Bear rally or onwards and upwards? (poll)

[ratkin]

With many commentators becoming more bullish , what are your opinions?

[ratkin]

My own view is that the selloff was largely manipulated to shake the highly leveraged out of the tree.
It certainly did that with many of the margin boys being wiped out.

Those who held and bought more during the correction will be the long term winners , chartists will also have done well. Big losers those who used borrowed money.

Markets much safer place now imo.

[Dr_Who]

I have a different view. I think the American economy is stuffed with way too much debt, low growth, high inflation and will take many years to recover. The war in Iraq will drain their cash and they will require to borrow and print more cash to finance the hollywood lifestyle.

The global economy will move along nicely with the assistance of China and India. USA is like Japan in the 80s and will lag behind the rest of the world.

High growth in China and India will continue to put upward pressure on commodities and oil. Peak oil is here to stay.

[The Big Ease]

i think we are due for a massive sell-off.
the key IMO is to look at what started this in the first place. its the subprime loans!
we are only halfway through the peak months of sub-prime resets and in the midst of a property downturn (well underway in the US and just beginning here in the UK)

many of these borrowers are looking at 2-3% hikes in their interest rates. theyre going to capitulate.
it takes 3-6 months before a loan typically defaults after reset (according to alan kohler), so i reckon we will begin seeing another round of sell-offs between july-oct, when this feeds into the banking system and further write-offs are announced by the banks.

if the major banks around the world beg for 300B in capital to shore up their balance sheets, yet we are only part way through the resetting of loans that have caused the problem to begin with, i cant understand the rationale that says this thing is over.

[mark100]

I'd say the US is definitely in a bear market rally. Although its not even technically in a bear market at present.

For that reason I'd say the Aust market will pull back with the US at some stage although I'm now expecting the low 5000 area to hold for Aust unless the RBA decides to punish with further multiple rate hikes (which I think is unlikely)

[Lizard]

I found that hard to vote on between 2 and 3.

Firstly, alot of money that has gone out of the market is not about to reappear any time soon - some went to repay loans (which will now be more difficult to get) and some will be quite happy with higher interest deposits and bonds.

Secondly, we are seeing the first evidence and rumours of hits to the real economy which will be reflected in the next round of forecasts. May is the month of company updates to forecasts and the sell-offs will probably be more savage than the buy-ups (see ELX yesterday, RCR earlier in the week).

However, I also expect there to be opportunities as the money re-entering the market takes a fresh look for stocks and picks on some that have been out of favour and/or undervalued rather than sticking with previous popular choices.

I think the stage we are in (and probably close to finishing) is a rewarding bounce. After that I see choppy sideways at a higher level than the low but which may (or may not) eventually finish with a move to a new low. During the choppy sideways I expect there to be quite alot of opportunities in selected stocks as the market bounces like a sieve and separates wheat from chaff. I wouldn't want to call the end stages yet. I'm not sure if we saw the ultimate low or not, but I don't really expect a full-blown bull market for at least another 9 months.

However, I'm not going to let my long term view of things influence my trading too much and will just stick to plan, keep portfolio fairly balanced and take advantage of the opportunities as I see them.

[Lizard]

Btw, I was interested to see the results of this poll earlier in the week:
Bear or Bull? (http://www.investmentpostcards.com/2008/04/25/poll-of-the-week-stock-markets-–-which-way-jose/)

Maybe it's just the people who read this guy's blog, but I was amazed at how low most expect the Dow to go by year end (yet many were expecting more short term up).

[AMR]

The US will inflate their way out of this mess. I'm expecting all that extra money to go into commodities such as oil and gold. Technically we've had a close above the 12800 mark which is a bullish sign usually, although I'm actually more keen to short the Dow since it might be a false breakout.

[Hoop]

I've voted that the market will reach lower lows. After all we are still in a bear market phase and bears downtrend...

This phase change from Bull to Bear is following the script perfectly.. passed down from previous historical Bull/bear periods.

From analysing past history the near term future broad outlook is not good as all previous changes in market phases follows the same path..history repeats itself to the point that it is nearly (if not) identical.

The young people don't learn history and the older people forget....hence when the present event happens nearly everyone thinks that this time it is unique and methods used to combat it are unique...this belief is a lie.
FEDs rapid interest rate cuts (used here as an example) is portrayed as something different ...its bullsh1t ...it has been done many times before.

If you have time read from to beginning through to the end the investing strategies and the secular bear markets (http://www.sharetrader.co.nz/showthread.php?t=5171&page=8)...this thread has information links showing history and the similarities then and now. Note one of the last entries showed a link to Jeff Cooper 10 April 2008 article predicting a major rally breakout was eminent.

At the moment the hard part is whether you believe the markets are in a phase change or a large prolonged correction in the still existing Bull Market Phase. From history, all the signals and trends (behavioural) are showing it is a Bear and to err on the side of caution is the best strategy.

[STRAT]

Its a hard call still and most of us are not qualified to make it. I sure aint but I recon this fine weather we are having is good for another month tops.:(

The vote was a toss up between the last two

[Tok3n]

Range bound with a down-side bias.

Fed only has 2% left to play with now, RBA has more :)

I hope the mother of all depression hits NZ though, sick of hearing NZ people telling me how much their properties are worth and that trading shares, commodities and FX etc is a waste of time vs the property "which never goes down".

[macduffy]

I voted 3. I reckon there are still a few more bad apples to be shaken out of the tree, more sub-prime related pain.
That doesn't mean to say that there won't be buying opportunites around but they will take more than the usual care to select.

;)

[Dr_Who]

I hope the mother of all depression hits NZ though, sick of hearing NZ people telling me how much their properties are worth and that trading shares, commodities and FX etc is a waste of time vs the property "which never goes down".

I sold most of my property portfolio about 1-2 years back when I started hearing the Taxi drivers, hair dressers and all my friends talked about how much they are worth and how many investment properties they have. I recall my friends laughing at me for selling my properties too soon. The writing was on the wall, esp when one have been through 1987.

There will be more pain to come for the US. In NZ there will be more pain and blood for the property market, it aint over yet. I have a feeling this time round, the downturn will last longer than other cycles.

The money to be made is in commodities, primary sector and oil. Watch those retail stocks get hammered further with the next round of profit reporting.

Dollar Collapse - The Schiff Has Hit The Fan - End Game 2012
http://www.youtube.com/watch?v=T1_Yo2BGdUk&feature=related

[COLIN]

I have read all the above comments with much interest (after I had voted, because I didn't want to be influenced by the erudition of you esteemed contributors.) However, I feel comfortable with my bullish vote, having regard to the way that the options are worded. If I was asked to write my own preferred option it would be along the lines of: "We have turned the corner and, although there could be some unnerving choppiness over the next month or two, there will be a steady and pronounced overall upward trend". (I guess that lies somewhere between the first and second option.)
There are many reasons for my optimistic stance, but for the moment I just want to draw your attention to the following two very important factors which I believe are highly relevant and don't appear to have been raised yet:

(a) P/E ratios on global markets are now the lowest they have been since 1990.
(b) The sharemarket always pre-dates the "real" world - by many months.

I believe it is not the time for serious sharemarket investors to be sitting idly on the station. You could well miss the train, and it may not be a slow one either. And as our good friend Phaedrus has pointed out, on another thread, great opportunities abound. Food, fuel, healthcare...............the world needs them all.

(The NZ property market is quite another issue. There is a lot more pain to be experienced there, yet, and it appears that many sellers are still resisting the realitities of the market by holding out for inflated prices. Sooner or later they are going to have to face these realities. And the number of mortgagee sales will increase.
But the issue we are considering on this thread is the likely trend of global sharemarkets.)

[tommy]

I voted "More corrections , choppy markets , maybe downward tendancy" but would be quite happy to be proven wrong.

I think some sectors within the market will outperform the general market index, such as the agri sector including fertilizers and supply-side services.

I am surprised how weak gold has been lately... do people really believe financial sector stability has been restored? With the FED literally printing heaps of money to avoid a recession, and with very little room left to slash interest rates (can't go below zero, you know), inflationary forces building plus a weaker US dollar would seem to indicate that gold might not be a bad place to store wealth. Yet, the market is telling us that contrary is the case... mmm am I missing something??

As the All Ords has far from decoupled from the DOW, I think any jitters in the US economy will scare investors in OZ land and thus easily turn sentiment around overnight. All Ords has been trading within a narrow band (5400-5750) over the past month, clearly indicating that no directionality has been determined yet.

http://asx.netquote.com.au/charts.asp?code=xao&x=0&y=0

[macduffy]

I see that Warren Buffett says that " the worst of the crisis on Wall St is over".
For some reason, this reminded me of George W Bush's famous declaration about the end of the war in Iraq, which is very unfair as I have the highest regard for WarrenB !

;)

[STRAT]

Anyone else wondering when the action of the last week is going to hit the ceiling with a big SPLAT?? What an awsome couple of days though:D

[Footsie]

Colin where is your data to say stocks are cheapest since 1990 when S&P500 p/e ratio is 22 or 23x

[ratkin]

Just found this old gem of a thread. started after the markets fell from 7000 to 5,500

Little did most of us know that it was about to go down to nearly as low as 3,000
15% picked the right option at least . Congrats if you were one
Me being a half full kind of guy , got it all wrong as usual , but alls well that ends well

[winner69]

Not many still posting ...maybe most wiped out and no longer interested in the market cos it all to hard .....has bellies capitulation been yet?

[STRAT]

Not many still posting ...maybe most wiped out and no longer interested in the market cos it all to hard .....has bellies capitulation been yet?Im still here big W:D

This is my fav bit from this thread :p
May 08 "I see that Warren Buffett says that " the worst of the crisis on Wall St is over".

[trackers]

^ haha just goes to show ey!

[skid]

Considering the fundamentals,many feel shares are overvalued ATM

[soulman]

Not many still posting ...maybe most wiped out and no longer interested in the market cos it all to hard .....has bellies capitulation been yet?

I am still here too....nearly wiped out because I used debt (margin lending) and I was purportedly an amateur and stubborn investor back then. Any person that lost plenty with Allco, MFS and Babcock and Brown would have quit forever but I knew the mistakes I made and re-hash my strategies.

Now, stronger than ever, only using cash and have set trading strategies......

Improvement comes from a seminar with Safety With The Market, a Marcus Padley book, Dale Gillham wisdom on Wealth Within and Colin Nicholson trading psychology articles.

Don't forget Phaedrus articles on the 12 Stockmarket Rules.

Right now.....who knows what would happen. The div yield on blue chip stocks should support Australian market due to declining interest rates.

[macduffy]

Re Strat's graph today.

Makes a nice point but we also need to note that it stops at early 2009.

S&P 500 closed at 1428.59 last night, around the point where WB made his statement.

:cool:

[STRAT]

Re Strat's graph today.

Makes a nice point but we also need to note that it stops at early 2009.

S&P 500 closed at 1428.59 last night, around the point where WB made his statement.

:cool:Thanks Mac
I used the date of your post. No exactly a scientific approach. I do admit.

[STRAT]

Don't forget Phaedrus articles on the 12 Stockmarket Rules.

and on that note.....

The “Not-So-Simple” (But Really Utterly So) Rules of Trading
The world of investing/treading, even at the very highest levels, where we are supposed to believe that wisdom prevails and profits abound, is littered with the wreckage of wealth that has hit the various myriad rocks that exist just beneath the tranquil surface of the global economy. It matters not what level of supposed wisdom, or education, that the money managers or individuals in question have. We can make a list of wondrously large financial failures that have come to flounder upon these rocks for the very same reasons. Let us, for a bit, have a moment of collective silence for Long Term Capital Management; for Baring’s Brothers; for Sumitomo Copper… and for the tens of thousands of individuals each year who follow their lead into financial oblivion.
I’ve been in the business of trading since the early 1970s as a bank trader, as a member of the Chicago Board of Trade, as a private investor, and as the writer of The Gartman Letter, a daily newsletter I’ve been producing for primarily institutional clientele since the middle 1980s. I’ve survived, but often just barely. I’ve made preposterous errors of judgment. I’ve made wondrously insightful “plays.” I’ve understood, from time to time, basis economic fundamentals that should drive prices–and then don’t. I’ve misunderstood other economic fundamentals that, in retrospect, were 180 degrees out of logic and yet prevailed profitably. I’ve prospered; I’ve almost failed utterly. I’ve won, I’ve lost, and I’ve broken even.
As I get older, and in my mid-50s, having seen so much of the game–for a game it is, with bad players who get lucky; great players who get unlucky; mediocre players who find their slot in the lineup and produce nice, steady results over long periods of time; “streak-y” players who score big for a while and lose big at other times–I have distilled what it is that we do to survive into a series of “Not-So-Simple” Rules of Trading that I try my best to live by every day … every week … every month. When I do stand by my rules, I prosper; when I don’t, I don’t. I am convinced that had Long Term Capital Management not listened to its myriad Nobel Laureates in Economics and had instead followed these rules, it would not only still be extant, it would be enormously larger, preposterously profitable and an example to everyone. I am convinced that had Nick Leeson and Barings Brothers adhered to these rules, Barings too would be alive and functioning. Perhaps the same might even be said for Mr. Hamanaka and Sumitomo Copper.
Now, onto the Rules:
NEVER ADD TO A LOSING POSITION
R U L E # 1
Never, ever, under any circumstance, should one add to a losing position … not EVER!
Averaging down into a losing trade is the only thing that will assuredly take you out of the investment business. This is what took LTCM out. This is what took Barings Brothers out; this is what took Sumitomo Copper out, and this is what takes most losing investors out. The only thing that can happen to you when you average down into a long position (or up into a short position) is that your net worth must decline. Oh, it may turn around eventually and your decision to average down may be proven fortuitous, but for every example of fortune shining we can give an example of fortune turning bleak and deadly.
By contrast, if you buy a stock or a commodity or a currency at progressively higher prices, the only thing that can happen to your net worth is that it shall rise. Eventually, all prices tumble. Eventually, the last position you buy, at progressively higher prices, shall prove to be a loser, and it is at that point that you will have to exit your position. However, as long as you buy at higher prices, the market is telling you that you are correct in your analysis and you should continue to trade accordingly.
R U L E # 2
Never, ever, under any circumstance, should one add to a losing position … not EVER!
We trust our point is made. If “location, location, location” are the first three rules of investing in real estate, then the first two rules of trading equities, debt, commodities, currencies, and so on are these: never add to a losing position.
INVEST ON THE SIDE THAT IS WINNING
R U L E # 3
Learn to trade like a mercenary guerrilla.
The great Jesse Livermore once said that it is not our duty to trade upon the bullish side, nor the bearish side, but upon the winning side. This is brilliance of the first order. We must indeed learn to fight/invest on the winning side, and we must be willing to change sides immediately when one side has gained the upper hand.
Once, when Lord Keynes was appearing at a conference he had spoken to the year previous, at which he had suggested an investment in a particular stock that he was now suggesting should be shorted, a gentleman in the audience took him to task for having changed his view. This gentleman wondered how it was possible that Lord Keynes could shift in this manner and thought that Keynes was a charlatan for having changed his opinion. Lord Keynes responded in a wonderfully prescient manner when he said, “Sir, the facts have changed regarding this company, and when the facts change, I change. What do you do, Sir?” Lord Keynes understood the rationality of trading as a mercenary guerrilla, choosing to invest/fight upon the winning side. When the facts change, we must change. It is illogical to do otherwise.
DON’T HOLD ON TO LOSING POSITIONS
R U L E # 4
Capital is in two varieties: Mental and Real, and, of the two, the mental capital is the most important.
Holding on to losing positions costs real capital as one’s account balance is depleted, but it can exhaust one’s mental capital even more seriously as one holds to the losing trade, becoming more and more fearful with each passing minute, day and week, avoiding potentially profitable trades while one nurtures the losing position.
GO WHERE THE STRENGTH IS
R U L E # 5
The objective of what we are after is not to buy low and to sell high, but to buy high and to sell higher, or to sell short low and to buy lower.
We can never know what price is really “low,” nor what price is really “high.” We can, however, have a modest chance at knowing what the trend is and acting on that trend. We can buy higher and we can sell higher still if the trend is up. Conversely, we can sell short at low prices and we can cover at lower prices if the trend is still down. However, we’ve no idea how high high is, nor how low low is.
Nortel went from approximately the split-adjusted price of $1 share back in the early 1980s, to just under $90/share in early 2000 and back to near $1 share by 2002 (where it has hovered ever since). On the way up, it looked expensive at $20, at $30, at $70, and at $85, and on the way down it may have looked inexpensive at $70, and $30, and $20–and even at $10 and $5. The lesson here is that we really cannot tell what is high and/or what is low, but when the trend becomes established, it can run far farther than the most optimistic or most pessimistic among us can foresee.
R U L E # 6
Sell markets that show the greatest weakness; buy markets that show the greatest strength.
Metaphorically, when bearish we need to throw our rocks into the wettest paper sack for it will break the most readily, while in bull markets we need to ride the strongest wind for it shall carry us farther than others.
Those in the women’s apparel business understand this rule better than others, for when they carry an inventory of various dresses and designers they watch which designer’s work moves off the shelf most readily and which do not. They instinctively mark down the work of those designers who sell poorly, recovering what capital then can as swiftly as they can, and use that capital to buy more works by the successful designer. To do otherwise is counterintuitive. They instinctively buy the “strongest” designers and sell the “weakest.” Investors in stocks all too often and by contrast, watch their portfolio shift over time and sell out the best stocks, often deploying this capital into the shares that have lagged. They are, in essence, selling the best designers while buying more of the worst. A clothing shop owner would never do this; stock investors do it all the time and think they are wise for doing so!
MAKING “LOGICAL” PLAYS IS COSTLY
R U L E # 7
In a Bull Market we can only be long or neutral; in a bear market we can only be bearish or neutral.
Rule 6 addresses what might seem like a logical play: selling out of a long position after a sharp rush higher or covering a short position after a sharp break lower–and then trying to play the market from the other direction, hoping to profit from the supposedly inevitable correction, only to see the market continue on in the original direction that we had gotten ourselves exposed to. At this point, we are not only losing real capital, we are losing mental capital at an explosive rate, and we are bound to make more and more errors of judgment along the way.
Actually, in a bull market we can be neutral, modestly long, or aggressively long–getting into the last position after a protracted bull run into which we’ve added to our winning position all along the way. Conversely, in a bear market we can be neutral, modestly short, or aggressively short, but never, ever can we–or should we–be the opposite way even so slightly.
Many years ago I was standing on the top step of the CBOT bond-trading pit with an old friend Bradley Rotter, looking down into the tumult below in awe. When asked what he thought, Brad replied, “I’m flat … and I’m nervous.” That, we think, says it all…that the markets are often so terrifying that no position is a position of consequence.
R U L E # 8
“Markets can remain illogical far longer than you or I can remain solvent.”
I understand that it was Lord Keynes who said this first, but the first time I heard it was one morning many years ago when talking with a very good friend, and mentor, Dr. A. Gary Shilling, as he worried over a position in U.S. debt that was going against him and seemed to go against the most obvious economic fundamentals at the time. Worried about his losing position and obviously dismayed by it, Gary said over the phone, “Dennis, the markets are illogical at times, and they can remain illogical far longer than you or I can remain solvent.” The University of Chicago “boys” have argued for decades that the markets are rational, but we in the markets every day know otherwise. We must learn to accept that irrationality, deal with it, and move on. There is not much else one can say. (Dr. Shilling’s position shortly thereafter proved to have been wise and profitable, but not before further “mental” capital was expended.)
R U L E # 9
Trading runs in cycles; some are good, some are bad, and there is nothing we can do about that other than accept it and act accordingly.
The academics will never understand this, but those of us who trade for a living know that there are times when every trade we make (even the errors) is profitable and there is nothing we can do to change that. Conversely, there are times that no matter what we do–no matter how wise and considered are our insights; no matter how sophisticated our analysis–our trades will surrender nothing other than losses. Thus, when things are going well, trade often, trade large, and try to maximize the good fortune that is being bestowed upon you. However, when trading poorly, trade infrequently, trade very small, and continue to get steadily smaller until the winds have changed and the trading “gods” have chosen to smile upon you once again. The latter usually happens when we begin following the rules of trading again. Funny how that happens!
THINK LIKE A FUNDAMENTALIST; TRADE LIKE A TECHNICIAN
R U L E # 10
To trade/invest successfully, think like a fundamentalist; trade like a technician.
It is obviously imperative that we understand the economic fundamentals that will drive a market higher or lower, but we must understand the technicals as well. When we do, then and only then can we, or should we, trade. If the market fundamentals as we understand them are bullish and the trend is down, it is illogical to buy; conversely, if the fundamentals as we understand them are bearish but the market’s trend is up, it is illogical to sell that market short. Ah, but if we understand the market’s fundamentals to be bullish and if the trend is up, it is even more illogical not to trade bullishly.
R U L E # 11
Keep your technical systems simple.
Over the years we have listened to inordinately bright young men and women explain the most complicated and clearly sophisticated trading systems. These are systems that they have labored over; nurtured; expended huge sums of money and time upon, but our history has shown that they rarely make money for those employing them. Complexity breeds confusion; simplicity breeds an ability to make decisions swiftly, and to admit error when wrong. Simplicity breeds elegance.
The greatest traders/investors we’ve had the honor to know over the years continue to employ the simplest trading schemes. They draw simple trend lines, they see and act on simple technical signals, they react swiftly, and they attribute it to their knowledge gained over the years that complexity is the home of the young and untested.
UNDERSTAND THE ENVIRONMENT
R U L E # 12
In trading/investing, an understanding of mass psychology is often more important than an understanding of economics.
Markets are, as we like to say, the sum total of the wisdom and stupidity of all who trade in them, and they are collectively given over to the most basic components of the collective psychology. The dot-com bubble was indeed a bubble, but it grew from a small group to a larger group to the largest group, collectively fed by mass mania, until it ended. The economists among us missed the bull-run entirely, but that proves only that markets can indeed remain irrational, and that economic fundamentals may eventually hold the day but in the interim, psychology holds the moment.
And finally the most important rule of all:
THE RULE THAT SUMS UP THE REST
R U L E # 13
Do more of that which is working and do less of that which is not.
This is a simple rule in writing; this is a difficult rule to act upon. However, it synthesizes all the modest wisdom we’ve accumulated over thirty years of watching and trading in markets. Adding to a winning trade while cutting back on losing trades is the one true rule that holds–and it holds in life as well as in trading/investing.
If you would go to the golf course to play a tournament and find at the practice tee that you are hitting the ball with a slight “left-to-right” tendency that day, it would be best to take that notion out to the course rather than attempt to re-work your swing. Doing more of what is working works on the golf course, and it works in investing.
If you find that writing thank you notes, following the niceties of life that are extended to you, gets you more niceties in the future, you should write more thank you notes. If you find that being pleasant to those around you elicits more pleasantness, then be more pleasant.
And if you find that cutting losses while letting profits run–or even more directly, that cutting losses and adding to winning trades works best of all–then that is the course of action you must take when trading/investing. Here in our offices, as we trade for our own account, we constantly ask each other, “What’s working today, and what’s not?” Then we try to the very best of our ability “to do more of that which is working and less of that which is not.” We’ve no set rule on how much more or how much less we are to do, we know only that we are to do “some” more of the former and “some” less of the latter. If our long positions are up, we look at which of those long positions is doing us the most good and we do more of that. If short positions are also up, we cut back on that which is doing us the most ill. Our process is simple.
We are certain that great–even vast–holes can and will be proven in our rules by doctoral candidates in business and economics, but we care not a whit, for they work. They’ve proven so through time and under pressure. We try our best to adhere to them.
This is what I have learned about the world of investing over three decades. I try each day to stand by my rules. I fail miserably at times, for I break them often, and when I do I lose money and mental capital, until such time as I return to my rules and try my very best to hold strongly to them. The losses incurred are the inevitable tithe I must make to the markets to atone for my trading sins. I accept them, and I move on, but only after vowing that “I’ll never do that again.”

[Hoop]

Good repost Strat.. (Soulman)

I'm still here too...:):).

Now 4 years later...What is the state of the ASX market now ???....A new cyclic bull market has commenced methinks

[ratkin]

Mr Ps rules are textbook for a trader . However a long term investor ie buy and hold proponent would not agree with many of the rules'
As a trader capital preservation is key
as a long term investor buying shares below their true value is the goal

Take Mr Ps coomposite indicator , great for a trader . However a long term investor would make more by
only buying when the indicator was coloured red

[STRAT]

Mr Ps rules are textbook for a trader . However a long term investor ie buy and hold proponent would not agree with many of the rules'
As a trader capital preservation is key
as a long term investor buying shares below their true value is the goal

Take Mr Ps coomposite indicator , great for a trader . However a long term investor would make more by
only buying when the indicator was coloured red
Sorry Ratkin.
Cant agree with any of that.
Capital preservation is the key for everyone.
True value is a moving target. ( eg Feltex )
Those buying in the red with the exception of perfect bottom picking and thats luck at its best, will make less than buying at the early stages of recovery.

[ratkin]

Sorry Ratkin.
Cant agree with any of that.
Capital preservation is the key for everyone.
True value is a moving target. ( eg Feltex )
Those buying in the red with the exception of perfect bottom picking and thats luck at its best, will make less than buying at the early stages of recovery.

I expect most people agree with you , however the main reason buy and hold people fail is because they dont choose the right stocks or diversify properly.
Obviously if people are holding speccy mining stocks or debt ridden issues, then naturally they not going to fare very well
However a basket of twenty plus quality stocks will survive just about anything. Even if one fails its only 5% gone

if the likes of woolworths , Auckland airport , Cochlear , conract energy , Ryman , etc etc fail in a financial crisis , then it would be because society had completely collapsed , in which case folding money would be worthless.

[BIRMANBOY]

Usefull point there ratty...long term investors can disregard some of these rules..As you say "buying shares below their true value is the goal". And if you add to that thought... that the shares you buy are steady dividend producers then you have the perfect combination.. The good dividend turns into a great dividend as the SP (and the dividend) rises
Mr Ps rules are textbook for a trader . However a long term investor ie buy and hold proponent would not agree with many of the rules'
As a trader capital preservation is key
as a long term investor buying shares below their true value is the goal

Take Mr Ps coomposite indicator , great for a trader . However a long term investor would make more by
only buying when the indicator was coloured red

[trackers]

Good repost Strat.. (Soulman)

I'm still here too...:):).

Now 4 years later...What is the state of the ASX market now ???....A new cyclic bull market has commenced methinks

think so too on the balance of evidence, but everyone seems to think we're in for a big correction imminently

[soulman]

Not sure about this one but I tend to agree with Strat that all investors need capital preservation regardless of whether their start up capital is low or in the millions, regardless of whether they are traders or long-term investors....No one likes to lose money, especially the rich....that's why they are rich for a reason, they don't like to lose or give money away.

Thanks Strat for the 13 Rules again......I really think that articles changed my mindset and re-launched me when I saw that article in 2010.

Tracks....maybe we are in a bull and the rest will not be....remember the world market has outperformed the Australian market by far in the last 24 months. Maybe the reverse is coming.

[ratkin]

One could argue that money in high quality stocks was safer than money in bank accounts or other financial companies.

[trackers]

that was a short DOW correction

http://finviz.com/fut_chart.ashx?t=YM&p=d1&s=m

[Hoop]

I expect most people agree with you , however the main reason buy and hold people fail is because they dont choose the right stocks or diversify properly.
Obviously if people are holding speccy mining stocks or debt ridden issues, then naturally they not going to fare very well
However a basket of twenty plus quality stocks will survive just about anything. Even if one fails its only 5% gone

if the likes of woolworths , Auckland airport , Cochlear , conract energy , Ryman , etc etc fail in a financial crisis , then it would be because society had completely collapsed , in which case folding money would be worthless.

Yes...an expert buy and holder invests in good stocks..when the price drops...no worries....but....A big fish comes along gobbles up your company for nixs....is that a worry????

[ELYOB]

Imho ! We are in disneyland with worldmarkets facing uncertainty . The US presidential election is the big factor now . If Obama wins ...see a big correction ...... we will have a lame duck world of markets ...... so , if this happens , I will be a bullish bear!

Protect capital is vital right now until the above is known !!!!!!!!

Obama = lame duck Congress = 20% drop in capital potential .

[trackers]

Interesting theory... i hope Obama grows some balls in his second term; I think (maybe hope) he will

[percy]

Interesting theory... i hope Obama grows some balls in his second term; I think (maybe hope) he will


The way he walks I'd say he is hung like a horse.

[STRAT]

Imho ! We are in disneyland with worldmarkets facing uncertainty . The US presidential election is the big factor now . If Obama wins ...see a big correction ...... we will have a lame duck world of markets ...... so , if this happens , I will be a bullish bear!

Protect capital is vital right now until the above is known !!!!!!!!

Obama = lame duck Congress = 20% drop in capital potential .Hi Elyob.
If we get the other guy we get a another Bush but this time with a half a brain ( 50% gain ). Thats gonna be good eh?
http://www.aussiestockforums.com/forums/images/smilies/hitsthefan.gif