Who knows I was still talking about the next leg down in March 2020 when it had already shot back up, never to return (maybe never, who knows).

[Aaron]

Less than 10,000 by christmas?, only two months to go.

Last couple of days seems the tide has turned, not sure why. Some talk of the JCB propping up the yen, maybe more intervention expected soon around the world. A super rich ex-goldman banker in charge of the UK, we know Hank Paulson's view on socialising the losses.

Probably a very moral and upright guy.
https://www.theguardian.com/politics/2022/apr/06/rishi-sunaks-wife-claims-non-domicile-status

[JSwan]

Talks of a potential FED rate hike pause

[SailorRob]

You are able to time the market Beagle?

[ynot]

Everything seems in alignment for the perfect storm. The war, persistent effects of the pandemic, persistent inflation, huge central Govt debt from Covid stimulus e.t.c.. Who knows where this goes but I don't see the conditions being in any way helpful for a recovery in the second half.

I think a considerable drop next year in new house construction will be the catalyst for a major economic decline in NZ. We can only hope is is short in duration.

[Aaron]

You are able to time the market Beagle?

Sadly I think Beagle has been permanently banned from sharetrader. Not sure why.

I would not take this thread too seriously.

Have a look at the survey results no one can time the market. Although back when this thread started less than 11,000 was not as popular as it has become now.

Is there any way to check if fund managers are holding more cash than usual. If so then they are probably trying to time the market, or at least not buying at what might be a current peak.

[Jay]

Not banned Aaron, just choosing not to frequent here anymore
Still alive in the member list

[Aaron]

Couple more days to go, back above 11,000, I am starting to feel a little silly with my negative predictions.

Looking at Bulls predictions for 2023 more of the same gloom next year if he is correct. Was there a 2022 prediction thread other than this survey. It would be fun to revisit and make fun of the optimists as pessimists only get a couple of short years to be right. Whereas optimists go up the elevator.

I just wonder, someone had the theory that part of the inflationary 70s was not just a fuel crisis but boomers reaching peak earning and spending. If they are now reaching retirement would that not mean a deflationary decade. The current inflation rate would appear to disprove that theory, but it also might be proving Milton Friedmans theory that inflation is always and everywhere a monetary phenomenon.

What about if current market losses mean return of capital rather than return on capital might become a priority for those nearing or in retirement. They hold a majority of the wealth so if they jump together that would be bad for asset values.

Pointless speculation I know, as we won't know the answer for another 10 years.