When to re-enter the market?

[tobo]

I noticed many stocks on my watchlist have a similar chart -
Down-trending channel, clear slow-stoch buy signals and MACD negative but approaching zero.

I guess the Down-trending channel is what I should be paying attention to.

ToBo

[skinny]

The NZX will follow whatever happens abroad, but an encouraging contrarian signal nevertheless.

Below I've compiled a table of large declines in the S&P 500 since 1900 using data from Robert Shiller's (he of irrational exhuberance fame) website:

http://www.econ.yale.edu/~shiller/data.htm

It shows that the current sell off is now pretty much in line with the sell off over 1973-1974, which corresponds with the 1st oil shock. For those with a historical bent, the closest parrallel to what we are going through is the 1906-1907 banking crises where essentially, like today, banks stopped lending to each other and credit froze. The circuit breaker to this crisis was John Pierpont Morgan pledging his personal fortune to re-capitalise the banking system! I find it deeply ironic that two investment banks with his namesake (JP Morgan and Morgan Stanley) have been re-capitalised today courtesy of the US taxpayer.

The sell off we have seen so has only been going on for 15 months. The table below shows that it can go on much longer and typically markets do not recover until economic conditions start improving. A pessimist could say this implies we have much further to go. Certainly we are still a long way from the sell off seen in the Great Depression! An optimist might think the current 'shock' is nowhere near as bad as the 1st oil shock and that the market was sold down very quickly on fears of a Great Depression type of scenario which now does not look very likely (if it ever was) given the policy actions to support credit markets.

I'm more in the optimists tent, but am buying is slowly on the basis that even better value could well emerge. I also stand ready to leverage the fcuk out of the main indexes when we eventually do get some light appearing at the end of the tunnel.


Peak........ Trough.......Months... S&P 500 Index decline
1906.09.... 1907.11.... 14.......... -37.7
1916.11.... 1917.12.... 13.......... -33.4
1929.09.... 1932.06.... 33.......... -84.8
1937.02.... 1938.05.... 15.......... -45.4
1968.12.... 1970.07.... 19.......... -28.9
1973.01.... 1974.12.... 23.......... -43.4

1987.08.... 1987.12.... 04.......... -26.8
2000.08.... 2003.02.... 30.......... -29.0

2007.07.... to date.... 15.......... -42.4

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10539519

Capitulation?

maybe capitulation was the 1st 2 weeks of October when , say, the ASX200 fell by 4% one week and then a massive 16% the next week. That followed a slow grinding down process from 7000 to 6000 to 5000. Since those recent 2 really bad weeks that index is only down a further 2.8%. Sometimes better to eliminate a lot of the hourly/daily noise and look at the weekly movements instead

So a good case to say that we could be at or near the bottom

However caution needed and one needs to be prepared to bail out again if things continue to turn to custard. Headlines like Kuwait scrambles to prop up second biggest bank
don't always build confidence does it ..... jeez even the rich arabs need bailing out but then even derivate trading can hurt all those on the wrong side of big bets.

Interesting times

[shane_m]

where is Phaedrus with the charts? is it time to enter or not which indicators are negative or positive. Can we have a updated chart.

[dumbass]

skinny , your a little optimistic with your time frame even though it feels like 15 months it is only 12 months from the SP 500 peak.

[trendy]

When to reenter the market. When the margin calls stop.

http://www.youtube.com/watch?v=eVB-SSkkLnY

[Hoop]

Hoop's put his money where his mouth is

Had average 90% cash for most of this year up until a couple of weeks ago.
Rebuilding my longer term portfolio buying selected high quality stocks on the big down days.

Now have 30% cash.

[Stranger_Danger]

I'm following the same strategy Hoop. Still 55-60% cash, being at 80% June last year. Slowly slowly, but buying every week, trying to bottom fish on the worst days. I'm sure i'll burn in Phaedrus hell for such an approach, but I guess time will tell.

[brettdale]

Hoop's put his money where his mouth is

Had average 90% cash for most of this year up until a couple of weeks ago.
Rebuilding my longer term portfolio buying selected high quality stocks on the big down days.

Now have 30% cash.


At 75% Cash.

Havent sold, but just a but nervous on topping up.

[AMR]

95% cash still...I think the broad market will spend 6 months to a year going sideways and building a base. But I'm sure there will be some individual companies that will absolutely take off. The trick is what sector?

Have delegats (DLG?) and FPH on my watchlist. FPH has outperformed the market by a fair bit through this "crash".

[CAM]

I'm sure there will be some individual companies that will absolutely take off. The trick is what sector?



Debt collectors???

[lakedaemonian]

Debt collectors???

I'd be thinking repossession agents :)

Also, BUYING receivables for pennies on the dollar might be quite lucrative in the next few years....as uncollectible debts accrue and cashflow shrivels up.

[Footsie]

can anyone provide me with a chart of the NZX from 1985-1992?

IF not, when did the NZX bottom (post 87) and what was the % decline.

thanks

LIZ - this is something you'd normally be able to source !

[Footsie]

Hoop's put his money where his mouth is

Had average 90% cash for most of this year up until a couple of weeks ago.
Rebuilding my longer term portfolio buying selected high quality stocks on the big down days.

Now have 30% cash.

Hoop, what are you buying?

[dumbass]

hi hoop , would be interested to know why you would choose to buy now.

[Lizard]

can anyone provide me with a chart of the NZX from 1985-1992?

IF not, when did the NZX bottom (post 87) and what was the % decline.

thanks

LIZ - this is something you'd normally be able to source !

This has got to be worth a bottle of best red, Footsie, after all the mucking around... every time I go to use our scanner, the software has been superseded, so apologies for the $ signs incorporated by the freebie download of VueScan. And then, I couldn't get the size right...sorry!
http://www.sharetrader.co.nz/picture.php?albumid=2&pictureid=64

[Snow Leopard]

Does anybody now where I can get a really high resolution monitor from?
I would like to look at Liz's chart without needing to scroll.
2560 * 1920 should be adequate :p

regards
Paper Tiger

[Lizard]

Sorry P.T. - technical difficulties and I choose to blame Tech Support for continually upgrading the gear around here, so that nothing ever works the same as it did on my previous use!

[Snow Leopard]

Can I change my last order to a magnifying glass please?

[Lizard]

That does it P.T.! Enough whinging... the file is coming to you by e-mail and you can figure out what to do with it :p!

Here's another scan while I'm on a roll - of NZ Stocks from Dec 1990 to bring back a few memories...

http://img.villagephotos.com/p/2006-8/1204598/Scan-081028-0005.jpg

[winner69]

PE ratios were pretty low back then Lizard - is that we are heading

(take it the NE prob loss making companies)

Brings back memories

[Snow Leopard]

Hi all

Mildly surprised that some of you have been spending your hard earned cents on the stock market and I hope it works out from you, but...

It is a dangerous place out there at the moment. Fear and panic seem to rule the day. When the populous stop worrying about one thing they turn their attention to the next.

Technically the only share showing real promise at the moment is Fisher & Paykel Healthcare.

I regard the stock-market as a very definite spectator sport at the moment.

regards
Paper Tiger

[Lizard]

PE ratios were pretty low back then Lizard - is that we are heading

(take it the NE prob loss making companies)

Brings back memories

Hey, which one do you guess might have been the best buy back then? Baycorp at 6cps? Michael Hill not bad considering I think it went 10:1 between then and now?

Would be an interesting exercise to count up how many of those companies actually went bust between then and now...

[Lizard]

Technically the only share showing real promise at the moment is Fisher & Paykel Healthcare.


PGC (if it closes at current $3.65) maybe okay if chart was corrected for recent dividend?

Have a few on the ASX still in medium-term uptrends. But they seem to be getting fewer!

One thing I remember from going over the old share prices through to Dec 1990 was how in that last month of push down, almost nothing you could have bought previously was in profit! Was a bit of a shock lesson at the time and gave me nightmares for a few weeks - till I figured that a balanced portfolio would have been making good money on overseas shares.... oh dear, that thought hasn't been helpful at all this time around!

[Footsie]

Thanks Liz

I knew I could count on you!!!

to be honest not surprised that the market rallied around 50% from its 1988 low through to 1990., before ultimately going lower.

could we be headed down a similar path.?

[lakedaemonian]

Thanks Liz

I knew I could count on you!!!

to be honest not surprised that the market rallied around 50% from its 1988 low through to 1990., before ultimately going lower.

could we be headed down a similar path.?

I don't think we've seen the bottom yet for equities.

I think the remaining skeletons in the closet will drive sentiment on equities even lower over the next year.

[skinny]

I was looking at some Citi research today that suggests we may get a MASSIVE bounce in US markets over the next few days. The reason is that with the sell off in equities and rally in Govies over the month of October balanced funds are massively off their target allocation weights - they need to sell bonds to buy equities and usually they do this on an end of month basis. This is not market chatter or speculation, its a given. I'm also hearing that the hedge fund de-leveraging process is almost over (this is chatter!) Anyways, I stand ready to claim bagging rights if this comes off & I'm sure y'all forget about it if it doesn't...

[Lizard]

Thanks Liz

I knew I could count on you!!!

to be honest not surprised that the market rallied around 50% from its 1988 low through to 1990., before ultimately going lower.

could we be headed down a similar path.?

Footsie, below is a chart of the Dow over a similar period to that NZSX chart. You can see that both charts had falls in both 1987 and in 1990. However, the charts are clearly quite different as to as to where the highest high and lowest low occurred. Reasons the NZ pattern was far worse for investors might have included the preceding level of stockmarket "bubble behaviour" or perhaps a government that took a very tight stance to fiscal and monetary policy over the same period? (Need comments from those who remember....I wasn't taking enough notice of financial subjects at the time, being too busy falling in love, travelling and other more important things.)

At the time, the first step down seemed to be a reaction to the "bubble" and centred around financials, while the second step down was a reaction to the real falls in earnings, reduced employment etc that followed the financial turmoil. There is something of a feedback loop in this, so the second step down depends on the extent of damage in the first fall. This time around, is driven more by unwinding a residential property bubble rather than a stockmarket bubble. Quite likely to get a second step, but I would think the better companies that are less affected will rise to new highs in the meantime?

Note that the NZ Herald Index looked to have risen about 6-fold from 1983-1986, the Dow about 3-fold (inflation and interest rates were high).

NZ as a country may be better placed to contain the damage to business and reduce the flow-on this time around. However there is also the unknown amount of potential damage from wider global weakness.

http://www.sharetrader.co.nz/picture.php?albumid=2&pictureid=65

[winner69]

Reasons the NZ pattern was far worse for investors might have included the preceding level of stockmarket "bubble behaviour" or perhaps a government that took a very tight stance to fiscal and monetary policy over the same period? (Need comments from those who remember............... while the second step down was a reaction to the real falls in earnings, reduced employment etc that followed the financial turmoil. There is something of a feedback loop in this, so the second step down depends on the extent of damage in the first fall.


One reason could be that there was drought induced recession in 1990/91 or thereabouts that probably affected earnings that affected shareprices ... just a thought

Maybe check back on your RBNZ recession paper you gave shrewdie to confirm

[skinny]

Well my call that we will see a large bounce is right so far. Belg - its instos who are too long on bonds and need to sell to buy stocks to re-balance their portfolios to target weights.

At any rate, the *good* news over night was the huge issuance of CP under the Fed funding facility. Those with an inkling of how credit markets work will know just how important getting this market going again is......

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Fed Spurs Record Surge in Longer-Term Commercial Paper Issuance

By Bryan Keogh

Oct. 28 (Bloomberg) -- Sales of longer-term commercial paper soared 10-fold after the Federal Reserve began buying the corporate IOUs, a sign that the central bank's efforts to unlock the market may be working.

Companies yesterday sold more than 1,500 issues totaling a record $67.1 billion of the debt due in more than 80 days, compared with a daily average of 340 issues valued at $6.7 billion last week, according to data published by the Fed. Most of the difference was probably absorbed by the Fed, said Adolfo Laurenti, a senior economist at Mesirow Financial Inc.

``That's the very first really good news in quite some time,'' said Laurenti, who is based in Chicago. ``It's probably something the government can do and the normal investor would not otherwise do.''

The Fed began buying commercial paper from companies yesterday to reduce rates, lure back investors and unlock the market, which seized up last month following the bankruptcy of Lehman Brothers Holdings Inc. General Electric Co., which sold debt to the Fed yesterday, Korea Development Bank and Morgan Stanley are among several dozen companies that have signed up for the program, which was announced on Oct. 7.

Andrew Williams, a Fed spokesman in New York, declined to comment. The Fed is scheduled to report data for its new funding program on Oct. 30.

Fed's Rate

The Fed today set the rate it's willing to accept for 90-day unsecured commercial paper at 2.89 percent, including a 1 percentage point credit surcharge, up 0.01 percentage point. The 90-day secured asset-backed rate is 3.89 percent, according to Fed data compiled by Bloomberg. The rates are set under the Fed's Commercial Paper Funding Facility and are available on CPFF.

Many companies use commercial paper, which typically matures in 270 days or less, to finance their daily operations. Lehman's bankruptcy filing on Sept. 15 caused the market to lock up, preventing many borrowers, particularly financial companies, from selling anything but overnight paper.

The program, along with a facility to support commercial paper backed by assets such as auto loans and credit cards, appears to be ``helping to stabilize'' financial companies' access to the market, said Anthony Ryan, the Treasury's acting undersecretary for domestic finance.

Quoted rates on 90-day commercial paper fell 15 basis points to 3.19 percent, according to yields offered by companies and compiled by Bloomberg. Rates on the highest-ranked commercial paper due in 30 days rose 6 basis points today to 2.94 percent, the highest in a week.

The average yield financial companies paid yesterday to issue 90-day commercial paper plunged 70 basis points to 2.55 percent, or 1.05 percentage points more than the target lending rate, according to the Fed, signaling the program may be working.

Historically the rates are about the same. Financial company yields reached a nine-month high of 3.99 percent on Oct. 6. By contrast, non-financial issuers paid 1.95 percent yesterday.

Companies on Oct. 10, 2003, sold $32.9 billion of commercial paper due in more than 80 days, the previous record, according to Fed data.

[Lizard]

One reason could be that there was drought induced recession in 1990/91 or thereabouts that probably affected earnings that affected shareprices ... just a thought

Maybe check back on your RBNZ recession paper you gave shrewdie to confirm
RBNZ Bulletin (http://www.rbnz.govt.nz/research/bulletin/2007_2011/2008jun71_2reddellsleeman.pdf)

The drought induced recession was the 1998 one. Even the RBNZ managed to blame fiscal and monetary policy for 1990 - exacerbated by central banks in other countries moving from a post-crash loosening back to tightening bias and a six month surge in crude (gulf war I). There are some good passages in that bulletin...

On the lead-up...

Deregulation gave financial institutions the freedom to create credit, without much experience in actually doing so. A significant portion of the new credit, fuelled by the inflows of foreign funds attracted by New Zealand’s relatively high interest rates, was used to finance speculation in the share market and the property market. Numerous entrepreneurial companies joined the stock market, and from some of the rhetoric one might have supposed that New Zealand in fact had a comparative advantage in takeovers. Talk of New Zealand becoming the Switzerland of the South Pacific went hand in hand with fevered speculation around the first unsuccessful tilt at the America’s Cup.


On the crash...

On 19 October 1987 (‘Black Monday’), global share prices collapsed. In three-and-a-half months, the value of the New Zealand share market halved. The share market crash in New Zealand was part of a de-leveraging process that wiped out huge amounts of wealth, brought down several major corporations and some financial institutions, and severely impaired the health of the entire Australasian banking system. It did not, of course, do this overnight. It took years for the full effects to become apparent. Indeed, for a time many were quite blasé about the likely impact.

On the aftermath...

By late 1990, the accumulated effects of five years of anti- inflationary policies, with real short-term interest rates still around 8 to 10 percent, the exchange rate still relatively high, and three years of increasingly constrained access to credit, meant that the economy was relatively weak and quite exposed to any further negative shocks.


And the resolution...

In the end, markedly lower real interest rates, a significant reduction in the exchange rate, a waning of the first intense contractionary pressures from fiscal policy, and a gradual recovery in the world economy laid the ground for economic growth to recover in 1992.

[fungus pudding]

hey-zeus! DOW and SP500 in US up over 10.75% and the Naz just 9.5% ...sheez!

NZSE ... 5% ...? ... I might just sell something tomorrow ... ;)



I might buy something tomorrow.

[Stranger_Danger]

I'm glad I was buying yesterday and sure as hell won't be buying today.

Such wild rallies / falls do not inspire confidence of a sustainable bottom.

[duncan macgregor]

This is what happens in a falling market we get great dead cat bounces fueled by people trying to pick the bottom. The market is run by demand, and supply, fight that at your peril.
I dont see one sector in the market trending up, which convinces me this is not a time to buy. Retail is down,Oil and minerals are down,unemployment is up,infact everything at the moment is heading south. When the demand in one sector starts to trend up thats when to look for a company best suited to take advantage of the uptrend.
The novice will bottom pick all the way down bleating on about PE ratios or some other fundamental stupidity that has very little bearing on a share price. The sp of most companies follow very closely to the supply and demand in the sector that they are in.
There is no requirement to stay invested for the sake of it,why fight the losing battle, when its more profitable to stand aside.
The crash was easy to predict the market will take some considerable time to get over it.
When i got out the market in JAN i thought it would be at least two years before i got back that was my opinion then and still is. macdunk

[fungus pudding]

This is what happens in a falling market we get great dead cat bounces fueled by people trying to pick the bottom. The market is run by demand, and supply, fight that at your peril.
I dont see one sector in the market trending up, which convinces me this is not a time to buy. Retail is down,Oil and minerals are down,unemployment is up,infact everything at the moment is heading south. When the demand in one sector starts to trend up thats when to look for a company best suited to take advantage of the uptrend.
The novice will bottom pick all the way down bleating on about PE ratios or some other fundamental stupidity that has very little bearing on a share price. The sp of most companies follow very closely to the supply and demand in the sector that they are in.
There is no requirement to stay invested for the sake of it,why fight the losing battle, when its more profitable to stand aside.
The crash was easy to predict the market will take some considerable time to get over it.
When i got out the market in JAN i thought it would be at least two years before i got back that was my opinion then and still is. macdunk


Why is it more profitable to stand aside? Some dividends are huge at present, and even if not at the bottom, its also nowhere near the top. Damned if I can see a better place to put money at present. Ten years time - we'll all be laughing. Could even be sooner!

[duncan macgregor]

FUNGUS, its a very simple answer. I got out the market in Jan simply because the commodoty charts were showing sell signals. At this moment in time i would have lost about fifty pc of my capital if i had stayed in. when the commodoty charts start to trend up i will buy so much more plus having the bank interest to add to that number.
To look at yeilds is not the way to go. protect your capital at all costs, get out the market in bad times, then come back boots and all in the uptrends. Dont worry about companies they only follow the rise and fall of the sector.
Some people fall in love with companies and hold during great downtrends which to me shows a complete misunderstanding of what investing is all about.
Macdunk

[fungus pudding]

FUNGUS, its a very simple answer. I got out the market in Jan simply because the commodoty charts were showing sell signals. At this moment in time i would have lost about fifty pc of my capital if i had stayed in. when the commodoty charts start to trend up i will buy so much more plus having the bank interest to add to that number.
To look at yeilds is not the way to go. protect your capital at all costs, get out the market in bad times, then come back boots and all in the uptrends. Dont worry about companies they only follow the rise and fall of the sector.
Some people fall in love with companies and hold during great downtrends which to me shows a complete misunderstanding of what investing is all about.
Macdunk


Undoubtedly it makes sense to get out and back in if you see the big drop coming; but at the moment a big drop is less likely than the second coming.

[lakedaemonian]

Why is it more profitable to stand aside?

Someone who stayed in cash or cash-like for the past year compared to someone who was fully invested in equities would be light years ahead.

But I think it would be a bit misleading to call it "more profitable" as when inflation is factored in sitting in cash isn't exactly very "profitable".....the good news is the recent disinflationary environment has made cash profitable from a purchasing power perspective. How much longer the disinflation(and outright deflation in things like residential property) will last remains unclear.

Personally, when I made the decision to liquidate all of my equities(bar NZR) I fully expected to have my capital chipped away by inflation, but I thought it was the lessor of two evils to have some capital be attrited by inflation as opposed to my equities deflated.....so in effect I've been in a capital preservation mode for over 12 months....with no plans on changing any time soon as I believe the environment is still far to nebulous to dive in again yet.

Some dividends are huge at present, and even if not at the bottom, its also nowhere near the top. Damned if I can see a better place to put money at present. Ten years time - we'll all be laughing. Could even be sooner!

What happens when unemployment rises, access to capital continues to be difficult, and corporate earnings spiral downwards?

Are these huge dividends sustainable?

If companies need to preserve more difficult to acquire cash, one easy way to do so is to cut dividends.

Will companies be willing to take the additional hit to their share price by cutting dividends?

I'm not willing to find out just yet.

BUT, I do agree that eventually share dividends and bond yields will become increasingly attractive.......but I don't agree that the time has arrived to pull the trigger.

But hey, I'm a capital preservation kind of guy at the moment.

[Hoop]

hi hoop , would be interested to know why you would choose to buy now.

Hi Dumbass my personal belief that a bottom is not far away, I am not factoring in a depression, now that money has been pumped into the global economy...use the approach that no-one can't pick the bottom and will lose out on the quick unexpected v shape rebound*** where most % of the recovery is located, I have taken the slight risk of entering early. (yes slight, not a misprint).

Dumbass.. knowing you.. You would want to know why, with facts, not the above waffle so I am slowly going through all my data and highlighting it so it can be posted here or somewhwere. At the moment it is a size of a book. Hope to trim it down to a postable size within a couple of days.
I believe in using as many instruments and market corelations as possible as I don't rely on one, two or 3 methods only.
Did an interesting bit of analysis this morning and posted it on NZX50 thread (http://www.sharetrader.co.nz/showthread.php?t=5149&page=15)..at best it is "curosity/ maybe of slight importance" level of information, but it is another signal of sorts I guess.

*** Hoops view ..today rebound (stemed from big bounce back in Asia) on Wall St is due to lack of sellers ...maybe a tactical "wait and see" day from mutual and hedge fund managers + others......this rebound doesn't feel convincing, does it?..............yet no doubt the ultimate bottom breaker rebound and resulting trend break and bear cycle break will occur from one of these just types of happenings....

...all we have to do is to figure out which one:D....too hard for me to pick.

[Stranger_Danger]

Hmmm on the ASX, I get the distinct smell of a lack of buyers, not just a lack of sellers. Pretty wimpy attempt at a rally really.

[Hoop]

Hoop, what are you buying?

No offense Footsie..but I take the view as not to disclose in times like these.

From my various posts you may get some idea of what I have though.

My stock choices will not suit many investors on Sharetrader as they are mostly bought with a long term strategy in mind. hence my decision not to disclose......TA trends are less important and FA more important in long and very long term investment strategies.

Most people are focusing on the "now" and absorbing all the latest market noise.
Hoop is not following this herd anymore...Hoop often leaves a herd to the the bewilderment of most people..always done this in the past and it has always worked..so far that is:)

Still going to be playing with toys though... I have a short/medium portfolio plaything with nothing in it yet:).

So far I have resumed my long term investment strategy with buying back most of my original stocks I held in my previous long term portfolio for half the price or less in some instances. Beats the hell over the alternative recognised long/very long term buy and hold strategies:D

Footsie hope this helps.

[Bobcat.]

Check out the following:
1. the Dow last week broke through last month's solid resistance of 9300 (after a higher low, now a higher high);
2. previous years of downside activity during October (due to triple-witching) are often followed by bullish runs up to Christmas;
3. US banks are now starting to charge each other lower interest on interbank loans (this rose from 2.6% earlier this year to over 7% early Oct, and is now trending back down).

These three indicators are persuading me to go long on several NZX stocks - PPL, NZO, AIR, HBY, PRC, FPA, FBU, IFT and yes even TEL.


Invest locally and you invest in your children's future.

[AMR]

I'm no TA expert but charts for Dow, SP500, FTSE seems to be forming towards hitting a double bottom in the next day or so ... Anyone whose more expert then me (just about everyone I'd guess) see the same thing?

We'll see ... In meantime, I'm spending my weekly allowance ;)

Very possibly. You won't know it's a double bottom until after it's hit the bottom.

[STRAT]

I'm no TA expert but charts for Dow, SP500, FTSE seems to be forming towards hitting a double bottom in the next day or so ... Anyone whose more expert then me (just about everyone I'd guess) see the same thing?

We'll see ... In meantime, I'm spending my weekly allowance ;)Cant see it myself Belgarion but if you can why are you spending today?

Disc Im probably no better at TA than you are

[bull....]

Looking for another big fall soon through previous lows.

[Crypto Crude]

bull****-Looking for another big fall soon through previous lows.


bull **** they are... hehehe...
Narhgh... I think you could be right with that call...
If the DOW does fall below its low of 7900 points, it wont fall much further... Im expecting like a double bottom or a slight overshoot...
Markets are priced at depression, and we are only in a recession...
This will mean that we will come out of this quicker than most expect...
catch you all around... we survive we perform...
:cool:
.^sc

[duncan macgregor]

Keep guessing guys but that is not how to make money. You can only safely make money when you stop guessing and start thinking. Anything can happen at the moment no surprizes either way, which ever way it turns out. America is in deep financial strife heading into the gutter. If America was a private individual or a company it would be declared bankrupt. It however is taking the global economy down with it, making this a worse situation than the great depression.
The safest place for an individuals money is holding material assets that will hold their value until this crisis rights its self. The whole money system is in danger of collapse, unless America can sort itself out. Picking bottoms will see you covered in crap more often than not. SHREWDY has the inexperiance and enthusiasm of youth who sees the market only falling to this or that level, where the reality is it might fall much further.
The American car industry is in a state of collapse, with at least two major companies about to go under.
Will the GOVT support them, or can it borrow enough to keep them operating. When something runs at a loss, you can keep it going by pouring good money after bad for only so long before reality strikes.
The reality of the situation is look to get rid of your money which might end up worth very little by buying material assets that hold their value, in the good or bad times. Macdunk
DISCL only hold a few CUE for fun

[srowe]

Thats the big question...what to do with the money if you have it.Thought about land,but o that market is not looking to healthy ATM either

[fungus pudding]

Thats the big question...what to do with the money if you have it.Thought about land,but o that market is not looking to healthy ATM either


The golden rule with land (which is the nuiscance component of real estate) is to make sure it is planted firmly underneath an income producing building.

[BRICKS]

Thats the big question...what to do with the money if you have it.Thought about land,but o that market is not looking to healthy ATM either

GO out and BUY the above with good wine by the case store in cool place and sit back and
wait for trouble this is liquid money people will trade when they are desperate and if the worse really comes sit back and DRINK this also fix`s all trouble..

[Crypto Crude]

You are right mackdunk...
I am deeply inexperienced when it comes to market risks...
Ive never been through anything like this...
My enthusiasm has alot less to do with passion and well wishes, and more to do with thought provoking ideas... The major market meltdown does not make sense---> we are in a recession but yet the market has priced our assets at a great depression...
This is what has lead me to take this stance...
DOW at 5,000.... 6,000.... I cant see it mate...
we are not going to get flung back into the stone age...
:cool:
.^sc

[duncan macgregor]

SHREWDY, You might be young and enthusiastic but you are a fast learner with an open mind that will see you right. When you get generations of people that see money as a plastic card that produces money from a hole in the wall you know its going to hit the fan sooner or later. The American debt way of life that we copy must fail. The financial education in schools or in most homes is almost nil. Money is a promise to pay stampted on to a bit of paper that can be worth very little or nothing at all if the system goes wrong.
If you have money, or money value in the bad times, swap it for something material that at worst might stand still. In Zimbabe when i was there the price of a large farm is now worth less than a big mac. That means if i had sold the farm, stuck the money in the bank i could almost afford a big mac at todays prices.
That can happen here so the smart answer is dont sell the farm. You are lucky SHREWDY the crisis will be over one day, and you will have had plenty of experience in the bad times in your young life to make a killing later on. Macdunk

[Mick100]

good advice macdunk

Shrewd - have you finished studying now
What sort of work are you going to do?

[Crypto Crude]

thanks mackdunk,
these bad times aint even been that bad...
im already making a killing, just not in this period...
look at it from this view... I just look at it like it was just a bad stock pick... If im making 5 good stock picks for every one bad pick then im happy...I know I cant have my portfolio growing every quarter indefinately...
my portfolio looks alot like that amex oil index that skol posted somewhere...
im happy... all I lose is one year...
I dont lose money, I lose time...
CTP is the biggest fuf up Ive made so far in oil...
I only go rampant on stocks (at that time) that I really believe in...
CUE is the only rampant stock Ive failed with... and failed with in a big kina way cos im 60% all in...
it was good I consolidated my holdings because I would have lost more elsewhere...
After this snap shot in time is over... then its back to easy money when we hit a bull market rally...ie throw a dart and the stock will boom...

The US economy wont go bankrupt, even if it technically could be... they would just have to cut govt spending and increase taxes...
its been done before... it will be done again...
I believe Obama will lead them well...

Theres one or two posters out there that are lying to themselves and us by telling us they got out, during the crash.. when infact they did not...
im hanging in here md...
I still want to get a few houses in 2010/2011...I will have to see share performance between now and then if I have a chance of getting a few... or will have to save around 15k in a year to get the first house with a 20% required deposit...
yeahh hhharrrgghhhh....
:cool:
.^sc

[bermuda]

thanks mackdunk,
these bad times aint even been that bad...
im already making a killing, just not in this period...
look at it from this view... I just look at it like it was just a bad stock pick... If im making 5 good stock picks for every one bad pick then im happy...I know I cant have my portfolio growing every quarter indefinately...
my portfolio looks alot like that amex oil index that skol posted somewhere...
im happy... all I lose is one year...
I dont lose money, I lose time...
CTP is the biggest fuf up Ive made so far in oil...
I only go rampant on stocks (at that time) that I really believe in...
CUE is the only rampant stock Ive failed with... and failed with in a big kina way cos im 60% all in...
it was good I consolidated my holdings because I would have lost more elsewhere...
After this snap shot in time is over... then its back to easy money when we hit a bull market rally...ie throw a dart and the stock will boom...

The US economy wont go bankrupt, even if it technically could be... they would just have to cut govt spending and increase taxes...
its been done before... it will be done again...
I believe Obama will lead them well...

Theres one or two posters out there that are lying to themselves and us by telling us they got out, during the crash.. when infact they did not...
im hanging in here md...
I still want to get a few houses in 2010/2011...I will have to see share performance between now and then if I have a chance of getting a few... or will have to save around 15k in a year to get the first house with a 20% required deposit...
yeahh hhharrrgghhhh....
:cool:
.^sc

Hi Shrewdy,
I am still holding oil/CSG because the fundamentals are getting better all the time. The international LNG market is set to expand/double quite quickly.
But the BEAR has upset the market ( or rather the exuberance of Bush and Greenspan ) and America ( despite a great new leader ) is up to its eyes in it.

Their only way out is to increase infrastructure work and push the Superannuation age out to 75. People are living another 20 years so the Super age will be extended. It has to be extended in America...because they cant afford not to.

here is worse to come I fear so I will batten down the hatches and keep my remaining powder dry. Let's see what the IEA report will do to the oil market this week. Probably the market will give it a big yawn of disbelief.

Get some VPE/ VPEO. The majors are very much in investment mode and have to secure stable future LNG supplies.

[Crypto Crude]

mick-Shrewd - have you finished studying now
What sort of work are you going to do?

Ive had a change of heart... Im looking to get into Bullfighting school...
I want to become a Torero...:D...

http://www.cartoonstock.com/lowres/amc0719l.jpg

http://4.bp.blogspot.com/_O1Nhk3lVTu4/SJ3oEsyi7KI/AAAAAAAAA1A/PSO9nx7Q9xU/s400/Untitled-1.jpg

hehehehe...


bermuda-here is worse to come I fear so I will batten down the hatches and keep my remaining powder dry

yup...
a double bottom.. or a slight over shoot to 7000-7500 on the DOW...
will not go below that... the crash is over...
my sentiment and thoughts only...
cheers...
:cool:
.^sc

[BRICKS]

GO out and BUY the above with good wine by the case store in cool place and sit back and
wait for trouble this is liquid money people will trade when they are desperate and if the worse really comes sit back and DRINK this also fix`s all trouble..

THROW in a case of GIN always does the TRICK..

[Sideshow Bob]

Bricks, you should know you shouldn't mix your drinks!

[BRICKS]

Bricks, you should know you shouldn't mix your drinks!

WE are not drinking them they are for BARTER at you rate you would drink all the PROFITS...

[digger]

There is a short story under the business news in NZ Hearld about farm being morgaged sold for 2.4 million .Was recently valued before the finanical crash at 7 million. Looks like a lot of realineing of values coming up.Too early to pick the bottom. The last time we had farm morgage sales was back in the late 80's and about 20 farmers did themselves in.We do not seem to have learned much since then as values after the 80's went up very sharply.I sold out of farming 5 years ago as getting too old to do all the work and reastate too expensive to hold on to. Looks like the second big sell off is about to hit the market,especially if dairy prices fall too much.
Digger

[BRICKS]

There is a short story under the business news in NZ Hearld about farm being morgaged sold for 2.4 million .Was recently valued before the finanical crash at 7 million. Looks like a lot of realineing of values coming up.Too early to pick the bottom. The last time we had farm morgage sales was back in the late 80's and about 20 farmers did themselves in.We do not seem to have learned much since then as values after the 80's went up very sharply.I sold out of farming 5 years ago as getting too old to do all the work and reastate too expensive to hold on to. Looks like the second big sell off is about to hit the market,especially if dairy prices fall too much.
Digger

THE above story dose not tell all the truth,, the bit about the farm being sold is true,
But why this fellow besides the farm[which he was not working] had been trading in houses as well and it appears he did not have the brains to get his cash flow right and it all fell apart , Good bye farm and a DUD story..

[AMR]

THE above story dose not tell all the truth,, the bit about the farm being sold is true,
But why this fellow besides the farm[which he was not working] had been trading in houses as well and it appears he did not have the brains to get his cash flow right and it all fell apart , Good bye farm and a DUD story..

Yes he mentioned monthly interest payments of 30k and a yearly lease on the farm of 25k.

Wonder where the rest of the cash was coming from.

[Crypto Crude]

hey reincarnate digger,
History repeats itself over and over eah...?
We make the same mistakes just at different times in history...
The Asian Financial Crisis was quite similar to the current one...
(it was a banking crisis which came to light because of a fixed exchange rate crisis)
After the AFC there was all this talk about changing the banking system to never allow such a thing to occur again...
As a society we make the same mistakes...
as individuals we dont have to follow society...
as an Indiviual I wont make the same mistake again re the markets...
the writing was all on the wall just like in 87 (as I hear)...
and I just choose to ignore it because I found a stock so special that it blocked out all else...
im glad we had it than not have the crash...
Now we can move forward and slowly prepare ourselves for the real peak oil that speculators will not possibly be able to be blamed for...
:cool:
.^sc

[BRICKS]

hey reincarnate digger,
History repeats itself over and over eah...?
We make the same mistakes just at different times in history...
The Asian Financial Crisis was quite similar to the current one...
(it was a banking crisis which came to light because of a fixed exchange rate crisis)
After the AFC there was all this talk about changing the banking system to never allow such a thing to occur again...
As a society we make the same mistakes...
as individuals we dont have to follow society...
as an Indiviual I wont make the same mistake again re the markets...
the writing was all on the wall just like in 87 (as I hear)...
and I just choose to ignore it because I found a stock so special that it blocked out all else...
im glad we had it than not have the crash...
Now we can move forward and slowly prepare ourselves for the real peak oil that speculators will not possibly be able to be blamed for...
:cool:
.^sc



IF you wish to write story`s like above and believe in them, be happy to do it but in real truth you are a DILL for even thinking above and if you got caught that makes you a bigger DILL..

[digger]

THE above story dose not tell all the truth,, the bit about the farm being sold is true,
But why this fellow besides the farm[which he was not working] had been trading in houses as well and it appears he did not have the brains to get his cash flow right and it all fell apart , Good bye farm and a DUD story..

Bricks i think you missed the point. It does not matter if he was trading in houses ,horses or women,the issue is that a farm sold well below its recent value. Also keep it in mind that this farmer[speculator] would be seen in other times as a genius that really knew how to take a punt and win.I know many that did just that and are millions ahead now.It just does not work when the finanical world implodes and all the old rules for success become the way to failure.Actually i can not even say for sure what the rules are.
An example here is Iceland.There the economy failed as nearly everyone was over spending on things of the imagination that in reality they could not afford. An old couple that always saved their money and did not join the crowd and spend up also lost nearly everything as the banks that lent out the old couple's money went under.So at this moment in time where is correct path?And where is the bottom?

[BRICKS]

Bricks i think you missed the point. It does not matter if he was trading in houses ,horses or women,the issue is that a farm sold well below its recent value. Also keep it in mind that this farmer[speculator] would be seen in other times as a genius that really knew how to take a punt and win.I know many that did just that and are millions ahead now.It just does not work when the finanical world implodes and all the old rules for success become the way to failure.Actually i can not even say for sure what the rules are.
An example here is Iceland.There the economy failed as nearly everyone was over spending on things of the imagination that in reality they could not afford. An old couple that always saved their money and did not join the crowd and spend up also lost nearly everything as the banks that lent out the old couple's money went under.So at this moment in time where is correct path?And where is the bottom?

Iceland has nothing to do with this case or NEW ZEALAND..

TRUTH has not been put and the owner has been put out to DRY. The farm was put
out to tender by the bank he would have known about it and still did nothing when the facts came out about the price he cryed poor and said i off to OZ to get some money only it was to late it is a very mistake by him and i will not talk any more on the subject as
BRICKS cannot stand DILLS that CRY..

[Crypto Crude]

that was a savaging...
hahahaahahahah... thinking through situations is the only way to make it better next time...
Maybe thats why you keep making the same stuff ups....
remember VBA when you sold half your holdings on the 19th of that month...
the next day the SP fell 29% and you bought a heap...
The next day the sp fell around 30%, and its trended down ever since...
hahahahaha...
I will keep my valuable thoughts to myself next time....
yourve got to be prepared to take it if you can dish it out like that man...
catch you round you savage cat...
:cool:
.^sc

[Crypto Crude]

13th of the 8th Bricks page four on the "airline r a great public service, endorsed by skol" thread... you tipped VBA at 96cents on page 4...
on page 5 is the other story...

hey bricky,
even you are a quicker learner...
you have learnt not to post your trades any more....
hehehehe...
;)
.^sc

[BRICKS]

13th of the 8th Bricks page four on the "airline r a great public service, endorsed by skol" thread... you tipped VBA at 96cents on page 4...
on page 5 is the other story...

hey bricky,
even you are a quicker learner...
you have learnt not to post your trades any more....
hehehehe...
;)
.^sc

IT is true you mother should have told you when you where young you would turn into
a DILL when you are OLDER.. and it happened..

NOW as for VBA. BRICKS is in front did not wait to ask you what to do, Bought very heavy
@ 27 cents and averaged the price down and now sitting and waiting if it does return
to 95 cents could have enough to BUY NEW ZEALAND.. and kick you OUT.. Ha, Ha..

[Sideshow Bob]

WE are not drinking them they are for BARTER at you rate you would drink all the PROFITS...

Bricks, you of all people should know the dangers of drinking and posting!

[bermuda]

Quite a reasonable late sell off in the oil/gas stocks today....after a reasonable start.

Either everyone is too scared to hold overnight in this environment or there is a stronger US dollar and a drop in oil in the pipeline overnight.

The IEA reportcomes out officially on the 12th but I think a lot of it is out already.

If you not in oil and gas, now is the time to have a nibble. The astute, who take notice of the report by the IEA, stand to make a killing. Remember these guys have done a complete 180 degree turn. You know why. The days of cheap easy oil are over. And this is from the crowd that thought it could go on for ages.

The wise just might remember their previous stance. Wait for oil to stabilise and then enter.

[Crypto Crude]

bricks-
IT is true you mother should have told you when you where young you would turn into
a DILL when you are OLDER.. and it happened..

NOW as for VBA. BRICKS is in front did not wait to ask you what to do, Bought very heavy
@ 27 cents and averaged the price down and now sitting and waiting if it does return
to 95 cents could have enough to BUY NEW ZEALAND.. and kick you OUT.. Ha, Ha..

bricks,
your really going to try this one on are you?
I highly doubt your average is anywhere near 27cents on VBA...
For a start 27 cents is the absolute low of VBA's share price of all time
it touced 27cents on two days this year 17th oct and 20th oct...
are you trying to convince me that you bought at the exact all time lows...
hahaha...no one does... and yet you say you went really large...
you were buying up around 90cents...(disclosed)...
you bought in on the day the SP tanked 29%...up around those prices...
and then it fell 30% the next day...
come on man...are you for real?

you have not disclosed your buying so I am not inclined to believe you...
the last time you disclosed on that thread was when VBA fell 30% the day after you bought, and has down trended ever since...
im sure you were buying on the way down... You would have had to buy a heap at all time lows to have an average even 25% above the current share price..

The punters decide if im a dill... and the punters can decide if you are a liar or not... stop telling porky pies...
:cool:
.^sc

[BRICKS]

bricks,
your really going to try this one on are you?
I highly doubt your average is anywhere near 27cents on VBA...
For a start 27 cents is the absolute low of VBA's share price of all time
it touced 27cents on two days this year 17th oct and 20th oct...
are you trying to convince me that you bought at the exact all time lows...
hahaha...no one does... and yet you say you went really large...
you were buying up around 90cents...(disclosed)...
you bought in on the day the SP tanked 29%...up around those prices...
and then it fell 30% the next day...
come on man...are you for real?

you have not disclosed your buying so I am not inclined to believe you...
the last time you disclosed on that thread was when VBA fell 30% the day after you bought, and has down trended ever since...
im sure you were buying on the way down... You would have had to buy a heap at all time lows to have an average even 25% above the current share price..

The punters decide if im a dill... and the punters can decide if you are a liar or not... stop telling porky pies...
:cool:
.^sc

THAT`s for you to wish about but we all ready know that your the DILL writer so have
a happy Xmas if you CAN..

[Crypto Crude]

you too... merry christmas, and a happy new year...
later
:cool:
.^sc

[biker]

Doom and gloom everywhere. EVERY commentator is negative about EVERYTHING. There is not a positive word to be heard in the market place. I think the bottom is approaching.

Doesn't mean to say we wont bounce along the bottom for quite a while however.

Unless of course, we have a paradigm shift, and the capitalist/financial framework of the world as we have know it is on the way out. Now, when have we heard that before?

[STRAT]

Doom and gloom everywhere. EVERY commentator is negative about EVERYTHING. There is not a positive word to be heard in the market place. I think the bottom is approaching.

Doesn't mean to say we wont bounce along the bottom for quite a while however.

Unless of course, we have a paradigm shift, and the capitalist/financial framework of the world as we have know it is on the way out. Now, when have we heard that before?I think its time I bought some glasses or at least stop drinking during the day. This post seems to be on every thread Biker:p

[trendy]

One word.... DEFLATION........then massive in INFLATION when the $trillions ever get released. Velocity of money has ground to a halt here.

I did a little on foot recon yesterday (Veteran's Day) shops here are empty and I mean really empty. Next observation is that everyone is already advertising their Xmas special deals. They normally don't start Xmas advertising until Thanksgiving in two weeks time. It seems that every retailer is trying to get a head start on their competitor to bring Xmas sales forward.

The last month the news here is reporting an average of 15k jobs per day going (being slashed). Major recession is coming.

[trendy]

Ex Chairman of Goldman Sachs - Whitehead sees slump worse than Depression.

http://www.reuters.com/article/Finance08/idUSTRE4AB7HT20081112

NEW YORK (Reuters) - The economy faces a slump deeper than the Great Depression and a growing deficit threatens the credit of the United States itself, former Goldman Sachs chairman John Whitehead, said at the Reuters Global Finance Summit on Wednesday.

Whitehead, 86, said the prospect of worsening consumer credit woes combined with an overtaxed federal government make him fear that the current slump is far from over.

"I think it would be worse than the depression," Whitehead said. "We're talking about reducing the credit of the United States of America, which is the backbone of the economic system." Whitehead encountered plenty of crises during his 38 years at the investment banking firm and was a young boy during the 1930s.

Whitehead warned the country's financial strength is at risk due to the sweeping demand for tax relief and a long list of major government spending plans.

"I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America," said Whitehead, who served as chairman of the Lower Manhattan Development Corp after the World Trade Center was destroyed during the September 11, 2001 attacks.

Whitehead, who helped make Goldman a top-tier Wall Street firm and led its international expansion, left in 1984 to become a deputy secretary of state under Ronald Reagan.

He warned that the country's record deficit is poised to balloon as the public calls on government for more support.

"Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds," he said. "Eventually U.S. government bonds would no longer be the triple-A credit that they've always been."

There are at least ten "trillion dollar problems," facing the United States, he said, including social security, expanding health insurance, rebuilding infrastructure and increased spending on green energy. At the same time, the public does not want to pay for it.

"The public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs -- all very costly and all done by the government," he said.

Large deficits can weaken the country's credit and increase its borrowing costs, which already constitute a significant part of funding to cover expenses. Whitehead said it could take "several years" for the current problems to be resolved.

Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes.

"I just want to get people thinking about this, and to realize this is a road to disaster," said Whitehead. "I've always been a positive person and optimistic, but I don't see a solution here."

[digger]

"I just want to get people thinking about this, and to realize this is a road to disaster," said Whitehead. "I've always been a positive person and optimistic, but I don't see a solution here."

Nobody really has a solution just best guesses. Mine is that Peak Oil is well understood by the powers that be but also understood by them is the reaisation that such a general concept would cause panic,therefor we have a finanical crisis in its place which will somewhat have the same effect of reducing consumption. Goverments will chance the world finanical situation soon under a new agreement,the last being Brenton Wood ages ago.After governments buy up large holdings in companies and inferstructure i expect a big wave of inflation.Inflation is necessary as it certainly has the effect of stopping people sitting on there money and starting spending again.Super inflation is just preferable to a long depression and job loss.
I still hold that oil is the place to put your money but in this abnormal times it just does not for now look like it.Cash for now is King until inflation is released.
My 2 cents worth.
Digger.

[Crypto Crude]

My understanding is that if GM go under then it will bring Ford, and other auto makers, and suppliers to GM and about 3 million jobs world wide...
This will be bad if GM is allowed to fail...
The Stock is worth zero cents unless it is bailed...
Even then we wont have a depression ---> but the stock market might react like it...
depressions are associated with very high unemployment, and we are not likely to see 20% 30% unemployment levels...
we are not likely to see defaltion...
its not that bad...
as I said, double bottom or slight over shoot to 7k-7.5k Dow...
thats it...
:cool:
.^sc

[winner69]

My understanding is that if GM go under then it will bring Ford, and other auto makers, and suppliers to GM and about 3 million jobs world wide...
This will be bad if GM is allowed to fail...
The Stock is worth zero cents unless it is bailed...
Even then we wont have a depression ---> but the stock market might react like it...
depressions are associated with very high unemployment, and we are not likely to see 20% 30% unemployment levels...
we are not likely to see defaltion...
its not that bad...
as I said, double bottom or slight over shoot to 7k-7.5k Dow...
thats it...
:cool:
.^sc

You said GM worthless unless bailed .... probably correct .... and as such if bailed the venture capitalists who own a fair chunk of GM should not be the ones who are bailed out .... they should lose their investment eh .... which only leaves the option to nationalise the wretched thing ... but then do taxpayers really want a dog like this.

It's not like the whole industry is in the **** is it ... just one or two or three players

Whats worse is the Aussie govt bailing out the industry over there.

Hope you are right this is only a recession .... but the a depression is just a long protracted recession .....

[AMR]

What are people's thoughts on GM debentures? If they survive they are back to be worth the full face value, even under a government bailout correct?

Would Toyota or perhaps the Chinese government be interested in GM?

[Nitaa]

I can see the light at the end of the tunnel. Umm.. sort of..its coming closer.. nup its a bloody freight train with its lights on full beam..

On a more serious note.. Nita is taking a little hammering on the portfilio today but thats life. On a positive, NZO must be licking their chops with companies starting to beg them for assistance.. The longer this carnage goes on the better nzo will walk out of it in my opinion

[boysy]

any company that has enough cash for the next few years definately have one up over all the rest of them. oil and gas companys must be ****ting their pants that have no cash and have just refinanced or have to do so soon. Companys with cash are waiting at the bottom of the cliff waiting to sort through the carnage TUI couldnt of come onstream at a better time for the JV partners thats for sure.

[duncan macgregor]

I can see the light at the end of the tunnel. Umm.. sort of..its coming closer.. nup its a bloody freight train with its lights on full beam..

On a more serious note.. Nita is taking a little hammering on the portfilio today but thats life. On a positive, NZO must be licking their chops with companies starting to beg them for assistance.. The longer this carnage goes on the better nzo will walk out of it in my opinion NITA, the management of NZO have their own interest first, the company interest second, and the share holders interest further back down the line. I will leave you to work out if you have enough interest to keep holding all the way down. Macunk

[peat]

What are people's thoughts on GM debentures? If they survive they are back to be worth the full face value, even under a government bailout correct?

The Credit Default Swap rates on GM and Ford are crazy high. Thats gotta be tellin ya something.

[Nitaa]

NITA, the management of NZO have their own interest first, the company interest second, and the share holders interest further back down the line. I will leave you to work out if you have enough interest to keep holding all the way down. MacunkMacca. I think you forget something. If i am comfortable with a stock i dont need or want to sell. I dont care if the price drops another 20 or 30% because over time i believe i have a good investment.

I dont sell my house to live in even though i may be faced with 10 or 20% depreciation over the next 2 years. If you sold all your houeses etc and rented for a short to medium term view then that is your choice.

I appreciate all the advice you give to a novice like me but trust me. I can take care of myself. You should be morwe concerned about your own and family's afair before playing Florence Nightingale

[STRAT]

Interesting but slightly worrying developments in the US this morning ... DOW stayed off its bottom of the 10/10 but the broader S&P500 found a new low ... Worrying stuff. Bought yesterday but no buying today ... Interesting that TEL held up yesterday; one of the few that did; and on reasonable volumes (for the times!)What am I missing here Belgarion? I have the S&P500 up nearly 7% end of day 13/11/08 although intraday low was lower than the low of last month. I would have thought this mornings end of day rise to be positive.

[winner69]

What am I missing here Belgarion? I have the S&P500 up nearly 7% end of day 13/11/08 although intraday low was lower than the low of last month. I would have thought this mornings end of day rise to be positive.

Yep up nearly 7% ...... funny the markets turned just as Bush came on TV and did a rave .... prob a bit of back room 'bargain nunting' going on .... george only has a few more months to trnasfer another few more hundred of billions to his mates and wouldn't want the market to really collapse

All good stuff eh ...watching these ups and downs .... good to know its all over now though ..... even AIG is hanging in there at about $2 ....... wasn;t your entry point $4 something belg

[STRAT]

good to know its all over now though ..... Should I take it from that W69 that you think we have seen the bottom too?

[winner69]

Should I take it from that W69 that you think we have seen the bottom too?

George told us the world is on top of it problems ..... but I fear that there is still some more downside to equity markets.

I also think that whenever we get to the bottom (be nice to know that day eh) markets will consolidate at those levels and that solid consistent gains are some time off

Enough for you strat .... I didn't believe a word George said but the audience loved everyword and cshowed appreciation after every comment ...... esp the one that no matter what happens New York WILL ALWAYS be the world's financial capital .... hurrah hurrah they went into hysterics

[STRAT]

George told us the world is on top of it problems ..... but I fear that there is still some more downside to equity markets.

I also think that whenever we get to the bottom (be nice to know that day eh) markets will consolidate at those levels and that solid consistent gains are some time off

Enough for you strat .... I didn't believe a word George said but the audience loved everyword and cshowed appreciation after every comment ...... esp the one that no matter what happens New York WILL ALWAYS be the world's financial capital .... hurrah hurrah they went into hystericsPlenty thanks;)

as to the exuberant crowd the yanks did invent the cue card I think :D

[Crypto Crude]

AMR-What are people's thoughts on GM debentures? If they survive they are back to be worth the full face value, even under a government bailout correct?

Would Toyota or perhaps the Chinese government be interested in GM?

Debentures are not secured by company assets, and are therefore unsecured, and only are subject to the companies earning power...
these dentures are very risky...
Because they are effectively worthless, but debenture holdings do have preferential treatment over shareholders...

Why would China, or Toyota be interested in a company worth zero cents ?...


winner69-You said GM worthless unless bailed .... probably correct .... and as such if bailed the venture capitalists who own a fair chunk of GM should not be the ones who are bailed out .... they should lose their investment eh .... which only leaves the option to nationalise the wretched thing ... but then do taxpayers really want a dog like this.

Well back in the 1970's I believe it was... GM had real big problems... The Government stepped in and bailed GM out through buying stock...
A few years later they sold the stock on market and made a killing...
This time could be different...

As we have gone into this crisis the US government bought up dodgey assets real cheap and could sell them back to the market in years. we just have to wait and see if they do make big profits...
The RBNZ made 250 million dollars when they starting tammering with the Foreign exchange market...
there is money to be made when assets get mis priced...
:cool:
.^sc

[airedale]

When to re-enter...? Nobody knows....yet

http://wallstreetwindow.c.topica.com/maamtXyabLTamaKuE6QbaeQCNG/

[winner69]

maybe capitulation was the 1st 2 weeks of October when , say, the ASX200 fell by 4% one week and then a massive 16% the next week. That followed a slow grinding down process from 7000 to 6000 to 5000. Since those recent 2 really bad weeks that index is only down a further 2.8%. Sometimes better to eliminate a lot of the hourly/daily noise and look at the weekly movements instead




This week the ASX200 gave up the 3% it gained the week before and closed at another weekly low ..... hanging around just under the 4000 mark for a while now does suggest some form of consolidation at these levels ..... so maybe this is the bottom?

[trendy]

http://www.youtube.com/watch?v=iicB80Mwz8w

[ratkin]

One thing is for sure , sooner or later the markets will go up and when they do everyone will believe it another sucker rally , but it wont be , it will be the real thing and most people will be too battered and bruised to be involved.
Personally i have been buying for a few weeks now , sure the economies of the world will be a mess but it largely factored in . The sharemarket has taken its battering , now its the turn of the general public to suffer, ie rising unemployment and terrible returns on property

[duncan macgregor]

One thing is for sure , sooner or later the markets will go up and when they do everyone will believe it another sucker rally , but it wont be , it will be the real thing and most people will be too battered and bruised to be involved.
Personally i have been buying for a few weeks now , sure the economies of the world will be a mess but it largely factored in . The sharemarket has taken its battering , now its the turn of the general public to suffer, ie rising unemployment and terrible returns on property RATKIN, One of us is definately wrong, so lets look at it from my view point, then compare. When you get workers getting paid ten times as much in the car industry for instance, competing with workers from another country having their produce competing in an open market only one result is pending.
The answer is to abandon the industry, and set up in the cheap labour country not throw good money that you have to borrow to save it from going under. The whole world economy is under threat, or cant you see that. NZ has abandoned its manufacturers who are now fleeing the country in droves.
Trying to pick the bottom in a downtrending market heading for the biggest crash ever will place you in a very high risk position.
You must pay the piper, you can borrow to repay your borrowings, but one day the piper will ask for his money, and the whole system crashes.
Being of sound mind i heard the piper tuning up at the end of last year and got out the market. He is only in the middle of the tune right now my friend dont be around when he wants paid. Macdunk

[ratkin]

I didnt mention the car industry , and i didnt deny that world economies are in a mess. I simply suggested that all this is known and largely factored in to current share prices.
There are still sectors to be very wary of , anything to do with property and banks for example and companies with large debts are to be avoid.

In short there is plenty of company risk around , however for solvent companies not in the above sectors i suggest the bottom has already been reached.

Im talking healthcare , supermarkets and the like. Stocks such as cochlear , qbe insurance , metcash , various oil stocks , good biotechs with cash supplies . There are plenty of bargains around now and it would be a waste not to buy them while they are cheap.

Some of the australian export companies are going to have massive increases in profit from the falling aus dollar yet due to the credit crunch they are just treading water price wise and will be due for a big rerating at some point.

[bull....]

The only limit to how far markets can fall is zero.

Anyone who suggests everything is factored into prices doesnt understand this concept and there are plenty of so called financial experts touting everyday that everything is priced in.

If this was a valid argument by these so called guru's then they should explain to us all why the chinese market has crashed by so much.
I assume based on the argument above the market is pricing in total oblivion for china's economy.

[Stranger_Danger]

The chinese market crashed so much because it was a bubble.

Oil collapsed because it was a bubble - by the time short selling became a dirty words, the hedge funds had to buy *something* and it wasn't going to be stocks at that point.

I'm buying - slowly - and it is nice to see good companies trading at what I consider fair prices.

It is only when they are trading at UNFAIR prices (ie low multiples of battered earnings) that I'll get truly excited, but, we might not get there - I'm having a bob each way.

People are talking about a "great crash" - is nearly 50% in a year not enough for you?

I totally accept that stocks overshoot on both the upside and downside. Is is hard to grimly - slowly - buy in this environment.

Look around though. Are debt free companies with cash, trading on low multiples, with large and often growing director shareholdings really, truly in a bubble at the moment?

Really?

[stevesnz]

Disclaimer: I'm a stock newbie

I agree that there are plenty of companies that are well priced right now, and in normal circumstances absolutely they are a steal

What stops me from jumping in right now is that share price is pretty much based entirely on investor emotion right now, which if the US market is anything to go by is currently schizophrenic and is having daily mood swings, mostly for the worse.

economic conditions are horrible right now and will remain horrible for some time. there will be more big companies failing and mum and dad investors running around like headless chickens selling their supermarket stocks when completely unrelated companies like GM go bankrupt. It defies logic but it's how the stockmarket works

So is this the right time to buy undervalued stocks - IMO no, because your those undervalued stocks are probably going to get even more undervalued

can't wait for the 'big rally though', it will be quite something!

my $0.02

[Stranger_Danger]

Steve,

If your favourite food was steak and the price of steak was, as per your quote "pretty much based entirely on investor emotion right now, which if the US market is anything to go by is currently schizophrenic and is having daily mood swings, mostly for the worse." would you be more or less interested in eating steak than you usually are?

[Dr_Who]

The entire world is going into recession with the exception for parts of Asia. Even Asia is being dragged into this abyss with substantially much lower growth in 2009. With huge debt America is clearly bankrupted. What will drag us out of this whole? Jap has zero interest rates to play with. US is near zero rates similar to Jap.

[macduffy]

Hi steve.

You may be a newbie to investing but it looks like you've cottoned on to two important themes.

- Don't try to beat the market ( trend) . There will be plenty of time to buy when the uptrend comes and there's little point in trying to be a hero and pick the bottom.

- Don't buy a stock if the SP is in a downtrend. (See above.)

Took me a long time to learn these " rules " and yes, occasionally I break them but usually to my cost!

Cheers.

:)

[srowe]

Eating steak whenever you feel like it is,imo the mindset of the era we may be about to leave behind. Lots of people,including some of us,may have to get used to hamburger.

[Billy Boy]

http://www.stuff.co.nz/4763652a13.html

BB:)

[duncan macgregor]

I see a great financial system collapse in the world economies. I also see a new world financial world bank set up with a single currency for all countries with strict rules of conduct. I see this plastic card get yourself up to the eye balls in debt at the drop of a hat system outlawed. I also see that the sharemarket is not a place for risking my money for quite some considerable time.
I also think America has had it, with NZ not to far behind it if we carry on with living beyond our means, as we have been doing.
When you see PE ratioes fly out the window, replaced by fear and panic, you should take the hint and make a quick dash for the door. Macdunk

[Stranger_Danger]

You run when you see fear and panic?

Ok then, so the world financial system collapses as you say.

Presumably, that will lead to *real* fear and panic, and possibly war.

What is your plan then, and how is your portfolio management geared towards this outcome which is the end result, should you be right?

When I see fear and panic, first, I try and think about it, then, I try and profit from it.

All I know about emotions is I want the other guy to be more controlled by his than I am.

[duncan macgregor]

Another example of why we're at the bottom ;) ... A sermon from a soothsayer reading entrails of an already dead carcass. BELG, only an opinion which so far has picked it dead right. The trouble with voicing an opinion is that some people turn all nasty if they have an opposite point of view. Belg the market will take a very long time to recover whatever happens. Banks have deposits gauranteed for starters making it a safe investment for the average punter. The entrail tea leaves brigade or TA investor as you describe, has been long gone out the market. The fundamental or FA brain dead dont have a sell system brigade, are bleeding to death. You sound like the averaging down investor dont dare tell me that i am wrong when the PE says i must have it right, brigade belge. I have been out the market all year belg other than a very small play on CUE at an average of 14.5c tell us all what you have done?. Remember it was me that said the market would downtrend leading up to a crash after the olympics and that i was out the market. Your old buddy keeping you honest Macdunk

[Hoop]

I see a great financial system collapse in the world economies. I also see a new world financial world bank set up with a single currency for all countries with strict rules of conduct. I see this plastic card get yourself up to the eye balls in debt at the drop of a hat system outlawed. I also see that the sharemarket is not a place for risking my money for quite some considerable time.
I also think America has had it, with NZ not to far behind it if we carry on with living beyond our means, as we have been doing.
When you see PE ratioes fly out the window, replaced by fear and panic, you should take the hint and make a quick dash for the door. Macdunk


A few Conclusions from "Anatomy of the Bear" by Russell Napier

Bear market bottoms are characterised by an increasing supply of good economic news being ignored by the market. While numerous bulls bang the drum for equities even at the bottom of the market, they will be ignored.

Many commentators will suggest the worsening fiscal position will prevent economic recovery or a bull market in equities. They will be wrong.

Decline in reported corporate earnings will continue well past the bottom of the market.

However the question remains "Is the bottom near?" Many historic signals say yes, many experts say no (incl Mac D).
The NZ50 chart below shows a steep downtrend channel heading quickly to the 1997 primary support. Will it bounce off upwards (respect) from this long term support level, or will it meander within this downtrend channel for the time being and give us another Bear Market Rally?

[Stranger_Danger]

KW - agree completely, or in other words, "In the short term the market is a voting machine, in the long term it is a weighing machine".

Sometimes - often, in fact - the voters get it pretty much right.

In July 2007, however, the market was extremely drunk - basically legless - on positivity.

Today, it is pretty smashed - not tipsy but not yet legless - on negativity.

My trigger finger is getting oh so incredibly itchy to "go large" but no, I'll keep steadily accumulating. There are clearly people "just selling" now though, and I believe the Govt Guarantee structures in various countries will (in hindsight) be seen to have got a LOT of mum and dad investors out of equities and into cash at precisely the wrong time.

There is only one true "Government Guarantee" - that being the guarantee that the government response to the sort of environment we're in will always make it worse! That is why I think we ain't quite done yet (collectively, they'll all think of something REAL silly soon!) although - in my view - the market is pretty attractive even at current levels.

[Lizard]

A few Conclusions from "Anatomy of the Bear" by Russell Napier

Bear market bottoms are characterised by an increasing supply of good economic news being ignored by the market. While numerous bulls bang the drum for equities even at the bottom of the market, they will be ignored.

For the geeks, here's the link to the November Financial Stability Report (http://www.rbnz.govt.nz/finstab/fsreport/3486853.pdf) from the RBNZ (produced every 6 months). Might help decide if there is "an increasing supply of good economic news".

News Release as follows...


New Zealand’s financial and payments systems have held up well in the face of extreme disorder within the international financial markets, Governor Alan Bollard said today, when releasing the Bank’s November 2008 Financial Stability Report.

“While we are far from seeing the final impact of the financial and economic disruption, New Zealand’s banks, and the Australian parents of the majors, are well-positioned to withstand the economic downturn,” Dr Bollard said.

Dr Bollard said that New Zealand’s banks have not experienced the significant financial losses affecting financial institutions in the United States and Europe.

“Also, they have sufficient capital buffers to withstand the higher loan losses that will inevitably result from the economic downturn.

“However, recent global market conditions have affected the cost and accessibility of offshore funding that our banks – and the country – rely on heavily.”

Measures undertaken by central banks and governments around the world have contributed to some improvement in market conditions over recent weeks. New Zealand has also adopted a range of policy measures to help reduce financial and economic risks.

Deputy Governor Grant Spencer said the retail deposit guarantee scheme that the Government announced in October assures New Zealanders that their deposits are safe. The wholesale guarantee scheme announced in early November is aimed at facilitating the re-entry of financial institutions to offshore wholesale debt markets.

“These schemes are a temporary response to exceptional circumstances. While some distortions are inevitable, the Government has tried to reduce these distortions through the use of risk-based pricing and other features. The Bank will also monitor and supervise the guaranteed institutions more intensively, and will accelerate implementation of the new non-bank prudential regime.

“Recently we issued a consultation document on proposed new standards for the banks’ management of their funding and liquidity. When finalised, this policy will reinforce incentives on banks to diversify away from short-term wholesale funding and reduce their vulnerability to credit market disruptions.”

Mr Spencer said banks have been constructing Residential Mortgage Backed Securities following the Reserve Bank’s announcement in May that it will accept these securities in its domestic market operations. “A number of banks now have these securities in place. This will enable us to maintain liquidity in the banking system if the offshore funding channels continue to be disrupted.”

Dr Bollard noted that a slowing in the economy had been reflected in an easing in credit growth, and savings appeared to be improving, particularly in the household sector. Together with the decline in the exchange rate, this is expected to improve New Zealand’s external balance and reduce the need for foreign borrowing over time.

“However, global developments have proven extremely disruptive and it will likely be some time before financial market conditions normalise. The Bank will continue to adopt measures as needed to maintain the stability of our financial system as far as possible in these difficult times.”

[duncan macgregor]

KW, Surely you dont beleave guff like that. How much do you think you might lose in a downtrending market, versus how much you might lose by allowing an uptrend to establish before buying back in. The long term investor with no stop loss strategy has been sitting duck material now you advocate that it does not matter when to buy in the market. I would say that anyone dumb enough for that would be better served by staying well clear of the market. I have been waiting all year to buy back in. I can now buy half as many again in most companies with a similar ammount of money. The market when it finally turns, wont do it over night leaving you in the lurch, but will slowly start to show buy signals over two or three months. There are a lot of people waiting to sell when their losses are recuperated never to return, which will make the turn around slow and steady.
More money gets lost due to impatience than any other reason. Macdunk

[bull....]

buy & hold strategy , or is it buy & hope strategy regularly commented on as the best way to buy shares for the long term. Good luck

[macduffy]

Hi KW.

I agree with most of that, except in the matter of timing.
I certainly won't be selling anything but wouldn't underestimate the depth of the current downturn and its potential to get uglier, especially on the economic, as opposed to the sharemarket front, before things start to improve.
I expect a lot of people will lose their jobs, retail sales will drop further and companies will fail. So while conditions will eventually improve I'll be sitting on the sidelines - well, most of the time - and waiting for that improvement before I commit further serious money to the market.

;)

[Stranger_Danger]

Question : Can anyone point me to a positive article that suggests buying shares, or in any way even hints that you wouldn't be completely on crack to consider doing so?

Disc : Buying.

[ratkin]

When you hear that buy and hold is dead then you know the bottom is very close

[The GrandMaster]

Disc : Buying.

crack or shares?

[Stranger_Danger]

crack or shares?

Shares. I'll wait until the recession marks down the price of the finer things in life like crack before "investing" in non income producing assets.

p.s yes yes, before the next smart a** comes in, I realise it is income producing if you sell it on a street corner etc....

[peat]

Question : Can anyone point me to a positive article that suggests buying shares, or in any way even hints that you wouldn't be completely on crack to consider doing so?

Disc : Buying.

yes SD there was one from ABN Amro y'day

i have the pdf

heres some of the text




Loud and Clare
Some people think our equity strategists have lost the plot (I'm mentioning no names). Over
the last few weeks, they’ve remained resolutely bullish about equities, in spite of markets
following a random walk. Needless to say, it’s been entertaining to watch their attempts to
convince our traders and sales team they should be more bullish. But now it seems our
strategists have some competition in the optimism stakes. One institution is so convinced of
the long-term prospects for equities that it has decided to borrow to invest in the equity
market. Its name? Clare College in Cambridge. Now, those of you with a more pessimistic
streak might believe Clare will end up selling its prime Cambridge site when its investment
fails. Perhaps it’ll have to move to an industrial estate in Royston and force its students to
commute. But there are some powerful fundamental arguments why Clare's bet will pay off.
The reasoning is straightforward: on several measures, equities look cheap. For instance,
the earnings-yield ratio and Robert Shiller’s cyclically-adjusted PE have fallen below critical
long-run average levels. Even the dividend yield on US stocks has risen to levels not seen
since the mid 1990s (see page 2). Last week, it rose above the 10-year Treasury yield for the
first time since the 1950s. It seems markets have already discounted a recession-like fall in
earnings. Consequently, investors should be able to ‘look through’ the inevitable wave of
analyst earnings downgrades when it arrives. Of course, forced selling, risk constraints and
other technical factors could push markets lower in the short term. But current valuations
should attract anyone able to take a medium-term view.
Naturally, there are risks to this investment case. There are two I seem to hear regularly
(funnily enough, both imply ‘it’s different this time’). First, this recession could be far deeper
than previous instances. With frozen money and credit markets impairing the monetary
transmission mechanism and nominal interest rates closing in on the zero bound, the US
economy could be headed for a bout of debt-deflation. We only need look at how Japanese
equities performed in the 1990s to realize this wouldn’t be positive for asset markets. As
deflation sets in, cash becomes increasingly attractive. Still, the size and timeliness of the US
policy response has far exceeded that in Japan, making this a tail risk rather than a probable
outcome (I’ll explain why in more detail tomorrow).
Yet, even in the case of a normal recession, it still seems possible to be pessimistic about
equities. Since the early stages of this decade, profits have risen dramatically as a share of
GDP in several economies, most notably the US and Germany. Some suggest this is a
structural phenomenon – a product of globalization. If this view turns out to be wrong,
profitability could suffer disproportionately during this downturn. I have some sympathy with
this view. Still, the improvement in profitability has primarily accrued to the financial sector –
a by-product of low interest rates and increased leverage. With financial firms generally
trading at huge discounts to the rest of the market, this also looks largely discounted. Clare’s
long-term case for buying equities looks sound.

[Stranger_Danger]

Belg - how long will you hold it for?

[Stranger_Danger]

Oh, bugger that then. If you'd said "5 years" and it has to be NZX, I'd say PPL.

But stops? Margin? I wouldn't be buying anything on that basis in this market.

[Hoop]

Nice Day to be outside today ..birds are happily chirping ..budgies are making happy noises.. cats, pet rabbits and horses lying asleep in the shady areas.. cows out eating the lush spring growth.. all the animals on my 6 acre block are serene and happy.. blue skies.. sun is shinning...warm day.. no wind.......Humans in their computerised rooms divorced from this outside environment all worried and stressed out over their own actions (as all technical supports broken).

Who says Humans are the smarter species on this planet.

Been buying ..Hoop is not acting human today :p

[trendy]

Got some emails from bankers and brokers in china where rumours are rife that china is thinking of using its huge forex reserves to go on a shopping spree. Rumours include american banks and even the american car industry. If china does start bottom feeding with its forex reserves what will happen? ... ;)

Double edged sword. They get the US hard assets but will need to sell their US debt holdings....this will force treasury i-rate borrowing costs up....lending rates up...taxes up....economy down further.

[Sumnerned]

Once upon a time, in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would n ow buy on his behalf.

While the man was away the assistant told the villagers, "Look at all these monkeys in the big cage the man’s already bought. I’ll sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up their savings and bought all the monkeys. But, they never saw the man or his assistant again, and once again there were monkeys everywhere.

Now you have a better understanding of how the stock market works.

[GTM 3442]

Sumnerned, you should've become a consultant and told that to the guys at Babcock & Brown !

[Sumnerned]

Sumnerned, you should've become a consultant and told that to the guys at Babcock & Brown !

I wish! It's just so damn difficult to spot the end point of any pyramid scheme, chain letter, or monkey market. Clearly BnB couldn't do it either.

[Stranger_Danger]

Belg - you taking a profit, or holding?

I like what PPL are doing - I think they're realistic about the environment and managing appropriately. I also believe that between the CEO, Rod Duke and Jan Cameron with their large shareholdings, any "idiot schemes" are likely to be nipped in the bud by these three experienced retailers.

[ratkin]

If the Dow rallies in the last hour then we really may of seen the bottom , was expecting it to give back a hundred or two today

[Stranger_Danger]

Nah, we're not at the ultimate bottom yet. Close enough to continue maintaining a buying program though, IMO.

Talking about Australasia which is where the bulk of us play, RIO will get killed today and I'm counting the weeks (days?) when it comes to ANZ.

There are still a few events to play out, the only common theme being companies that are too closely associated with the 4 letter word that is currently considered more obscene than f***.

[Footsie]

What has happened to Phaedrus????????????

[AMR]

On holiday I believe.

[Placebo]

Once upon a time, in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would n ow buy on his behalf.

While the man was away the assistant told the villagers, "Look at all these monkeys in the big cage the man’s already bought. I’ll sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up their savings and bought all the monkeys. But, they never saw the man or his assistant again, and once again there were monkeys everywhere.

Now you have a better understanding of how the stock market works.


Sumnerned your story reminds me of the Dr Seuss story "The Sneetches", which I read to my 4-year-old last night. Oddly enough the character in that is Sylvester McMonkey McBean - yet another triumph of Seussist naming!

It's really a story about the futility of prejudice, but has a nice sub-text around this chap who turns up, takes advantage of their pride, takes all their money then buggers off.

[ratkin]

Those on the sidelines will soon face a dilema , sit back and watch the markets rally and risk missing out , or enter themarket and risk another selloff

[duncan macgregor]

Those on the sidelines will soon face a dilema , sit back and watch the markets rally and risk missing out , or enter themarket and risk another selloff
RATKIN, Missing the bottom is a good idea those people silly enough trying to pick it are now covered in crap. When a market sector shows buy signals i will return but quite content watching you lot playing SILLY BUGGERS.
Macdunk

[duncan macgregor]

I guess if everyone adopted this philosophy then there'd be no bottom ... until we got down to zero and it'd bee free shares for everyone.

Thank goodness we have fundies and their stolid commonsense. Hey BELG its up to you, my only concern is my own bankroll. If it was not for the braindead hold at all costs type of investor i wouldnt invest in the market in the first place. The TA investor lives off the fundies that keeps the game interesting. Dont stop what you are doing we need you. Your old mate Macdunk

[duncan macgregor]

This type of investor doesn't affect movements at anytime except at IPOs. They may be braindead, but they are not competition for either TA's or Fundies.




Yip - that's a TA's viewpoints.

As primarily a fundie I have the reverse view - I'd suggest that it is us who is living off you as you guys spot uptrend we create, further the uptrend beyond where it should be, we exit having had our profits maximised, you spot our exits after the fact as downtrends and then exit. We take more risks but our profits are greater.

I think you fine TA'ers refer to us as the "smart money" ... ;)

(Love stirring that pot....) BELG, TA means thanks alot, FA i will leave it up to you to work it out, my version has a Gordon Ramsey kitchen expression sound to it. The fact of the matter is both rely on the other to exist. Without some dummy buying my shares at the start of a downtrend, i would be stuck with them. The market would be a dead mans area without the volatility of the traders who only survive by creating waves in the market. Thats why common sense flies out the window in steeply trending markets.
The fundies all think it should make sense, when in actual fact the market is a complete nonsense.
Some people are actually stupid enough to buy shares in a downtrend bleating on about dividends as they lose their capital. The smart money are the insiders who sneak in or sneak out of a share with inside knowledge of what is coming up. This has nothing at all to do with fundamental investing. The TA people look for this as a signal to either buy or sell, leaving the FA people bewildered wondering why the sp is moving.
Reading tomorrows market is what its all about Belg learn to read the sign posts which ever way you invest thats the secret. Macdunk

[tricha]

BELG, TA means thanks alot, FA i will leave it up to you to work it out, my version has a Gordon Ramsey kitchen expression sound to it. The fact of the matter is both rely on the other to exist. Without some dummy buying my shares at the start of a downtrend, i would be stuck with them. The market would be a dead mans area without the volatility of the traders who only survive by creating waves in the market. Thats why common sense flies out the window in steeply trending markets.
The fundies all think it should make sense, when in actual fact the market is a complete nonsense.
Some people are actually stupid enough to buy shares in a downtrend bleating on about dividends as they lose their capital. The smart money are the insiders who sneak in or sneak out of a share with inside knowledge of what is coming up. This has nothing at all to do with fundamental investing. The TA people look for this as a signal to either buy or sell, leaving the FA people bewildered wondering why the sp is moving.
Reading tomorrows market is what its all about Belg learn to read the sign posts which ever way you invest thats the secret. Macdunk

Hmm, PEM rings a bell, we both did the same thing ;)

P.S and I got out way before u did.

[winner69]

This week the ASX200 gave up the 3gains from the week before and closed at another weekly low ..... hanging around just under the 4000 mark for a while now does suggest some form of consolidation at these levels ..... so maybe this is the bottom?

That was the weekly close on 14/11 of 3748 ..... following weeked dived 9% and this week saw a 10% increase and get back to 3742 ........ so ASX has gone nowhere over the last 2 weeks and is still significantly below the 4000 mark where it appeared to be consolidating. One good sign was that a bad week was recovered very quickly and that has not happened for a while.

The big question was the 9% dive to 3417 in the week ending 21/11 the last big drop .... as belg would say was that the capitulation? The worrying thing is that we still have great volatility and that every now and again when things appear to be settling down there is a really bad week ....

Technically ASX200 still in downtrend (on a weeky chart .... good to look at on a weekly basis as that eliminates the daily noise)

Still not entirely convinced we have reached the bottom .... even though looking a bit more hopeful

If Phaedrus was back from holiday I'm sure his chart would signal a 'no buy' zone

[Scuffer]

Its a rollercoaster ride and I for one think we are still on the way down a few corners to go which sort of tells me we can't see whats coming but we are still going down, China and India are slowing the descent but thats all it will keep going down until it all hits the bottom and then it will be the slow rise again to get ready for the next big fall, its how the powers that be maintain control and make money, they own the rollercoaster buddy.

[GTM 3442]

Cautiously optimistic.

Waiting for the higher high after a higher low, but seem to be confronted by a series of lower lows after a lower high. Sigh.

I couldn't pick the high at NZX50 4200, but I don't expect to pick the low, either (at NZX50 2500 ? any better guesses, folks ?).

But I do expect to make money on the way up, (even tho' I may be a little late to the party), and to lose some by leaving too late on the way down (and should have left earlier).

[duncan macgregor]

My own point of view is we have seen nothing yet. I hope that i am wrong, but i see big trouble ahead in the financial markets. I see a collapse in this credit system of shop until you drop way of life, that seems to be the the only answer to getting us out of this mess.
Throwing good money after bad to keep an unworkable system going only leads up to a bigger mess at the end.
The problem is that people who are leading a responsable financial life get caught out with losing their hard earned savings when it all collapses. I definately wont be investing in shares until the market shows a definate trend up. People must have shelter, eat, and exchange goods, the money system and credit rules will be changed like it or not.
The system is in a state of collapse if you think otherwise then keep buying if not then buy material assets not shares. Macdunk

[warthog]

The system is in a state of collapse if you think otherwise then keep buying if not then buy material assets not shares. Macdunk

The hog is interested, MacDunk, in what you consider material assets worthy of purchase at the minute.

[digger]

My own point of view is we have seen nothing yet. I hope that i am wrong, but i see big trouble ahead in the financial markets. I see a collapse in this credit system of shop until you drop way of life, that seems to be the the only answer to getting us out of this mess.
Throwing good money after bad to keep an unworkable system going only leads up to a bigger mess at the end.
The problem is that people who are leading a responsable financial life get caught out with losing their hard earned savings when it all collapses. I definately wont be investing in shares until the market shows a definate trend up. People must have shelter, eat, and exchange goods, the money system and credit rules will be changed like it or not.
The system is in a state of collapse if you think otherwise then keep buying if not then buy material assets not shares. Macdunk

Macduck you have turned out to be more correct than most of the rest of us. Where to from here? I am interested in your view. Certainly i see things about to happen that in the past would have been unthinkable. Here i put interest rates at the top of the list.Whether we have a 1% or 1.5% drop on thursday will make only a short term difference. What i am getting at is that NZ and the world might well have to face a negative interest rate.
A negative interest rate is something that can only happen in two ways.The first is super high inflation that easily exceeds the positive interest rate we have all taken for granted.This recently happened in the 80's. Now I see a need for a direct negative interest rate to somewhat correct what has happened to the economy. Cash is King is the old saying we have always been fed in the times of recession and it is because positive interest rates encourage investers to withdraw monies from areas where they promote development to a holding deposite in the bank.Too much money treating water in banks and not out expanding economic activity further reinforces a recession.
It is somewhat ironic that after the govt guaranteeing deposits might will now have to put in process a negative interest rate that would guarantee that the value of their deposit will fall.
Thoughts?
Digger

[Dr_Who]

You wont seen NZ in negative interest rate. The RB has alot of room to move. The NZ OCR is current at 6.5% compare to the US at 1% and Jap at near 0%.

I see the RB only cutting rates 1%.

Indeed cash is KING for now. :)

[upside_umop]

Digger is meaning 'real' interest rates could become negative doc..

That is when interest rates are lower than inflation.

[Placebo]

http://home.btconnect.com/rdi/frazer.jpg

[Dr_Who]

DOW DOWN 680 (7.7%) points! WOW what a volatile ride. :eek::eek:

[Stranger_Danger]

What I can't figure out with Macdunk, is why he thinks cash will help him if the scenario he predicts comes true.

If it does, the 5% of my capital that remains will be invested in guns, knives and balaclavas. Unless Macdunk also has a "looting prevention" strategy, then his position is far from thought out.

[Hoop]

MacDunk's theory :eek:

[duncan macgregor]

I feel about as popular as a guy that enlightens the children to the fact that father christmas is all bullsh*t. What to do in a worst case scenario if it eventuates is all that matters. My own personal view is to buy assets that will keep a value if everything crashes. Buy a farm Digger have it mortgage free, people still require food.
In the mail this morning was a warehouse advert saying, [buy an item over $500 on no deposit with nothing to pay until june 2009]. That is the cause of this collapse, the American system in the end simply must crash. The money lenders leach off the vulmerable for so long until it all comes crashing down. It is all crashing down guys right now regardless of how much money they borrow to try and preserve this system.
Greed and corruption running out of control will bring any system to its knees {read the history books}. Macdunk

[Placebo]

Perhaps, in such a scenario, the best-off are not the ones with assets, but those without...

[Capitalist]

ITA Belgarion.

Look at what everyone is saying and then do the opposite, I say :D

Nice to read a 'glass half full' opinion these days :eek:

[duncan macgregor]

BELG, My views are no more likely to be right than your views. I saw the resource markets trend down and knew to get out the market at the start of the year. I missed the oil sector rise being to scared to have a go when it was in a steep uptrend.
The whole point of investing is to increase your wealth with the least risk. When the market is in turmoil its best to stand aside, and let the risk takers compete with the people who are silly enough to hold shares in steep downtrends.
I see a whole financial melt down as one possible out come of this situation. My view is, you cant keep borrowing money to shore up bad investments without a bad end result. If i am wrong i miss out on a few cents at the bottom of the market, but if i am right i have saved myself from total financial ruin.
I really cant see America borrowing enough to buy its way out of the mess they are in, and if they do it will only postpone the end result.
Like i said thats what i think right now, you might have a different viewpoint. Its great fishing where i live much more interested in that at the moment. Its like the market i dont go out in stormy seas catch enough or make enough on the market in calm waters. Macdunk

[trendy]

BELG, My views are no more likely to be right than your views. I saw the resource markets trend down and knew to get out the market at the start of the year. I missed the oil sector rise being to scared to have a go when it was in a steep uptrend.
The whole point of investing is to increase your wealth with the least risk. When the market is in turmoil its best to stand aside, and let the risk takers compete with the people who are silly enough to hold shares in steep downtrends.
I see a whole financial melt down as one possible out come of this situation. My view is, you cant keep borrowing money to shore up bad investments without a bad end result. If i am wrong i miss out on a few cents at the bottom of the market, but if i am right i have saved myself from total financial ruin.
I really cant see America borrowing enough to buy its way out of the mess they are in, and if they do it will only postpone the end result.
Like i said thats what i think right now, you might have a different viewpoint. Its great fishing where i live much more interested in that at the moment. Its like the market i dont go out in stormy seas catch enough or make enough on the market in calm waters. Macdunk


Yip. Better safe than sorry!

[Billy Boy]

To hell with all this doom and gloom
Have a holiday instead...come to Gods Own

http://maps.google.com/maps?f=q&hl=en&geocode=&q=queenstown&sll=-36.859948,174.777288&sspn=0.007382,0.016522&ie=UTF8&layer=c&cbll=-45.03166,168.734456&panoid=f-Y4ButRvDhqNHQWte3Myg&cbp=12,149.77981679848372,,0,5.000000000000001&ll=-45.033039,168.661273&spn=0.005846,0.013947&z=17&g=queenstown&iwloc=addr (http://maps.google.com/maps?f=q&hl=en&geocode=&q=queenstown&sll=-36.859948,174.777288&sspn=0.007382,0.016522&ie=UTF8&layer=c&cbll=-45.03166,168.734456&panoid=f-Y4ButRvDhqNHQWte3Myg&cbp=12,149.77981679848372,,0,5.000000000000001&ll=-45.033039,168.661273&spn=0.005846,0.013947&z=17&g=queenstown&iwloc=addr)

Cheers BB :D

[Lizard]

Yeah, I was just using Google Maps this afternoon and the photos are amazing! Thankfully, when I checked on my own address, the photo showed a far more impressive neighbouring property. :p

[ratkin]

Those pictures must be very old , my car dosent even have a bike rack on , i put that on over a year ago , picture must of been taken on a very gloomy day too , house not looking it best

[QOH]

Weird, our street didn't have a street view but the next street over was there.

[Sumnerned]

I agree with about 80% of your statements and about 60% of your conclusions. Being called braindead ain't much fun, but the general good humour makes up for it. Keep it up mate.

BTW WhyTF has this site got a Yank spellchecker?

Cheers

[fungus pudding]

I agree with about 80% of your statements and about 60% of your conclusions. Being called braindead ain't much fun, but the general good humour makes up for it. Keep it up mate.

BTW WhyTF has this site got a Yank spellchecker?

Cheers


Because that is what you chose to download and install.

[Sumnerned]

I don't remember doing that! Must have been too much Montana Riesling that morning.

[Stranger_Danger]

I'm with KW. Hindsight is a great thing, but I do not regret dipping my toes into the water on a regular basis - especially having come into this largely cashed up.

To me, a strategy that calls for being afraid of water, wearing a hat and holding an umbrella - and then - without the benefit of hindsight - casting all that aside on one day, diving into the deepest of water to become a fearless diver - is a losing strategy.

We all know that attempting to pick the absolute bottom is a mugs game. It is. But so is trying to pick the time when its clear the bottom was X weeks ago and now is the day to buy.

As to where the absolute bottom is, I have no idea. But I do have a question for you.

Think of the biggest idiots you know. Greedy folk, quick buck merchants, people who chase fads and bubbles, the "work / life" balance crowd, people who think Working For Families isn't a benefit, people who *always* get burnt at the top, people who'd go for an ostrich farm if it contained enough tax dodges, the folk who said houses could never go down in price etc etc.

If you know people like this....are they buying stocks?

My "idiot index" most certainly, emphatically are NOT buying shares. They're all in cash now (whats left of it...) having moved to it in the last 8-16 weeks. They're also - to a man - holding onto property if they possibly can.

Shares are nearly done getting murdered. Property hasn't started yet.

[Dr_Who]

My "idiot index" most certainly, emphatically are NOT buying shares. They're all in cash now (whats left of it...) having moved to it in the last 8-16 weeks. They're also - to a man - holding onto property if they possibly can.




The hairdressers and taxi drivers are all selling their properties and equities. Maybe it is time to buy both. ;)

[Scuffer]

Like everyone knows picking the bottom is difficult and buying when its on the way up is an easier option but if you can buy somewhere near the bottom then that is a bonus, personally I think its going down further and will continue down for another six months or more at which it will stagnate before it starts its slow crawl back up. The Dow has a few magical numbers 10,000 was one and after going below that it didn't take long to get in the 7000 to 8000, the yanks cannot keep bailing the boat they have to see where its waterline is going to end up, then and only then will the money start to appear has the bottom will have been sunk to.

[macduffy]

The hairdressers and taxi drivers are all selling their properties and equities. Maybe it is time to buy both. ;)

Good point, doc.

Charlie Aitken reports that his cab driver raves on about the merits of buying bonds ( at about a zero return after inflation). Charlie sees this as a good reason to take a very selective look at equities.
As you know, I bought a few TSE yesterday.

;)

[macduffy]

For the optimists, here's the Charlie Aitken article.

http://www.eurekareport.com.au/iis/iis.nsf/pages/9FD9100E81DD1DCFCA257512001131D9?OpenDocument

;)

[digger]

Methinks the NZX has bottomed ... pointless being in cash when the OCR is 5.0% and likely to go lower in Jan ...

This is a point i made some days ago.Interest rates once they become negative,that is the rate less inflation,will force cash holders back into some sort of investment.At the moment i have read inflation is 1% for this expected period,so if necessary interest rates could fall further yet
Digger

[Billy Boy]

This is a point i made some days ago.Interest rates once they become negative,that is the rate less inflation,will force cash holders back into some sort of investment.At the moment i have read inflation is 1% for this expected period,so if necessary interest rates could fall further yet
Digger
Digger
I wonder if this situation could'nt cause a rather large "Dead Cat Bounce"
\BB

[digger]

Digger
I wonder if this situation could'nt cause a rather large "Dead Cat Bounce"
\BB

Billy Boy even if it did we would never pick it up as the dead cat is bouncing all over the place these last few months.

[AMR]

We're going up on bad news...isn't that a good sign?

[bull....]

Cant see anything but pain for nz next year , guess the rbnz know that now.

exports returns from fonterra and tourism will be hit hard , dont they make up more than halve of our exports ( thats bad )

property prices to keep falling as they are still way over valued even on a historical basis.

share markets to keep falling.

overseas economies to continue to retrench.

aussie economy to slow big time next year , not good for us.

I think the day of reckoning is here for nz , make the right policies for the new world or go down the toilet for good.

[macduffy]

Well, the RBNZ governor is saying today that he reckons NZ's recession to be "technically" over and that he expects "very low growth " for the next four quarters.
Sounds a bit optimistic to me but, hey, he'd know better, wouldn't he?

;)

[russki]

That's a very odd comment from Bollard, people have only just started losing their jobs.. can only think he's trying to talk some confidence into people... cos if you look at what's happening globally, we're only round the first bend

[ratkin]

Whats there to worry about ? All this negativity is ridiculous.

Everytime you turn on the tv or read a paper you hear how much everybody is hurting. Who are these people?
Maybe im out of touch with the general populous but i see plenty of prosperity about.
Anybody who really wants a job can get one unless they suffer from mental problems or some other dissibility.
Interest rates are becoming very low , petrol is dropping fast , milk etc likewise.

What is there to complain about?

[bermuda]

Well, the RBNZ governor is saying today that he reckons NZ's recession to be "technically" over and that he expects "very low growth " for the next four quarters.
Sounds a bit optimistic to me but, hey, he'd know better, wouldn't he?

;)
.
I think it is high time he got out of his office.....and with comments like that....perhaps permanently. What does he mean by 'technically ' ?

[Bilo]

.
I think it is high time he got out of his office.....and with comments like that....perhaps permanently. What does he mean by 'technically ' ?

Technically over would mean that he expects growth to be positive this quarter (or possibly next as we are nearer the end of this one).

I was at presentation recently where he indicated that he expected a recession of 1991 depth - I don't remember how bad that was - but it wasn't the worst since the great depression.

It could be that he thinks that he has done enough with interest rates but I think that people have dug deeper than usual to ride this one out and will take longer to come out of their shells. Also the export sector has been mauled for years and there is just not much of it left - what there is is struggling to find customers who will pay. Bolstering the Export Guarantee scheme seemed like a good idea (from Roger Douglas).

Also the banks haven't passed the reductions on. In fact fixed rates have come down more than variable. But remain very high for investments that will probably provide a negative return for a while yet.

Quick to raise rates and slow to lower them - no wonder NZ has been going backwards for eons. There is every reason in my mind to be quick to raise and quick to lower.

[bull....]

They must be dreaming if they think they are in a stimulatory environment now.

Lower interest rates take years to feed through to the masses on fixed rates.

lower petrol prices have been sucked up by increasing costs for food ( still seem to be going up in price except for fruit , veges).
higher insurance , power , rates etc .

An now your tax cuts will be sucked back by paying more acc levies and what ever new taxes come thru in the year.

So I dont see where people have a lot of spare cash at the moment to go on spending sprees.

Bollard wants people to spend now because he knows our export sector will not save us next year.

[Snow Leopard]

Whats there to worry about ? All this negativity is ridiculous.

Everytime you turn on the tv or read a paper you hear how much everybody is hurting. Who are these people?
Maybe im out of touch with the general populous but i see plenty of prosperity about.
Anybody who really wants a job can get one unless they suffer from mental problems or some other dissibility.
Interest rates are becoming very low , petrol is dropping fast , milk etc likewise.

What is there to complain about?

Yep, that would be about right. ;)

OK, I am in Oz which may be a little different but the company I work for has just laid off several hundred people from other groups and I am no longer permitted to recruit staff despite being busy as and turning work away.
My customers are doing the same, cutting back on everything they can, (which will cost them in the long run it always does) and the outlook of many employees is negative. The fear and insecurity for many people is real and I would reckon I work in one of the most secure industry segments in a downturn. Being made redundant just before the holiday quiet time is a real downer.

There are still rocks being thrown in the pond and the ripples continue to spread. :(

The market is still pretty negative in my opinion but maybe it will perk up until the next reporting season.

regards
Paper Tiger

[Hoop]

Everyone seems to be negative now...
We must be close (or at) the buy signal (Dow Theory)

[ratkin]

So unemployment will rise to around six percent , big deal , that still historically low.

Higher unemployment will be better for buisness , it has been near impossible to hire anyone decent for a few years now , good chance to cutout the dead wood , and strengthen the workforce.

Farmers are moaning but then again they always do , too hot , too cold , too dry , too wet, dollar too high , dollar too low etc etc etc etc

Property prices stagnating. That good , ridiculous prices stopping people climbing onto the ladder , and it about time the speculators took a tumble , perhaps now people may start investing in more productive asset classes.

Banks , forced to start being sensible at last ,again good, at least 20% deposit will keep undesirable types out of my neighbourhood.

Retail , will do them good to have hard times for a while , good chance to cut inventory and throw out those rude and workshy shop assistants. They might even learn to povide good customer service.

Cars , good , what a waste all the perfectly good cars going to the dump. Maybe now the poor will stop wasting their money and cycle instead , the fat chip eating, smoking brigade could do with more exercise.

Food prices. Fruit and veg are cheap . Perhaps these fat ,processed food eating , lazy , benifit consuming classes will learn to eat proper food, and their kids may become less hyperactive . Might even cut the healthcare budget.

Out of touch? Maybe :)

[Major von Tempsky]

When to re-enter the market?

Investors such as ourselves always imagine a crash as a simple V shape but experience such as 1987 should tell us that its always much longer and flatter than one imagines.

So, if u r investing for capital gain, which most of the posters here seem to be, then its bad news all round on all the asset classes. I can only suggest you look overseas and find a bright spot - there's bound to be one somewhere, maybe Singapore altho I haven't specifically looked at Singapore.

On the other hand if you are in the significant minority here including myself who invest for income then the world's your oyster. Running over with honey. Solid companies/utilities who are continuing to make profits and declare dividends.
The only problem is getting enough cash together when u r already fully invested. I don't borrow during a downturn (borrowed some from my wife which it will take me a year to pay back - no, don't borrow from your wife, they don't understand economics and just moan incessantly), or at least not until the upturn is very clear and definite which may be a couple of years away.

Most of our best stocks are heavily weighted down by desperate and irrational overseas investors which leaves good pickings for us. Also the tax situation heavily favours NZ investment.
So, if you have a good cashflow or are sitting on a cash egg, now is the time to invest in the NZ sharemarket for the income. Real estate is stuffed, finance companies are unreliable, and certainly will become so when the government guarantee runs out, banks are lowering interest rates to depositors by the day, art and collectables are stuffed, overseas is stuffed, but the good old NZ reliables - utilities such as Telecom and Contact for example, are not stuffed and will keep making profits and distributing dividends.

[Dr_Who]

Property prices stagnating. That good , ridiculous prices stopping people climbing onto the ladder , and it about time the speculators took a tumble , perhaps now people may start investing in more productive asset classes.



NZers will always love property. That will never change unless the govt, NZSE and Securities C start have some teeth and protect the investors. Mums and dads are too afraid of the stock market.

[duncan macgregor]

I think one of the problems NZ has that nobody seems to mention, is the govt spending our hard earned tax money, buying shares in overseas companies, and local companies, at the top of the market. They have now squandered my tax money for me, the stupid bastards. I suppose its a dirty big secret of what they bought, when they bought it, or the method they used to buy it.
We now find that ACC need a huge unexpected cash injection. Why did they not ask a simpleton like me where to invest the funds, at least i was smart enough to see it all coming with my limited knowledge, and get right out the market before it collapsed.
I think they must have taken advice from MARY HOLM that nice lady with the Herald col that advocates you spread your investments like eagle sh*t over the paddock and hope for the best. Macdunk

[Placebo]

I think one of the problems NZ has that nobody seems to mention, is the govt spending our hard earned tax money, buying shares in overseas companies, and local companies, at the top of the market. They have now squandered my tax money for me, the stupid bastards. I suppose its a dirty big secret of what they bought, when they bought it, or the method they used to buy it.
We now find that ACC need a huge unexpected cash injection. Why did they not ask a simpleton like me where to invest the funds, at least i was smart enough to see it all coming with my limited knowledge, and get right out the market before it collapsed.
I think they must have taken advice from MARY HOLM that nice lady with the Herald col that advocates you spread your investments like eagle sh*t over the paddock and hope for the best. Macdunk

MacDunk I am not sure the ACC account is related to the corp's investing activity. My understanding is it is an account for non-workers (children, oldies etc) financed from taxes.

All very well to take a pot-shot at ACC for holding a portfolio in a market decline. Yes they will be suffering, but overall they have made a lot of money and it has been a successful strategy for them.

Liked the Mary Holm line :)

[duncan macgregor]

PLACEBO, If they have money to invest in shares they should not be running out of money to run their operation. Why should we pay taxes for them to squander on the market then be left footing the bill to keep them running. I would say they have now taken a substantial loss in their market ventures, but we will be kept in the dark on that i expect.
The whole market is down fifty pc this year.
They bought a great pile of NZO options then spent $1-50 converting them for starters and GAUD knows how much they lost so far on PRC. I would lay odds that they were stupid enough to invest in America where they stand to lose the lot.
A sudden dreaded thought just dawned on me they might be running to the brokers for advice. Macdunk

[STRAT]

MacDunk I am not sure the ACC account is related to the corp's investing activity. My understanding is it is an account for non-workers (children, oldies etc) financed from taxes.

All very well to take a pot-shot at ACC for holding a portfolio in a market decline. Yes they will be suffering, but overall they have made a lot of money and it has been a successful strategy for them.

Liked the Mary Holm line :)
Hi Placebo,
Im with Macca on this as I also heard "moneys lost through bad investment"
ACC is a shameful badly run good Idea that has turned into a gazillion ton monkey on the back of all of us. All the staff members I have met ( 3 in total and non work related ) had the IQ of a plumb tree.

This is what I reckon will happen. National will privatise it and once everyone has gone elsewhere for their insurance Labour will get back in and buy it back and we will all be left with 3 ACC bills per year.

Hold up :eek: thats already happened :rolleyes:

Probably happen again too :mad:

Best fix for ACC would be a bomb

[duncan macgregor]

According to SHARECHAT today the GOVT has a 3.5 billion dollar loss on its investment portfolio. Pretty well sums up that fools and money are soon parted. Macdunk

[fungus pudding]

Hi Placebo,
Im with Macca on this as I also heard "moneys lost through bad investment"
ACC is a shameful badly run good Idea that has turned into a gazillion ton monkey on the back of all of us. All the staff members I have met ( 3 in total and non work related ) had the IQ of a plumb tree.



I presume that has a lower IQ than one on a lean.

[peat]

The ACC has always bought shares
I remember seeing the C/N's for them buying Chase Corporations at $9.00

[winner69]

Technically ASX200 still in downtrend (on a weeky chart .... good to look at on a weekly basis as that eliminates the daily noise)

Still not entirely convinced we have reached the bottom .... even though looking a bit more hopeful

If Phaedrus was back from holiday I'm sure his chart would signal a 'no buy' zone

ASX down nearly 7% this week to close at 3489 which isn't that far off the recent low weekly close of 3412 reached a couple of weeks

These sort of numbers don't give cause for much confidence that the bottom has been reached ..... recent weekly increases only false hope I'm afraid

Watchlist getting longer though but patience needed

[peat]

Business Leader of the year isnt really commending any rush to get back in with these wise words from Page2 of the herald article today

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10546783&pnum=2



He expects the "series of seismic after-shocks" to continue and to be dealt with by governments which realise they have few options but to nationalise risk and loss in a way they would never have considered, even a short time ago.
"And in doing that they eventually stem the damage, but it leaves quite a distorted financial system in place which is very conservative, takes a long time to rebuild its balance sheets and recapitalise properly, and which has to get weaned off the public purse again." That will be a long and tedious process.
"So there will be some lost years in all this before we get back to trend rates of growth. We hope it is going to be a couple of years and not a lost decade like Japan's," Bollard said.

[Grimy]

I presume that has a lower IQ than one on a lean.

No, I'm sure the straight ones are brighter!

[Lizard]

Unfortunately, the links to Phaedrus' recent charts, including that which started this thread, have been broken. However, from the few indicators I can recall and find on freebie charts, it appears that next week has a possible chance of seeing the end of another caution period - especially if we follow Wall St up on Monday. The last two "buying permitted" periods might not have generated strong uptrends, but they did provide some good individual short term trades, run with tight stops.

Not that I'm any good at either TA or short-term trading, but am just paying homage to Phaedrus' charts that started this thread (and others before it)!

[fungus pudding]

No, I'm sure the straight ones are brighter!

They can be straight without being plumb.

[Billy Boy]

They can be straight without being plumb.
Yea but...
They were being offered at a 'BOB for each PLUMB' and were usually Hung.
:D
BB

[Nevl]

http://www.bloomberg.com/apps/news?pid=20601213&sid=anVFOwBD4e9Y&refer=home

Any Kiwi companies in this situation. Some good deals here and I am setting up a portfolio of these companies. Especially the healthcare ones.

Would be keen to know if any Kiwi Shares are cashed up and undervalued. I can't think of any.

[Nevl]

Novo Nordisk and Bank of NY Mellon looking nice for any upturn on that list.

[winner69]

ASX down nearly 7% this week to close at 3489 which isn't that far off the recent low weekly close of 3412 reached a couple of weeks

These sort of numbers don't give cause for much confidence that the bottom has been reached ..... recent weekly increases only false hope I'm afraid

Watchlist getting longer though but patience needed

On weekly numbers (elininates a lot of the daily noise) ASX200 up 0.6% this week to 3510.

So not much above the recent low of 3416 for the week 21 Nov

Is this a period of hanging around the 3500 mark for a while before it decides which way to go ..... although the chart is essentially trending down

ANother interesting week coming up but I fear a bad night in the US

[mistymountain]

Trading in the sharemarket is like pissing in the wind. At the moment all you posters are facing into it. Every so often the wind stops a bit. You all get excited and piss a bit harder. But the then the wind begins.

What I have realised after reading this site (for many years) and having a good think is this:

Right now the wind is blowing damn hard but the storm is still over those hills and its gonna roll into town soon.

You guys are out in the open with no coat.

This coming storm is a big one. Find some shelter don't encourage others to join you, protect those things that are precious coz not everything revolves around money.

[outspoken]

not everything revolves around money.

That comment is usually made by someone who doesn't have any money. Do you you have any evidence or links to back up your predictions of "NZX at 1200" & "unemployment at 20%" ?

[duncan macgregor]

OUTSPOKEN, Attack the idea not the person if you think that they are wrong otherwise it gets like kids having a go at each other in a kindergarten. The first rule is say what you think. The second rule is think about it before you say it. Even the village idiot is worth listening to on the odd occasion.
The market at this moment is in a very dangerous down cycle, trying to pick the bottom seperates the fools from the astute. My policy is if in doubt keep out, let the foolhardy take on the risk. I timed my exit with the commodoty charts, and will time my entry only when they show buy signals in one particular sector. The market has a higher risk of dropping than it has of rising at this moment. Thats my opinion my worth one way or the other is neither here nor there in a forum where a persons worth is purely speculation. Macdunk

[Phaedrus]

Nyet! The attached chart shows a range of fairly conservative indicators that have historically worked very well, triggering occasional "caution" periods. In every case the "caution" signal (magenta line) has been followed by a significant fall in the Index. Similarly, all the green "Go" signals have been followed by significant rises in the Index.

It is easy to see that none of these indicators are anywhere near signaling that it is time for conservative investors to re-enter the market.

http://h1.ripway.com/78963/NZSXlt1214.gif

During the year-long course of the current slide, there have been opportunities for "countertrend" trading. Any such trades are high risk and should only be attempted by those with the discipline to keep to a proven selling system. A "buy and hold" approach is inappropriate (and unprofitable!) during Bear markets. I will post a separate chart for those that have difficulty holding onto cash and want to trade NZ stocks more actively.

[Corporate]

Nice to see you back P. Great post thanks!

[Dr_Who]

Trading in the sharemarket is like pissing in the wind. At the moment all you posters are facing into it. Every so often the wind stops a bit. You all get excited and piss a bit harder. But the then the wind begins.

What I have realised after reading this site (for many years) and having a good think is this:

Right now the wind is blowing damn hard but the storm is still over those hills and its gonna roll into town soon.

You guys are out in the open with no coat.

This coming storm is a big one. Find some shelter don't encourage others to join you, protect those things that are precious coz not everything revolves around money.

Have you heard of short selling? *cough*

[macduffy]

Nice to see you back P. Great post thanks!

I'll second that!

The best news in a long time!

:)

[Jay]

I'll third that. :-)
Thanks for the update Phaedrus

[winner69]

This article is based on an analysis that the likes of Lizard comes up on the odd occassion .... and says that the the US markets have never been so cheap so expect the bottom soon

http://www.businessspectator.com.au/bs.nsf/Article/DJ-INVESTMENT-LETTERS-Model-Shows-Stks-To-Be-Very--M7JLN?OpenDocument&src=sph

[pietrade]

Nice to see you back P. Great post thanks!

---and I'm very happy to 4th it. Thanks P.

[duncan macgregor]

This article is based on an analysis that the likes of Lizard comes up on the odd occassion .... and says that the the US markets have never been so cheap so expect the bottom soon

http://www.businessspectator.com.au/bs.nsf/Article/DJ-INVESTMENT-LETTERS-Model-Shows-Stks-To-Be-Very--M7JLN?OpenDocument&src=sph
THERES A HOLE IN THE BOTTOM DEAR LIZA DEAR LIZA A HOLE. sorry guys i couldnt help myself. I know lizard wont mind a bit of fun. The american economy is stuck between a rock and a hard place. Save the Auto industry pouring billions of good money after bad or have millions out of work. Which ever way they go its downhill for sure. Macdunk

[Phaedrus]

This NZSX50 chart features faster, more sensitive indicators than those above, making it useful for short-term traders wanting to take advantage of the periodical rallies that feature in any downtrend. The active use of a proven exit strategy must be part of such an approach so it is not suitable for identifying entry points for long-term "buy and hold" investors.

These different indicators all show good agreement and it is easy to see that none are anywhere near signaling the "permission to buy" that this system requires before sanctioning any entry into new trades.

http://h1.ripway.com/78963/NZSX50mt1215.gif

Belg, I believe that both of your questions are covered in the post that began this thread.

[outspoken]

This article is based on an analysis that the likes of Lizard comes up on the odd occassion .... and says that the the US markets have never been so cheap so expect the bottom soon

http://www.businessspectator.com.au/bs.nsf/Article/DJ-INVESTMENT-LETTERS-Model-Shows-Stks-To-Be-Very--M7JLN?OpenDocument&src=sph

Hey, thanks for that link winner69. I subscribed to that site now and sorry to digress from the thread topic but I found this link there too which makes for very very interesting reading, quite plausible too. Scary.

http://www.businessspectator.com.au/bs.nsf/Article/A-tsunami-of-hope-or-terror-LHRJP?OpenDocument

[upside_umop]

Yet, interbank lending is still the lowest on record....

[fungus pudding]

The US Fed slashes i-rates to between 0 (yip zero!) and 0.25 percent !!!

Free money for everyone ... Problem is tho ... nobody wants to spend it ... That won't last for long ...



But there's a lot of talk of deflation in the U.S. That makes 0% or .25% to dear.

[Hoop]

But there's a lot of talk of deflation in the U.S. That makes 0% or .25% to dear.

The collapse of the US$ spells the end to deflation...this current drop in interest rates has triggered the market into correcting itself.

Commencing the next stage of the US economic cycle..

[upside_umop]

The prophecy of my avatar is coming true hoop.

<--------------------------------------------

But the question is...how low will it go? Rodgers reckons a wee way. He's the ultimate.

[Hoop]

The prophecy of my avatar is coming true hoop.

<--------------------------------------------

But the question is...how low will it go? Rodgers reckons a wee way. He's the ultimate.

Yes your avatar is spot on:D:D
Forex thread may have a tech answer....posters there have noticed US$ weakness since last week.

[KiwiBear]

I've allways wondered why the US dollar has remained so high for so long with the Bush admin and now the Fed printing so much paper.
Yes may be cheaper than loo rolls soon! Try this thread for insight of things to come in 09
http://video.google.com/videoplay?docid=1954933468700958565&hl=es

[Dr_Who]

Have you guys seen the movie "Dumb and Dumber"? These geezers found $1 million, went on a spending spree and replaced the cash with "IOUs". Very funny movie. Funny enough it was an American movie made in America.

[fungus pudding]

I've allways wondered why the US dollar has remained so high for so long with the Bush admin and now the Fed printing so much paper.
Yes may be cheaper than loo rolls soon! Try this thread for insight of things to come in 09
http://video.google.com/videoplay?docid=1954933468700958565&hl=es

Things to come .....If you believe it .

[srowe]

Things to come .....If you believe it .

So if this is true I guess the big question is what does that mean for the little ole Kiwi dollar?

would it be worth heaps more?...the same?...or get sucked down the gurgler with other currenceys,only to re-emerge in the form of a similar austral asia-o!!

[Footsie]

kiwibear

That video... the guy is a nutter. that coin could have been made anywhere. and its impossible to read.

The worst case is that the FED creates hyperinflation, thereby making their USD debts worth nothing.


I get sick of doomsday people like that...........why doesnt he just go and start a cult and then commit suicide the day before all this is supposed to happen

[craic]

And TEL continue to pay over 10% div and the letter with the latest div seems to say that this will continue in the immediate future? Am I missing something? - Are the major Aus banks with 150 million plus shares in TEL each blind or just happy to be raking in the Kiwi sheckels that the locals are ignoring? I know that DMc hates telecom with the same witless reasoning that my fox terrier hates cars but I can't work this one out. This is coming to you compliments of Xtra and my Xmas turkey is paid for from the same source as is my Sky Digital, my phone and answerphone.

[winner69]

On weekly numbers (elininates a lot of the daily noise) ASX200 up 0.6% this week to 3510.

So not much above the recent low of 3416 for the week 21 Nov

Is this a period of hanging around the 3500 mark for a while before it decides which way to go ..... although the chart is essentially trending down

ANother interesting week coming up but I fear a bad night in the US

A good week with ASX200 up 3% to 3616 .... now positive for the last 2 weeks and maybe an uptrend (aalbeit a shallow one) is starting.

We don't want to see a weekly close below the 3616 and would like to see a weekly close above 3742 to be convinced that maybe the bottom has been reached and times are lookng more positive (at least in Australia)

if only the banks would be more honest ......

[Lizard]

This NZSX50 chart features faster, more sensitive indicators than those above, making it useful for short-term traders wanting to take advantage of the periodical rallies that feature in any downtrend...
These different indicators all show good agreement and it is easy to see that none are anywhere near signaling the "permission to buy" that this system requires before sanctioning any entry into new trades.

http://h1.ripway.com/78963/NZSX50mt1215.gif


Looks like the first trigger or two might have fired and a few more will fall if we can start the year on a strong day. Given the end of month move often carries over in the the first week of the next month, then it seems a strong chance that we might be "good to trade" on the short term chart. Sort of "on your marks" moment?

[scamper]

Hey liz -- happy new year!
don't want to be too gloomy but ...
i thought that the movements at the end of a quarter were meaningless manipulations by people who are responsible for other people's money...
the volume was only $57 m and the increase 1.4% for the day. without doing any number-crunching, the rise seems within the envelop for volatility over the last 6 months, and the volume is nothing flash.
sooo, i'm not getting my hopes up.
however, i do recall that we have had some surprisingly good januaries in the past. here's hoping. cheers.

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10539519

Capitulation?

Pundits are now saying that after capitulation a period (sometimes for quite a while) 'disinterest' follows

Everybody has lost money and not many remain interested .... no buyers no real market gains

Judging from the recent low turnovers on the NZX maybe that is where we are belg eh ..... just a few like you accumulating .... everybiody else given up and following guru Gibbs advice and putting their cash into corporate bonds (like GPG ones .... must be considering some another issue)

[lakedaemonian]

W69, True. It could all go sideways from here. But then with i-rates so low and by year end, all the bad news (profit warnings, capital raisings, etc.) out, and yeilds stable but a new (lower) level but still higher than i-rates, I'd doubt it. It'll go up - but I'm not expecting anything huge. Just a slow, steady grind upwards as demand increases and things get back to 'normal'. I can wait. ;)

I would still have to almost completely disagree.

In many respects, we are lagging the US/UK in this recession.

I'm of the belief that while we have completed the 1st or 2nd leg of this downward spiral....we haven't completed the last....I think we still have a few more to go.

Unemployment is only going one way from here....UP (in my opinion).

Consumer spending is only going one way from here......DOWN (in my opinion).

Based on a multiple of the average wage formula residential real estate is only going one way from here.......DOWN (in my opinion).

Commercial property is lagging residential property by 12-18 months and is only going one way from here.....DOWN (in my opinion).

Dairy led exports will continue to get hammered this year and into next.

While I agree in some respects that NZ has far more interest rate "dry powder" that our US/UK peers......I think Iceland's problems are worth watching very closely. NZ could be dropped like a hot potato in such a fragile environment.

For me it's still the same...watch and wait patiently as I think the descending spiral.....while slowing, shows no signs of actually stopping. I think it's still too much of an investment gamble to jump in now....the Obama "halo bubble" will burst too.

I like silver at these levels, gold looks OK, Oil below $40 is looking good, at $30 it was(and may be again) a gift, but cash is still king...my favorite is the Looney.

[lakedaemonian]

NZ50 currently at 2,771. Want'a bet it's higher at 1st Jan 2010?

Real or nominal? ;)

I'm not a gambler....and making a wager based on two data is just that......but what the heck, I'll take that bet.

My guess for the NZX for 2009 is:

A year of trading sideways, but a bias lower rather than higher as earnings, P/E multiples, and dividends come under further pressure.

I'm guessing the NZX ends down another 5-15%, with smaller "dead cat bounces" than US markets.

One thing I'm unsure of is how will quickly accumulating Kiwisaver funds be deployed?

Long-term I think Kiwisaver and increasing reliance on self-funded retirement is net positive for the NZX...but in the short-to-medium term I'm still negative NZX......but I think I will be enrolling in Kiwisaver for my "free" money later this year, or possibly 2010 at the latest.

Just my 0.02c

[peat]

Everything I'm reading suggests another crunch to the downside this year and then, only then, will it be the time to buy for a large corrective move upwards. Mid year sometime?

[Phaedrus]

Currently we are again in a "buying permitted" period and this system continues to work very well. See how the market has climbed after each green line "permission to buy" signal, flagging the possibility of profitably entering into shorter term trades even though the overall trend is down. Much more importantly, though, see how after the start of every "Caution" period (vertical magenta line) the market has dropped considerably. A good time for caution - indeed, a good time to be out of the market altogether.

Remember that this is a reasonably active system best suited to more active market participants. I will post another chart for more conservative investors in a separate thread.

http://h1.ripway.com/78963/NZSX50buyMT.gif

[Dr_Who]

Dow going below the 8k support level.

It the US market closes below 8k, it is game over with blood on the floors.

[Dr_Who]

The NZ market is holding up very well.

Maybe the market is expecting a huge rates cut next week?

[peat]

Appears as though someone was able to clean up the blood overnight

might take more than a few cotton buds


http://blogs.suntimes.com/scanners/shinblood.jpg

[Dr_Who]

China’s Economy Grows 6.8%, Slowest Pace in 7 Years

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEH.W349kSsw&refer=home

[Sumnerned]

Maybe I'm just a slow learner, but I just don't understand where most of the expert commentators on the current crisis are coming from.

A year or so ago my sister and I started to argue about whether it made sense to stay invested in the markets. She, yes, me, no. Her argument was straightforward, all these organisations, sovereign funds, pension funds etc etc, have to put their money somewhere, and within a few (she suggested three) years, it would be the stock markets again. I didn't really have a counter to this, just a strong gut feeling that something was wrong.

I wasn't a complete ignoramus; I remember trying to explain the problems of CDO's etc to friends in mid 2007, and looking at those 'Fraudulent Banking' series on YouTube in early 2008, but the enormity of the potential impact of troubled assets combined with leverage didn't really strike home.

As of mid 2008 my sister and I both still assumed that what banks lent was equal to what savers had deposited. What naïve folks we were!

Is this how it worked for a typical bank in the Anglophone world?

1 Each dollar deposited in the bank was used to purchase some asset, which would soon have an inflated price, due to high interest or whatever, for example CDO's.

2 For each dollar deposited, some multiple, maybe up to 10 dollars, was lent out. (The Youtube videos suggest a ratio of 8 or 9 to 1.)

So, let's say a typical bank is leveraged only 2 to 1, and has 70% of its assets in Structured Investment Vehicles like CDO's. What happens when the stuff hits the fan as in late 2008?

Well, first up, leverage becomes a dirty word, so the bank feels it has a responsibility to get the loan to asset ratio down to 1:1. But unfortunately the assets have shrunk in the meantime, to perhaps 40c per nominal (previous) dollar.

This means that for every dollar of loan, the bank has to reduce this to 50c (leverage reduction) and then 20c (asset reduction). Somehow the bank has to reduce its loan portfolio to 20% of the previous amount. Incidentally, from the bank's viewpoint, there is no advantage in them publishing this fact, so they don't.

OK, we all know that there are a few charmingly old-fashioned folks who stay outside this fancy banking system, but I suspect they aren't many.

So where's the money coming from to restart the global economy? Not from any bank I know of. But the experts keep saying it's next month, or next quarter, or next year. Me, I'm looking forward to the next debate with sis.

Cheers

[The Doctor]

..print more!

[digger]

..print more!

That is right doc,and after that we have "small" burst of inflation to even out the money against the items it can buy. Simple
Digger

[Dr_Who]

Use US as an example. The Fed will print more money and issue it as debt to foreigners who have cash like China, Arab, Jap, Swiss etc. It is in the best interest like China to support their largest customer, the US. China current holds over US$1 trillion of US debt.

The biggest problem with the US is that the rot may not have finished. We dont know what other surprises may pop up and the fed may have to print more money to bail them out. IT is estimated that the US debt may reach around $15 trillion in a couple of years. How are they gonna pay this back?

[Nitaa]

Use US as an example. The Fed will print more money and issue it as debt to foreigners who have cash like China, Arab, Jap, Swiss etc. It is in the best interest like China to support their largest customer, the US. China current holds over US$1 trillion of US debt.

The biggest problem with the US is that the rot may not have finished. We dont know what other surprises may pop up and the fed may have to print more money to bail them out. IT is estimated that the US debt may reach around $15 trillion in a couple of years. How are they gonna pay this back?
Thats only about $45000 per person (i think) Heck doc yopu probably earn that in less than a month

[Sumnerned]

It is estimated the US will have to issue $6trillion of new debt bills this year, $4trillion on maturing, which presumably they are hoping will just be rolled over, and $2trillion additional debt.

On the matter of printing money, with its attendant inflationary impact as noted by Digger, it's also not so obvious what to do with it.

The state could buy the troubled bank assets, as originally envisaged by TARP, but this easily pisses the taxpayers off.

So perhaps a capital injection, which seems to be the preferred approach at present. The trouble is, capital to loan ratios have become so low that even if the capital is more than doubled, and the state becomes the majority shareholder, not much of a dent has been made in the overall problem.

So does the state try to improve the value of the troubled assets? That's probably next. The state says to all the unemployed mortgagors 'Don't worry, be happy. We're gonna pay your mortgage interest for the next few years.' Well that should be fun.

[Dr_Who]

Reading the NZX SSH is like reading something the dog dragged in. Why cant the NZX get their act together and put out something we can read??!!! If the NZX cant get something simple like the SSH announcement right, what hope are there they can get the NZX to grow?

[Joshuatree]

Lest we forget


"It makes one think about the "usefulness" of the NZSX50 as an index for describing market direction" (Arbitrage)
"Right now, we should probably be talking about the Dow" (Lizard)
"anyone trading in the NZX would be very foolish to ignore the DOW" (MacDunk)
"when to reenter the market has everything to do with how the major indices are faring" (Ratkin)
"Mackdunk is right..". (Schrewd Crude)
"To ignore ... overseas trends in markets.... is very short sighted" (MacDunk)
etc etc.

There is a rare degree of consensus here - though it is a little ironic that I stand accused of paying too little attention to the Dow. I'll wager that I study it more closely than any of you! I have to. I trade there.

I will have one last shot at trying to explain why I think you are all wrong and why I think that, when using the NZSX50 index to make decisions about the NZ market, you need not factor in other indices such as the Dow. What's more, you should not!

Let's say that the NZX was more or less flat for an entire week and one of you lot turned to the Dow for another perspective. You see that the Dow has been DOWN for 5 straight days......

Case (1) You do not realise that the NZSX50 index already incorporates all Dow influence and so you reference it yourself. You see the sustained fall and say "Wow, the Dow is looking very weak - we tend to follow it so I am pessimistic about the NZ market." You would be Bearish and looking to sell.

Case (2) You are fully cognisant of the fact that the NZSX50 Index already includes all Dow influence, but you see that the Dow has had a very bad week. You say "Look at how well the little NZ market has stood up against the influence of the Dow! They had a really bad week and we didn't move! Think what will happen here when/if the Dow goes up! This makes me optimistic about the NZ market." You would be Bullish and looking to buy.

Case (3) (Me) I know that NZ indices already incorporate all Dow influence (indeed, ALL influences) so I am quite happy to judge the NZ market as a whole by the NZSX50 alone. I observe that it is tracking sideways and see this as a consolidation zone - a time to do nothing. A time to wait and see whether the coming break will be up or down. Not pessimistic. Not optimistic. Not Bullish. Not Bearish.

The basic premise on which Dow theory is built is that the index discounts everything.

Understand that concept and you will understand my argument.

[Vaygor1]

Crickey JT. You reviving a thread that fell into the abyss 9 years ago??

My view (regarding the thread topic) is one does not need to worry about re-entering the market if one does not get out in the 1st place.

[Biscuit]

Yeah, funny time to revive this thread! What's the point? Also, is it any longer true that "the index discounts everything"? or is it now just a case of buy the index because it is seen as a one-way bet when interest rates are on the floor and central banks are printing money?

[Joshuatree]

I remember the GFC well; watching the indexes plunge, HORRIBLE :eek2: Good to remind myself and anyone who cares to keep their feet on the ground , on such a bullish day. Who knows when a black swan etc event will appear .

[peat]

Yeah, funny time to revive this thread! What's the point? Also, is it any longer true that "the index discounts everything"? or is it now just a case of buy the index because it is seen as a one-way bet when interest rates are on the floor and central banks are printing money?

A thread like this being revived acts a a counter to complacency. at JT says.
If you believed that the index discounts everything back then, its likely you would still believe it. Its a pretty valid viewpoint in my opinion. But perhaps not that useful either.

[Schrodinger]

Dow will hit 30k with tax reform (25%) uplift.

[macduffy]

Dow will hit 30k with tax reform (25%) uplift.

Memo to self:

Must remember to ask my next Uber driver for a stock tip.

;)