NZSX50 - Good News!

[smpl]

regarding the new index - does anyone have the infrastructure to arb the new future on the NZX20 against the underlying basket? i would be willing to help develop the trade.

[winner69]

Window dressing time again .... out with the dogs and pump up the winners a bit more .... and we better buy a few more shares cause we wouldn't want to be overweight cash at the end of a good quarter would we

[winner69]

congradulations to those of you who believe the NZSX50 is "up up and away". You can be congradulated for being the master minds behind the new Tui beer bill board;
nzsx50 up up and away YEAH RIGHT ! lol

Was just taking a breather .... on the up up and away again

[Hoop]

http://i458.photobucket.com/albums/qq306/Hoop_1/tui-billboard.jpg

[winner69]

Double tops a bad sign ..... just a fallacy Belg ... load of the old proverbial

Just look at the double tops around the 3300 line .... and where are we now

[Major von Tempsky]

A phenomenon that no-one, but no-one, seems to have noticed or remarked upon.

Looking at Bloomberg this morning I saw a headline that crystallized it for me.

"Dow Breaks 5 day Losing Streak".

While that is remarkable in it itself what is even more remarkable is that the umbilical cord link with the NZX seems to have broken!

Until a matter of months ago, if the Dow had a slight sniffle say -0.10%, then the NZX would be rushed off to hospital on life support with - 1.0%!

Anyone else noticed that? Any reasons? Have we suddenly matured into adults as investors for some obscure reason?

Of course we still have the deeply regrettable phenomenon of overseas investors using our largest shares as proxies for currency speculation in the NZ dollar (amazingly the NZ dollar is the tenth most traded international currency!) and until that goes away we won't have a rational NZX. And the other major problem that the authorities seem to be totally powerless to prevent - insider trading.

[Hoop]

A phenomenon that no-one, but no-one, seems to have noticed or remarked upon.

Looking at Bloomberg this morning I saw a headline that crystallized it for me.

"Dow Breaks 5 day Losing Streak".

While that is remarkable in it itself what is even more remarkable is that the umbilical cord link with the NZX seems to have broken!

Until a matter of months ago, if the Dow had a slight sniffle say -0.10%, then the NZX would be rushed off to hospital on life support with - 1.0%!

Anyone else noticed that? Any reasons? Have we suddenly matured into adults as investors for some obscure reason?

Of course we still have the deeply regrettable phenomenon of overseas investors using our largest shares as proxies for currency speculation in the NZ dollar (amazingly the NZ dollar is the tenth most traded international currency!) and until that goes away we won't have a rational NZX. And the other major problem that the authorities seem to be totally powerless to prevent - insider trading.

Hmmm...MVT???????? your view of the NZX50 is rather harsh...eh? considering it is one of the best performing Equity indexes in the world since the 2008/2009 crash and far better than the DOW when the currency rates are factored in.



The chart below has the S&P500 instead of the DOW but no difference really as they both track very closely together.



http://i458.photobucket.com/albums/qq306/Hoop_1/NZX50vSP500vAllords10042012.png

[winner69]

how long are we going to be resting for winner69, unforetunately i agree with you we are having a breather all right except it is only because we have climb to the top and we are having a breather before we decend to 3280 ft.

Only a few days (or so) before we gwt to 3600 ..... up up and away

[Under Surveillance]

Only a few days (or so) before we gwt to 3600 ..... up up and away

Whoopdee do, another 22 points and we'll be back where we were at 3577 on 20 May 2011. But the NZX50 is a gross index, so the new 3577 is actually 3750+.

[winner69]

Whoopdee do, another 22 points and we'll be back where we were at 3577 on 20 May 2011. But the NZX50 is a gross index, so the new 3577 is actually 3750+.

and it was about that way back in 2008 as will .... stocks are fantastic for the buy and hold people eh

And some gurus saying that over the next 5 years the S&P will still not beat T bills

[Hoop]

I wonder how much the European markets had already factored in these French and Greek elections last week...

Edit... Italy and Spain gone green from a bad start..so not as bad as Asian markets thought...eh?

[winner69]

Phew .... the worlds been saved .... up up and away from here

And jsut in time for a great ann from FPA on Thursday .... the world fixed is great news for FPA

[Hoop]

Phew .... the worlds been saved .... up up and away from here

And jsut in time for a great ann from FPA on Thursday .... the world fixed is great news for FPA

Yes the world has been saved....thanks to those Super Heroes...

With that faith behind those in Europe who wear their underpants on the outside of their clothing we should see 5000 by Xmas

Oooops this is the NZ thread...oh what the hell 5000 on the NZX50 as well....

[Major von Tempsky]

I say old boy, the DOW, S & P and NASDAQ had spiffing overnight rallies what! Its what Sparky the Clown said at the top of this page plus 5 weeks.
DOW up 2.2% (or was it the S & P, no matter) NASDAQ up 3%.

It seems the hyperventilating media have decided that the Eurozone decision that Euro-Stability funds could be used to help struggling banks directly, and instead of via their national governments has intoxicated the media scribes and Wall St has followed their lead.

That just leaves the small matter that Spain etc governments are effectively bankrupt (they can't afford to pay the interest rates demanded they say) and whenever a large tranche of sovereign debt comes up for refinancing its going to be everyone for the lifeboats again. Plus negative growth/stagnation and huge unemployment.

I prefer the solution that Spain, Greece, Italy and Portugal exit the euro and solve their debt problem that way and allow newly floating national currencies to move them into growth and much lower unemployment.
But who wants the right solution when there is a much worse non solution being used?
I think Frau Merkels growth package is a bit of petty ineffectual window dressing.
How long will the populations of Spain, Italy, Greece, Portugal put up with this?l

[Hoop]

NZSX has been one of the very few Global Markets to preserve its Bull market cycle since the 2007-2009 Global Bear.

A rough guide to cyclic cycles ...Bull lasts 4 years....bear lasts between 1 to 3 years
Using that rough guide the Cyclic Bull will be 4 years old in March 2013....therefore this Bull is mature and approaching old age and could die at any time.

Compared to the previous bull if I was a farmer this poor performing bull would've been to the knackers yard by now.....:(:mad ;:

Hmmm... older and bolder????...there's still time (just!!) to redeem yourself my Old 4 Legged "Friend"...past history often shows a rapid accelerated rise to exuberance in the last stage (3) of the Bull cycle...so get off your lazy arse it's time to giddy up and go.

4000 by Xmas:cool:??? or will this stupid bull be fertilizer dust by then??

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5004072012-1.png

[percy]

Well this old bull farmer is looking pretty good.Have just shot all the "Black Swanns" down the bottom paddock,so with big demand from the local cows the future looks pretty good.The local knackers yard has gone into receivership,because local farmers and businesses have reduced debt and are very profitable.The rain has been good for pasture,and we still have plenty of hay in the barn.With our soaring bank account we are looking to expand,although Mildred is keen to buy more Units in Surfers as she feels with our NZ dollar so high now is the time to buy more Aussie property [with their prices so depressed].May even buy a few US properties.The huge dividends were are receiving from our NZshares is getting to be a bit of an embarsement.Seems everywhere we put our money in NZ we hit pay dirt,particulary the ChCh rebuild dirt.

[h2so4]

Good on you percy. As a matter of interest are aussie real estate agents spruiking surfers apartments in NZ?

[percy]

Good on you percy. As a matter of interest are aussie real estate agents spruiking surfers apartments in NZ?

I have not been looking so can't say.Will keep a look out.

[winner69]

Was just taking a breather .... on the up up and away again

What more needs to be said ....... Up up and away

Did I see 3600 plus today?

[winner69]

Jeez .....the man on the radio says a FOUR year high .....up up and away

[winner69]

With all this good news coming out and the world's problems all fixed for now NZX will be 3700 this time tomorrow and over 4000 by Xmas

Up up an away

[percy]

With all this good news coming out and the world's problems all fixed for now NZX will be 3700 this time tomorrow and over 4000 by Xmas

Up up an away

I am ,with you there winner69.Rain has stopped,clear blue skies.Strong trajectory to Xmas at least.

[CJ]

I am ,with you there winner69.Rain has stopped,clear blue skies.Strong trajectory to Xmas at least.except for the hydro companies - that's bad news!! ;)

[Hoop]

except for the hydro companies - that's bad news!! ;)


Originally Posted by percy http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=379058#post379058) I am ,with you there winner69.Rain has stopped,clear blue skies.Strong trajectory to Xmas at least.

Bad news hydro companies... good news photoelectric home owners :D

[Hoop]

Arguably one of the best Stockmarkets in the world during these last 3.5years. The NZX has been in a Cyclic Bull Market Cycle since the March 2009 Global turnaround.....Aussies eat yur heart out :D

A bit of hindsight info for the Europeans and the Yanks...the grass is definitely greener in NZ. Imagine since March 2009, the NZ dollar currency is up... NZX50 is up... your Euro is down...US$ is down...You guys would've made a fortune + more...

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5030082012.png

[ratkin]

Is the market on drugs?

2009-2012 when was the last time we had a run like this?
Im very happy with my Comvita , trade me , Ryman , Sumerset, Auckland airport and ebos , keep moving up the stops , but none being hit

[winner69]

Is the market on drugs?

2009-2012 when was the last time we had a run like this?
Im very happy with my Comvita , trade me , Ryman , Sumerset, Auckland airport and ebos , keep moving up the stops , but none being hit

Not far off 3800 now .... last seen January 2008 ..... heck that was some time ago eh

Not on drugs ratkin ..... sentiment very positive and all that dosh the funds have has to go somewhere

Up up and away .... and not even on drugs

[Under Surveillance]

Is the market on drugs?
Could be. Ostapchuk's coach was seen acting furtively in Cable Street this morning. Locals suspected he was trying to intecept Tim Bennett's lunch to put some oompah powder in it and gee Bennett up. It now looks as if his mission was more extensive.

[troyvdh]

...have been around a while....is this due to the simple fact that % rates are low...maybe heading even lower...so even a new arrival on this planet could assume that shares (divs) will appreciate in value....is it rocket science....

[troyvdh]

ooohhh sparky.....I am almost in tears......you sound like me.....in my day NBR was printed daily.,...even dear winner69.....bless him...appears so ebullient about past performances do not seem to appear to appreciate events past....no offence or ridicule intended.....troy

[troyvdh]

...looking at the 3 year NZ chart....looks like something akin to 'irrational exuberance"..... perhaps...

[winner69]

...looking at the 3 year NZ chart....looks like something akin to 'irrational exuberance"..... perhaps...

No way Troy .... finally punters are realising how cheap most NZX stocks are ... as the guru man Stubbs says about FPA takeover 'its a steal' ..... the whole market 'is a steal' eh

Up up and away .... the 3800 mark today .... then 4000 .... maybe 5000 by xmas .... but that a bit exuberant maybe

[Stranger_Danger]

Maybe. But on the other hand, it is all feeling a little easy at present, which doesn't always bode well.

I just have this inkling I'm going to be swapping AU/NZ stocks for US cash in about 3 months. As nuts as that probably sounds today, esp given Bernanke's latest dose of madness.

[winner69]

Good one sparks ..... US markets to go up another 2000 to 3000 .... NZX well over 4000 by Xmas then

Up up and away .... NZX 'its a steal'

[Stranger_Danger]

Oh dear. A two data points certainty.

[ratkin]

Winner is bullish!!!

Now that does make me nervous , especially with october coming up

Seriously though , last stocks i bought for my long term portfolio were in february (Sumerset,Ebos, Comvita)
I wont be buying any more until i see a decent correction.
I did very well from the financial crisis from buying at a time when Mr P called me a "brave idiot"

Happy to hold , but not happy to buy

And to Stranger danger , i am still holding fletcher building . One year delay means nothing imo , Christchurch will carry the company for yeaars to come

[winner69]

Winner is bullish!!!

Now that does make me nervous , especially with october coming up

........

I wont be buying any more until i see a decent correction.


Follow the sentiment is my mantra ratkin .....otherwise I'd believe this sort of stuff from Husman -

There are few times in history when the S&P 500 has been within 1% or less of its upper Bollinger band (two standard deviations above the 20-period moving average) on daily, weekly and monthly resolutions; coupled with a Shiller P/E in excess of 18 – the present multiple is actually 22.3; coupled with advisory bullishness above 47% and bearishness below 27% - the actual figures are 51% and 24.5% respectively; with the S&P 500 at a 4-year high and more than 8% above its 52-week moving average; and coupled, for good measure, with decelerating market internals, so that the advance-decline line at least deteriorated relative to its 13-week moving average compared with 6-months prior, or actually broke that average during the preceding month. This set of conditions is observationally equivalent to a variety of other extreme syndromes of overvalued, overbought, overbullish conditions that we've reported over time. Once that syndrome becomes extreme - as it has here - and you get any sort of meaningful "divergence" (rising interest rates, deteriorating internals, etc), the result is a virtual Who's Who of awful times to invest.

Consider the chronicle of these instances in recent decades: August and December 1972, shortly before a bull market peak that would see the S&P 500 lose half of its value over the next two years; August 1987, just before the market lost a third of its value over the next 20 weeks; April and July 1998, which would see the market lose 20% within a few months; a minor instance in July 1999 which would see the market lose just over 10% over the next 12 weeks, and following a recovery, another instance in March 2000 that would be followed by a collapse of more than 50% into 2002; April and July 2007, which would be followed by a collapse of more than 50% in the S&P 500, and today.
http://hussman.net/wmc/wmc120910.htm


Up up and away .....for a limitless longer anyway

[Hoop]

NZSX has been one of the very few Global Markets to preserve its Bull market cycle since the 2007-2009 Global Bear.

A rough guide to cyclic cycles ...Bull lasts 4 years....bear lasts between 1 to 3 years
Using that rough guide the Cyclic Bull will be 4 years old in March 2013....therefore this Bull is mature and approaching old age and could die at any time.

Compared to the previous bull if I was a farmer this poor performing bull would've been to the knackers yard by now.....:(:mad ;:

Hmmm... older and bolder????...there's still time (just!!) to redeem yourself my Old 4 Legged "Friend"...past history often shows a rapid accelerated rise to exuberance in the last stage (3) of the Bull cycle...so get off your lazy arse it's time to giddy up and go.

4000 by Xmas:cool:??? or will this stupid bull be fertilizer dust by then??

Wrote this above post on 5th July 2012 post#335..Since then the old fella has got of its arse and giddied up and goed :t_up:


There was a scare in June !! but it bounced back up off its support FAIL in early July.
Why are some investors bullish??? the chart tells the story and while it stays pointing upwards I stay bullish...Yes its a mature bull market and this could be its last phase characterised by an exuberant burst upwards....however this bull could end soon or it could last for many months yet with another correction or two involved ....
Is another bull market correction due ? It seems to happen at the top of the SD channel so far the NZX50 has only had a small amount of time in the upper half of the channel but it is close to the top and is going to test the 3810 resistance... this is one place to watch to see signs for a correction + using TA indicators.

Bury your emotions.... Buy in up trends (average up) sell on trend changes / TA sell signals (none apparent yet)

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5014092012.png

[Hoop]

Hi Guys.

I think we are in stage 2 because the Hoop effect++ is missing.....

+++ I have never made much capital gain in Stage 3. I have made capital losses a few times during this media party/boom bull market stage though.

The Average Age of a cyclic Bull's life is 4 years but it varies...It is possible this NZX50 bull may live a longer than 4 years (maybe 5 or 6 years) due to suspended animation periods and the lack of distance upwards off the bottom so far this last 3.5 years (65%)...

Interesting point is the sudden surge upwards (breakout) past the Fib 61.8% at 3600 (Instinctive behaviour to buy)

Serious note the DOW Theory behavioural area also suggests Stage 2.
Note stages are not time related ..Stage 3 could be mild/subdued and very quick or slow or get stuck in a low activity Stage 2 (slow rise up)... who knows? Belgs crystal ball?? or his mum:D

I have butchered this article to show my point.. apologies to stockcharts (http://stockcharts.com/help/doku.php?id=chart_school:market_analysis:dow_theor y)

http://i458.photobucket.com/albums/qq306/Hoop_1/Untitled.png

[Hoop]

Hoop - those taxi drivers again eh? It's a wonderful indicator...

Ohhhhh yes!!!!!!!!!!!...If you want to know where the market is going to go ask the little people....Tea ladies or inversely the taxi drivers/barpeople etc...

Why waste your money with a Stock Brokers / Financiers reports when there is so much free advisory talent around...eh? ;) :D

[CJ]

This good run seems to be independent to the fact the economy isn't very good. Should the economy improve, then the Bull should continue to run.

In addition, for the NZ market, we will continue to see an increased inflow into the NZX as kiwisaver contributions increase. And should the government books improve in a few years, contributions to the NZ super fund (cullen Fund) should also recommence.

Based on this very simple analysis, and on the assumption that the current recession will end before the bull market does, then the markets should keep going up for a bit longer.

The alternative is that the current bull run ends before the economic recovery in which case the recession which hasn't ended yet gets worse.

[Hoop]

This good run seems to be independent to the fact the economy isn't very good. Should the economy improve, then the Bull should continue to run.

In addition, for the NZ market, we will continue to see an increased inflow into the NZX as kiwisaver contributions increase. And should the government books improve in a few years, contributions to the NZ super fund (cullen Fund) should also recommence.

Based on this very simple analysis, and on the assumption that the current recession will end before the bull market does, then the markets should keep going up for a bit longer.

The alternative is that the current bull run ends before the economic recovery in which case the recession which hasn't ended yet gets worse.

CJ....The stock market cycle is affected briefly (short term) by the day by day changes within the economy ...however the business cycle and the economic cycle have a low correlation with the Sharemarket cycle ..Therefore they are not the primary drivers of the Sharemarket. The primary driver is the PE Ratio Cycle and the primary driver of that PE Cycle is inflation rate cycle... the by-product of inflation is interest rates.

If is usually difficult to except the above fact as it seems a paradox until you look into the physics and behaviours of these Drivers and the other variables...then the "penny drops".
This is why Secular cycles (that I keep on harping about)and Not the Economy are so important when you look into your crystal ball....It all to do with Group investor behaviour/ perceptions and outlooks.
It is possible for the sharemarket cycle to be in tandem with the business cycle ..however it is equally possible for the sharemarket cycle to be totally out of phase as well.

Being a share market investor and hoping for the economy to come right..could earn you dollars but it could equally be your death wish....How many times have you heard the phrase.. "The stock market is irrational".....In realty the market is seldom irrational.. its the peoples false logic and perceptions that are irrational.

NZ research is hard to come by but here is one from the USA.......It shows economic growth V sharemarket ...Surprised ..eh?? http://www.crestmontresearch.com/docs/Stock-Economy.pdf

[CJ]

CJ....The stock market cycle is affected briefly (short term) by the day by day changes within the economy ...however the business cycle and the economic cycle have a low correlation with the Sharemarket cycle ..Therefore they are not the primary drivers of the Sharemarket. The primary driver is the PE Ratio Cycle and the primary driver of that PE Cycle is inflation rate cycle... the by-product of inflation is interest rates.What drives the interest rate? The Economy isn't it. Agree it is a complex web and my analysis was overly simplified but a good economy, creates inflation, higher growth which prompts higher P/E ratios so to say the economy is irrelevant is also taking it to an extreme.

Share prices should rise as earnings are higher due to growth in the economy and due to growth, investors are willing to pay a higher P/E.

[4be]

CJ....The stock market cycle is affected briefly (short term) by the day by day changes within the economy ...however the business cycle and the economic cycle have a low correlation with the Sharemarket cycle ..Therefore they are not the primary drivers of the Sharemarket. The primary driver is the PE Ratio Cycle and the primary driver of that PE Cycle is inflation rate cycle... the by-product of inflation is interest rates.

If is usually difficult to except the above fact as it seems a paradox until you look into the physics and behaviours of these Drivers and the other variables...then the "penny drops".
This is why Secular cycles (that I keep on harping about)and Not the Economy are so important when you look into your crystal ball....It all to do with Group investor behaviour/ perceptions and outlooks.
It is possible for the sharemarket cycle to be in tandem with the business cycle ..however it is equally possible for the sharemarket cycle to be totally out of phase as well.

Being a share market investor and hoping for the economy to come right..could earn you dollars but it could equally be your death wish....How many times have you heard the phrase.. "The stock market is irrational".....In realty the market is seldom irrational.. its the peoples false logic and perceptions that are irrational.

NZ research is hard to come by but here is one from the USA.......It shows economic growth V sharemarket ...Surprised ..eh?? http://www.crestmontresearch.com/docs/Stock-Economy.pdf

Does anyone have any info on a historical P/e for the NZX? I have current p/e of NZX50 at 19.37 ( from the bloomberg app on my phone) however not sure how it has been calculated so probably isn't the best way to judge where we are in this secular trend. Have read a bit of the Cresmont research, would be great if there was a an adjusted EPS we could get for the NZX.

[Hoop]

What drives the interest rate? The Economy isn't it. Agree it is a complex web and my analysis was overly simplified but a good economy, creates inflation, higher growth which prompts higher P/E ratios so to say the economy is irrelevant is also taking it to an extreme.

Share prices should rise as earnings are higher due to growth in the economy and due to growth, investors are willing to pay a higher P/E.

What drives the interest rate? The Economy isn't it?........Not always There are many factors... economy is a broad brush...however fiscal history with interest rates shows we have had good economic growth as well as bad under high interest rates... We had OCR of 6% during the last bear market with negative economic growth(recession)...we have record low interest rates atm OCR 2.5% with slow growth... a paradox? What drove the interest rates up to 20% back in the 1970's-1980's It wasn't a rampaging economy, quite the opposite.

Agree it is a complex web and my analysis was overly simplified...sure I understand its' hard to write a 1000 page book in a single post. :) I'm having this same problem responding to your post:cool:

but a good economy, creates inflation, higher growth.....The media has taught us this load of bollocks...a good economy is one of higher growth but controlled to the ideal 1 to 3 % inflation..when inflation (or deflation) gets out of control then something has not gone according to that good economic plan....sometimes high inflation is used as a 2 edged sword to get debt levels under control. Property investors love inflation ...buy with 100% loan using other equity 18% inflation paying 22%pa interest...ahhh those where the days..made a lot of serious money:) High interest rates back then early 1980's but the NZ economy got the Banana Republic reputation. Don't confuse higher growth when there's high inflation around ,,that higher growth may be a mirage.

which prompts higher P/E ratios.......Hmmmm No!!!...the opposite!!!..higher interest rates puts pressure on stock yields (more pressure with secular bear lesser pressure with secular bull).... to get a competitive stock yield with increasing interest rates the earnings has to increase at a faster rate... companies with debt servicing have an increasing problem to do this...normally PE Ratio falls with increased inflation.

so to say the economy is irrelevant is also taking it to an extreme.....I'm a mere mortal unable to dictate the rules and theories of the marketplace.

Share prices should rise as earnings are higher due to growth in the economy...In theory yes but only if inflation is subdued...and only if the investors are in a postive mood.

and due to growth, investors are willing to pay a higher P/E. ...And again I will harp on.....Theorically...Yes, very willing in a secular bull market cycle.....but...not as willing in a secular bear market cycle....its all to do with the mood of the investors within the market place

Cheers CJ
enjoying this debate... I suspect some other mightn't be..never mind

[macduffy]

Does anyone have any info on a historical P/e for the NZX? I have current p/e of NZX50 at 19.37 ( from the bloomberg app on my phone) however not sure how it has been calculated so probably isn't the best way to judge where we are in this secular trend. Have read a bit of the Cresmont research, would be great if there was a an adjusted EPS we could get for the NZX.

For what it's worth, last month, Craigs calculated the "current" PE for the NZX50 to be 13.1, ASX200 at 12.1, S&P 500 at 13.1 and FTSE at 10.2.

[4be]

For what it's worth, last month, Craigs calculated the "current" PE for the NZX50 to be 13.1, ASX200 at 12.1, S&P 500 at 13.1 and FTSE at 10.2.

Thanks Macduffy, Quite a difference from the Bloomburg one but I suspect BB P/E is not up to date with current earnings.

[winner69]

4be - just for you courtesy of Forbar. Nearly a year old but currently as macduffy has posted

[4be]

Cheers w69

[4be]

Without longer term data I guess its hard to tell the secular trend for the NZX, but just looking at W69s image it shows P/E from low to high during 00 - 07 , then P/E trending down since. Doubt there is anyway to get more historical than this , as Cresmonts research dates back 100 years so this is how they can see the secular trends.

[Silverlight]

Here's one from the archives, past 10 years to month end August vs the Index.

[Under Surveillance]

Here's one from the archives, past 10 years to month end August vs the Index.

Thanks, Silverlight.
What is the source of the estimates of forward P/E?

[4be]

Thanks, Silverlight.
What is the source of the estimates of forward P/E?

Hey,

Why would you use forward p/e for historical data?

Ta

[winner69]

Hey,

Why would you use forward p/e for historical data?

Ta

To see how optimistic analysts are about the future .... projectings earnings growth that never happened

[Silverlight]

Thanks, Silverlight.
What is the source of the estimates of forward P/E?

All analysts estimates, obviously there are limitations, as not all stocks are covered well, (ie Cavalier or Xero), but these are usually immaterial as their weights are not big enough to make a difference.

[Under Surveillance]

Thanks, again, Silverlight

[Silverlight]

4136
Hey,

Why would you use forward p/e for historical data?

Ta

As Winner said to gauge analysts expectations at the time. The quoted P/E's of Craigs etc are all forward looking.

Bloomberg's 19.4 P/E is the actual P/E for last year, I just tried to calculate it and got 20.1, so within the ballpark given prices changes since then.

I have extended the chart back 15 years, note I had to splice the NZX50 returns with NZSE40 prior to 2001. Also note that Telecom made up between 25-30% of the index until 2002-2003, so any changes in earnings over the period for Telecom is probably the reason for the large swings in earnings expectations.

[4be]

Excuse my ignorance but why wouldnt you just use actual p/e for years up to now then forward for FY13. What is the advantage of seeing what they thought was going to happen? Too compare with actual p/e? too see how wrong they really are ;) haha , cheers

[Silverlight]

Excuse my ignorance but why wouldnt you just use actual p/e for years up to now then forward for FY13. What is the advantage of seeing what they thought was going to happen? Too compare with actual p/e? too see how wrong they really are ;) haha , cheers

The only time actual P/E is relevant is the moment the company announces earnings, but even then it can become distorted as soon the company forecasts future earnings as the market is always forward looking. You buy a share in a company today to participate in future earnings, so the past may give you an indication on what potential earnings may be, it is future earnings that effect the price.

See the attached chart, actual P/E is extremely volatile, because the earnings is fixed while price can fluctuate on future prospects for 6 months until the company reports again.

After the 2008 earnings season, many companies reported reduced profits, this made their P/Es look extremely high as the market rallied in 2009, as the prices of companies reflected investor expectations that earnings would rebound, however if you looked at the historical P/E of 50 in 2009, you would have the said NZX50 was overvalued. Looking at the forward P/E gives you a much better gauge.

At the end of the day using P/E, forward or otherwise is only useful if you understand what drives the numbers underlying it. If you know the P/E intimately for Telecom for example is around 10, and stock is trading at 12, and you don't expect revenue growth, then you sell the stock and buy something you think is fairly valued or undervalued.

[Fudosan]

Sorry I'm very new to share investment in NZ. How long has NDX been around? Is a chart covering the whole period not available? So, the PE has never been below 10?

[Silverlight]

Sorry I'm very new to share investment in NZ. How long has NDX been around? Is a chart covering the whole period not available? So, the PE has never been below 10?

The NZX50 started in 2003, but you can get back dated date to 2001, prior to 2003 it was the NZSE40 going back to early 90's, also the 40 was capital only, so not that great a representation for returns given NZX stocks are some of the highest yielding stocks globally.

[Fudosan]

Thanks Silverlight. So they added 10 more stocks to the index.

NZX stocks are some of the highest yielding stocks globally.You mean dividend yield? What sort of range? 4%? 5%? Dividend is what I'm after so it's good news. I could be totally wrong but from what I've read and heard, the NZ stock market is a dangerous place to navigate because financial figures released by companies are not reliable. It takes extra care when reading the fine prints in financial statement, or so I've been told.

[CJ]

I could be totally wrong but from what I've read and heard, the NZ stock market is a dangerous place to navigate because financial figures released by companies are not reliable. It takes extra care when reading the fine prints in financial statement, or so I've been told.I would say less dangerous that most countries.

Some company's try to hide stuff as extra-ordinary expenses or use adjusted profits but most people see straight through this. Much easier to spot than buying a house where the previous owner has done a lot of dodgy DIY renovations.

Dividend yield varies depending on company. Buy the weekend herald and look at the div yeild column to see who pays a big dividend. But remember a big dividend is not much use if the shareprice is going down.

[Fudosan]

I would say less dangerous that most countries.

Some company's try to hide stuff as extra-ordinary expenses or use adjusted profits but most people see straight through this. I used to invest in the Japanese stock market. Companies would hide losses using related-entities. Most "investors" only focused on reading net profit but I've learned to look at revenue and operating profit of a company over a long time in order to gauge its performance.


Much easier to spot than buying a house where the previous owner has done a lot of dodgy DIY renovations.That shows your color as a property investor? Are you the same CJ on PropertyTalk?


Dividend yield varies depending on company. Buy the weekend herald and look at the div yeild column to see who pays a big dividend. But remember a big dividend is not much use if the shareprice is going down.I stopped NZH subscription several years ago. Is the same data available on its website?

[CJ]

I used to invest in the Japanese stock market. Companies would hide losses using related-entities. Most "investors" only focused on reading net profit but I've learned to look at revenue and operating profit of a company over a long time in order to gauge its performance.I haven't heard of that issue in NZ or a lot of offbalance sheet financing/derivatives (ie. what brought down Enron).


That shows your color as a property investor? Are you the same CJ on PropertyTalk?Yes - but no longer active there. Use to be very involved but moved away from idea of buying another rental.


I stopped NZH subscription several years ago. Is the same data available on its website?I dont think so. I only suggested the Herald as it is very quick to run your figure down the table. Sites like Google finance have it but not in a table.

IRG use to have good tables with div yield. NTA etc on them but they seem to have removed them as they go into wide up mode. I use to copy and paste into excel which would populate the rest of the spreadsheet using vlookup. Anyone know if anyone else provides this kind of info in a table on one page?

[Silverlight]

I use to copy and paste into excel which would populate the rest of the spreadsheet using vlookup. Anyone know if anyone else provides this kind of info in a table on one page?

You can get a plugin for excel and pull the data from yahoo finance, if yahoo have the stat you can pull it into excel, the only limit is per how many you can pull through in a sheet, from memory it is 75 or 100 stocks.

Once its setup you open excel with net connection refresh and waalaa. Google it and I am sure you can download one that is already made, probably US based, but just change codes to top 50 NZX plus a few extra you know pay dividends, Teamtalk, Colonial, Methven, Tourism and the property trusts etc.

[Fudosan]

Not sure if this is a good time to enter the NZ stock market. I remember the NZ index was 1500 about 10 years ago and now it's over 3800. If the stock market is a reflection of the underlying companies, that means the companies must have grown spectacularly over that period. Am I reading it in the wrong way? Actually, I like to do what John Templeton did ("Invest at the point of maximum pessimism.") but I'm not sure when this moment will arrive when central banks around the world keep printing money.

[Hoop]

...Not sure if this is a good time to enter the NZ stock market....

Up is good down is bad....The NZ stock market is in an uptrend...you should be in.
When it breaks the uptrend... "exit stage left" (Snagglepuss)..

Its all rather simple really

[ratkin]

Up is good down is bad....The NZ stock market is in an uptrend...you should be in.
When it breaks the uptrend... "exit stage left" (Snagglepuss)..

Its all rather simple really

In theory , in reality its not quite so easy

[troyvdh]

....low interest rates....simple really....and does ...a bull market ..."climb a wall of worry ".....?????......!!!!!.....cheers

[gonzo56]

In theory , in reality its not quite so easy

Yeah, your right there.

I have to say though, the New Zeland market is on fire. Definitely the place to be at the moment :)

[winner69]

That 3900 only a nudge away

And then 4000 and then 4100 by Xmas .....nothing to stop it is there?

[winner69]

That 3900 only a nudge away

And then 4000 and then 4100 by Xmas .....nothing to stop it is there?

All on track ..... wonder what happened to P's chart ... I think that said 3950 odd in November

[Jay]

It was November 2011 W69, just checked the first post!
Hoop or Tracker maybe be able to reproduce it to see actually how it has tracked??

[winner69]

It was November 2011 W69, just checked the first post!
Hoop or Tracker maybe be able to reproduce it to see actually how it has tracked??

Not as good as Mr P would have done but here is my version

Red line is Mr P's 20% pa from the bottom to get back to the top by Dec 11

Blue line is where I think it heading - at 15%pa but actual to date is +13%

Not a bad effort over 3-4 years is it

[Jay]

Thanks W69, did not thoink it reached Mr P's "prediction"
Yes not a bad effort at all, never had to sell any of my Long term portfolio - survived the GFC and all, although I sell sell Briscoes, as things were not looknmg too good, and invested in DIL and HGL, with what
I thought shortly afterwards the wrong proportions, but I was "right" after all!

[winner69]

Many investors have it right as the top is approached, only when the bottom is in can we see the difference between the guru and the novice ... the guru had made lots and is humble, the novice has made far less and is estactic.

Like Mr P said just follow the main trends ... trading doesn't mean you have to wheel and deal every day or every week or every month ..... having a positive trade might take years

And Mr P did say you could still have shares when the market goes down but keep a very close eye on every individual stock.

Most stocks go down when the market goes down and most go up when the market is positive .... and most times things overshoot on the downside and the upside. Belg would agree that greater returns are made when you you buy when thinga are cheap

Anyway here is the long term trends of the NZX

[percy]

Like Mr P said just follow the main trends ... trading doesn't mean you have to wheel and deal every day or every week or every month ..... having a positive trade might take years

And Mr P did say you could still have shares when the market goes down but keep a very close eye on every individual stock.

Most stocks go down when the market goes down and most go up when the market is positive .... and most times things overshoot on the downside and the upside. Belg would agree that greater returns are made when you you buy when thinga are cheap

Anyway here is the long term trends of the NZX

Your chart with Green and Red makes it look so simple.
Makes me wonder how come I get it wrong so often.!!!

[Hoop]

"....the NZX 50 index became the world's top sharemarket performer over the past month; it is also trading at four-year highs...." (http://www.stuff.co.nz/business/opinion-analysis/7781453/Sharemarket-rise-reflects-investor-optimism)

As I said before..when the market is rising you should be "in" ...Phaedrus MSI is green Winner's basic chart is pointing up...."A rising tide lifts most boats"... it's that simple.

Disc:....95% "in" these last 2 months 5% cash.

[winner69]

methinks 4000 will be here tomorrow .... just a week or so late

punters will feel so much better and give a huge sigh of relief ...... and then 4100 and then 4200 and naybe 4300 by christmas

up up and away

[BIRMANBOY]

C'mon Sparky...do the right thing...buy something big and push it over the top...you know you want to.:)
3998 - almost there..... 90 mins of trading left today....

[QOH]

Showing 4001 on DB website at 3.16pm.

[BIRMANBOY]

Ok, we're counting on you buddy. If you need a loan for the last couple of percent...I'll set up a "donate for a good cause" a/c with the Bank of Nigeria...to be sent c/o me.
I shall launch my buyout of Blis forthwith.

[BIRMANBOY]

Holy crapola..I've never looked at Blis before...hope you didnt buy in at .13...reminds me of the death spiral exhibited by my nemesis GFF. However, I note that they have recently teamed up with Gods Army The Salvation Army to dispense free stuff to needy kids.....that alone is reason enough to buy them out.. FREE...thats no way to drive the share back up. Did you entice them into this cunning plan so you could complete your takeover plans and then implement the takeover at the lowest possible moment in its history? So it was a Kiwi Jesus not a NIgerian Jesus running the buyout. QUOTE=SparkyTheClown;383495]Dear Investor, this buyout may come to you as a surprise, but with Jesus' blessings.[/QUOTE]

[BIRMANBOY]

Marvel indeed. I couldnt even see ice cream on their website? Our capacity for self-delusion is indeed infinite but lets be charitable and call it ...oh I dont know...how about optimism. However its good to know that you have a healthy regard for being able to see these things for what they are... Just a temporary setback and will be surely compensated for by other holdings doing the right thing. Being a contrarian by nature I would actually be sinking some money into buying as I see this company as actually having some value but seemingly in bad need of some drastic changes. Just one that sprang to mind was their product for bad breath selling at $45 ...There are dozens of products at 1/5 th of the price that punters will buy first (even if they aren't as good). The marketing is far too gruesome with far too much information..should be light, fun and frothy. Hold on.. I see some redemption possible.
BirmanBoy, being serious for a moment, I suggest you go back over a few months worth of Sharetrader posts on the Blis page. You will find many posts that give a deep insight into investor psychology - particularly factors like fear, ignorance, stubbornness, capitulation, desperation, hubris, despondency, blind faith and other negative emotions associated with bad investing.

Marvel at how someone who has lost all their investment and has a stock worth 8/10ths of a cent go to the local supermarket to see if the company ice cream is being stocked. Indeed, there were six pottles, we were told. The company was therefore on the way up.

[POSSUM THE CAT]

Birmanboy go back through the Blis thread & you will find the post on checking on their icecream

[ratkin]

Cant remember a time when so many stocks in my portfolio were trading at or near one year highs, almost all of them.

Just did a quick scan of the aussie market for stocks within 5% of annual high and 147 came back !!

[Hoop]

NZSX50...Good News:) Cracked the 4000 at last:t_up: .....Closed 4002
The last time it was over 4000 was on Friday 4 January 2008 ...a hellva long time between drinks..eh?

[BIRMANBOY]

Its got 176 pages!!!...I'll be in a resthome before I get through that. I did read through 4 or 5 pages...Can I go home now?..
Birmanboy go back through the Blis thread & you will find the post on checking on their icecream

[BIRMANBOY]

Enjoy it while you can. Now I suppose all you capitalist pig traders will be selling to lock in your profits and all of us poor long term investors will be wishing we were traders not holders. Oh well. I'm happy you're happy..sort of...maybe...
NZSX50...Good News:) Cracked the 4000 at last:t_up: .....Closed 4002
The last time it was over 4000 was on Friday 4 January 2008 ...a hellva long time between drinks..eh?

[BIRMANBOY]

Ok well hold off on your buyout of Blis..when the correction comes soon you'll be able to pick them up for a song....or even less than a song perhaps. I remember reading about the great depression and share market crash and someone was quoted as saying "I should have known it was a bad sign when even the shoe-shine boys were buying stocks" As a long time devotee of pond scum I am looking forward to the soon to be realized good ole lacklustre NZX where I can pick up some bargains. Everything I own is far too high for it own good ( except GFF and SEK which I have shut in the drawer until they start behaving nicely.)
Fair point Birman Boy. We should all be looking for the signs for the "top".

I'll be listening carefully for the advice of taxi drivers and hairdressers, for when they start buying shares, I'll know the top is coming....

[Hoop]

A very interesting piece from Brian Gaynor today.

There is only one top 30 company from 1987 left in the NZX now...that is FPA.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10841675

[BIRMANBOY]

Thats interesting reading....I can see the marketing possibilities now...
Virgin founder Richard Branson is planning on travelling to the South Pole in a craft powered soley by biomass fuel derived partly from pond scum sourced from top secret site in New Zealand. This is manufactured by Lanzatech which is one of his high profile investments. Along the way he will also be sustained and feed himself with the other by-product of pond scum, namely High Nutrition protein bars. To further illustrate the benefits of this new discovery his high insulation underwear and socks have been woven from the residual fibre mass results of the process. I"m in....
You working for Lanzatech? ;)

[BIRMANBOY]

Take notice my friends of this lovely young man called Sparky
Who, contrary to Mary, an erudite fairy,
did dress up with big shoes, a shiny red nose and khaki.
He invested in Blis, a most promising biz
but soon saw it drop down the khazi.
To question the fairness of afore said sad history
He hired a wise lawyer called Spruiker
Well Spruiker was cunning and took all the funds
hiked off and we call him a fooker.

(humble apologies to any real poets out there)


Less than a song is surely a Limerick.

There once was a company called Blis
Whose sharefunds away did they piss
Despite the spruiking by Simla
Their prospects grew dimmer
A company no-one will miss.

[winner69]

jeez sparky --- you predicting a BIG correction will only make it happen

Take your FPA money and hide it in the back garden .... as soon as any of your other shares show the sligghtest sign of weakness sell out ..... wait for the carnage to end and then buy back in

No more up up and away like a red balloon .... the market is to fall like a lead balloon ... take notice

[BIRMANBOY]

Yes, probably a ways to go...after all there are a host of Phaedrus "followers" on this forum and I believe one of his rules was best time to buy was when everything was on the up. Ho hum...tell me when its over.
I think there's a bit to go yet. I suspect the only warning we will get will be watching the greed of those around us leaping in and buying stocks without using proper valuation methods, desperate to ride the last 10% of the bull run.

Let me know if anyone's dimwitted relatives start talking about buying into shares over the summer BBQs.... in fact, it makes a good thread all on its own for Sharetrader - "Warning signs - Shoeshine boys and other signals"

This makes good reading, back in 1996...

http://money.cnn.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm

[Hoop]

Yes, probably a ways to go...after all there are a host of Phaedrus "followers" on this forum and I believe one of his rules was best time to buy was when everything was on the up. Ho hum...tell me when its over.

It has nothing to do with Phaedrus....
It is a common sense investor rule to invest in a bull market ..
.It may seem kindergarten stuff, but the amount of people out there who got all emotionally bent and twisted about a rising market is unbelievable. As the market keeps rising (cyclic bull market cycle) they take a negative view that its going to fall to bits (the wall of worry).

After rising for a long time these emotional negative over cautious types finally wave the white flag and buy in...(usually at the top)... The market then runs out of steam, turns into a bear, and instead of blaming themselves they blame the "illogical" market and who evers been recommending buying in on a rising market in the first place...so the tall poppy cops it (Phaedrus)...
What makes it worse is that these same people keep buying in a down market (averaging down) believing that the market is fundamentally too cheap (denial) and will rise again..They then finally wave the white flag near the bottom of the cycle (sense of hopeless and doom).....They then blame the illogical stockmarket and they advertise that no one should invest in the stockmarket as its just gambling your hard earned money away....

All arse about face logic...eh?

Ok...These people are entering...shoeshine boys etc....DOW theory has this as a signal that the cyclic bull market cycle is mature.

NZX50 cyclic bull cycle is 3.5 years old now...is it mature I think so....however Cyclic bulls can last longer than 4 years but the average is about 3 years...so if you enter now you running up against cyclic risk v reward scenarios....The market sees increased risk so therefore it must increase the reward to keep the mature bull alive....hence the sudden steep rise and fueled even higher by the entry of emotional type investors (greed)..... before the more volatile bearish double triple tops set in when emotions change (doubt).

[winner69]

I can't argue too much with this. The effects of QE3 being stopped by Bernanke when he is satisfied job numbers are improving sufficiently can't be ignored either.

So it would seem the warning signs include:
- Technical analysis signals showing lack of buying support and trends in moving averages
- external events affecting the cheapness of money or global instability (eg Greece or Spain exiting the Euro)
- anecdotal evidence that idiots are investing without doing homework.

A few interesting charts as to what we does here .......like prices go ......real incomes go down ......and consumers stop spending

Is that what is meant to happen?

http://www.mauldineconomics.com/outsidethebox/hoisington-quarterly-review-and-outlook

[ratkin]

Let me know if anyone's dimwitted relatives start talking about buying into shares over the summer BBQs.... in fact, it makes a good thread all on its own for Sharetrader - "Warning signs - Shoeshine boys and other signals"

This makes good reading, back in 1996...

http://money.cnn.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm

Has it not occured to anyone that postings on internet chat forums are the modern day equivelent of conversations in taxi cabs?

[BIRMANBOY]

I was half expecting DB to do twitter tweets or whatever they are called or Facebook "likes"...maybe they do? Taxis are so yesterday RAtty...c'mon get with the times.
Has it not occured to anyone that postings on internet chat forums are the modern day equivelent of conversations in taxi cabs?

[BIRMANBOY]

If all you bleedin traders would just bite your tongues and keep your dough in what you have at the moment .. it could keep going for a long time..How about exercising some fiscal control and resisting the urge to cash in. But no..you wont listen to the voice of reason and will insist on upgrading the car or going on holiday or some other frivolous activity that will delliver only a temporary euphoric rush as opposed to the warm, secure feeling you can receive by leaving it in and watching it grow.

[BIRMANBOY]

Yes..agree always loved nice watches...unfortunately, being a cold hearted scrooge meant i always ended up selling them on...for a profit of course. I trained as a watchmaker but not much money in the repair side so gave it up. Spent 2 weeks in Geneva many years ago traipsing around every watch shop in town. Now the Swiss understand good watches.
Actually, it is my love of expensive wristwatches that cause me to deplete the household budget. But I wouldn't call myself a trader either. :-)

[Hoop]

The latest NZX50 chart showing a typical Cyclic Bull Market Cycle ...its rallies and corrections and maybe entering its exuberant last (Stage 3) phase.

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX5002112012.png

[winner69]

Jeez Hoop .... does that mean a lot of Birmanboys shares might go down

[BIRMANBOY]

Yes they will but because I have a cunning and well thought out strategy it wont matter. I only buy for dividend and interest producers so going up or down is immaterial to me. The dividends keep coming regardless of SP. In fact going down is good...I'm sitting with cash in hand waiting for the traders to cash in and help drive down SP. Yes the toxic shock of seeing all the unrealized profits get eaten up will be difficult but the long range plan...(hopefully) will see me right. But thank you for caring.
Jeez Hoop .... does that mean a lot of Birmanboys shares might go down

[pierre]

Hoop - your chart is making me think hard.

I have a large lump of cash (250k) coming from my FPA shares and am pondering whether to reinvest in the NZ market now - or sit on the sidelines for a while.

Any suggestions?

[winner69]

One view is that your 250k plus everybody else's 500 mill will be/needs to be reinvested

Will be spread over most stocks so the market will go up with this boost eh

[BIRMANBOY]

I hope your tongue is in your cheek there winner...i'd hate to see poor old Pierre left standing there holding his baguette with no butter so to speak. He'd have to be "un garcon formidable" to be investing at the top of the market wouldnt he?
One view is that your 250k plus everybody else's 500 mill will be/needs to be reinvested

Will be spread over most stocks so the market will go up with this boost eh

[winner69]

Not if he goes with the masses eh ....and buys solid high dividend stocks

On another thread these secular things are at the moment in a state of flux ....they are 15 year cycles remember. Outlook is either the nix down to 2500 as P/E ratios fall OR pes will continue to expand even if earnings per share don't and the nix will head towards 4500 to 5000

Up up and away is the current call

[BIRMANBOY]

Oh its so nice to see the eternal optimism of the young....as opposed to being mired in the cloudy cynicism exibited by yours truly. If you are right I might cash everything up and retire early. Nahhh.
Not if he goes with the masses eh ....and buys solid high dividend stocks

On another thread these secular things are at the moment in a state of flux ....they are 15 year cycles remember. Outlook is either the nix down to 2500 as P/E ratios fall OR pes will continue to expand even if earnings per share don't and the nix will head towards 4500 to 5000

Up up and away is the current call

[winner69]

close at 4075

a price not seen since late 2007 when just coming off the high of that year

Jeez only 5% of an all time high

and the man from stats nz said we had a 'hidden double dip recession' that nobody saw ..... and still it is up up and away

know markets are forward looking and all that sort of stuff but heck what will the market do when things come right

[winner69]

Yeah - you, Hoop and myself already know there is no correlation between the stock market and the economy

But the man on the radio said there was and he sounded like a guru analyst so it msut be true .... prob the same guru who says its profit taking when things go down ... still wondering what they do with their profits ,,, nobody seems to be able to answer that

[CJ]

I read an article saying the fiscal cliff won't effect the current US bull run. Why? Well companies may not get growth in earnings but they will still be profitable and therefore perform better than US deposits which are paying less than 1%.

I would say the same is true for NZ and our 3-4% deposits. And in Kiwisaver for a constant inflow of funds and 2013 should be a good year too. Not all shares will do well (as is always the case) so happy picking.

[percy]

I must agree with them,as I am not prepared to add to any of NZ holdings and think the following stocks I hold are very expensive ;ABA,EBO,FRE[trust],MFT,POT,RYM,and SUM. It all seemed to be rather easy this year,as all ships rise of incoming tide.My concern is whether they will all stay afloat should the tide go out.!! Not prepared to go against the tide [trend] and sell however.?!
I find myself looking at small cap industrial stocks in Aussie at present.

[percy]

Percy, have a look at the stocks trading on P/Es of 10 or so on the NZX. There are a number of intriguing possibilities worthy of homework.

I am referring to Pharmacybrands (which I will be taking a closer look at, but I do not own yet), plus Delegats, Kathmandu and Heartland. I think Heartland has great potential, but I chose PGW as my play in Oct/Nov instead. Arguably Skellerup is cheaply priced too. However, it is Pharmacybrands that I am researching in earnest right now.

I also would cite Cavalier and Dorchester as ones for riskier punters to investigate.

SmartPay intrigues me. It should be viewed as a startup with rapid growth potential and there is significant potential as retailers move to contactless pay systems - though I wonder whether the move to online purchasing is circumventing this altogether. I also pinch my nose at the "reverse listing" and previous financial rigmaroles with previous incarnations ( Provenco and Cadmus).

You are 100% right that cheap blue chips are not to be found now, but if you believe their earnings potential for NEXT year, well, some look pretty good....

And lets face it, if people are only going to get 3% from the bank then stocks look pretty good....

STC.Thank you for the time you spent posting your thoughts .I have looked at the companies you mention other than Dorchester.First of all PHB.Chairman Peter Merton is a very clever man.PHB is very profitable even when pharmacies are not.
I have been in retail or near to retail all my working life,and am very scared to invest in it.I have shares in www.estaronline.com where I am happier.
Delegats ; I had shares in Oyster Bay and frosts in Blenheim in November and having only one crop a year,and risks of disease put me off.Although Sav Blanc is and has been a huge seller in UK wine bars for a number of years I can not see young people drinking the same as their parents.The UK supermarkets are very difficult to deal with and currency risks make Delegats just too difficult for me.
SKL and HNZ I have good holdings in.Other than the orginal HNZ I received from my PGC holding my average cost is about 53cents.HNZ I will leave until interim report before I decide to add to or not.SKL I am very pleased with;I expect a flat couple of years while they build their new CHCh factory. Smart Pay I can't get excited as I lost money on Provenco,while I made huge money on ZIN.ZIN always had a strong balance sheet while others carried a lot of debt.
I brought a few PGW at 38cents thank you.
Cavalier;Carpet making in NZ does not make sense to me.
Sorry to be so negative in replying to your positive post.

[Vaygor1]

Morningstar, IMO, are dubious analysts who focus on minor price swings rather than long term fundamentals.

Dubious is an understatement imho.

A few years ago, I read a (then) newly updated Morningstar analysis of a well known NZ stock. The financial data they stated as being the company's latest results (the same data they used to perform their analysis) was from an annual report over 2 years old.

The embarrassment I felt for Morningstar at the time compelled me to send them a friendly email informing them of their mistake. I never got a response, and the glaring error remained live on ASB Securities' website for months... says it all really.

[winner69]

So close of 4200 (in whole numbers)

Jeez a number not since Oct 2007 .... that was years ago

Another 3% more and an ALL TIME HIGH

This time around driven by real profits and none of the honky dory excitment at that time

Amazing recovery and as Hoop says blue sky coming up

I will conti ue my UP UP AND AWAY chant .... been working well lately

[elZorro]

Yep, deleveraged, lean and mean, hubris at a tenth of the 2007 peak. NZ companies that made it through the GFC should be nigh on bullet proof...

Though when the mergers and acquisitions start firing up, we should start to be suspicious. M&A activity is always a sign of directors and egotistical CEOs who want to grow their business at any price instead of returning profits to shareholders through boring dividends and share buybacks.

Thanks for that perspective Sparky, I've been noticing a lot of M&A in my own area of interest. Some of it doesn't make any immediate sense, and one or two are outright moneygrubbing, at the expense of previous investors.

[Hoop]

I think the NZSX50 is entering its 4th and last phase of a bull market cycle...

The old bull is nearly 4 years old and has nearly reached its average life expectancy age of 4 years....

IPO's, sell outs, sell downs, mergers, rapid up movement of share prices, stocks driven to record highs and considered fundamentally over-valued.....all are behavioural activities associated with the late stages of the 3rd phase/early stages of the 4th and last phase of a bull market cycle......

[Lizard]

I think the NZSX50 is entering its 4th and last phase of a bull market cycle...

The old bull is nearly 4 years old and has nearly reached its average life expectancy age of 4 years....

IPO's, sell outs, sell downs, mergers, rapid up movement of share prices, stocks driven to record highs and considered fundamentally over-valued.....all are behavioural activities associated with the late stages of the 3rd phase/early stages of the 4th and last phase of a bull market cycle......

Still, back at the start of this thread, Phaedrus was talking about reaching the old market high of 4333 in December 2011 based on historic bull market returns of 20% pa...over a year later and we are still not quite there. So despite the recent euphoric ride, we still haven't met either the previous high or historic rates of return over the life of this bull. While any ride this strong calls for caution and can't be expected to continue, I would not have thought it was especially bubbly yet by past standards?

[Hoop]

Agreed Hoop. Time to review all stops.

editted: and start selling those with low liquidity.

Remember Belg a bull market phase may last for a year and has been known to last longer...are you willing to sit on the sidelines during the early stages of the 4th phase rapid rise exuberance....I'm not.
Also theory and practice rarely match...all sorts of patterns and events can emerge .eg...during mid 4th stage bulls can take a breather dip then a few months later take off again (forming another Bull market correction pattern). If a few people think the NZX50 is in a secular bear market cycle then the chances of entering the blue sky area is minimal and they would anticipate a topping out around 4335 area (secular resistance level?)....I can't find enough historical data to understand the secular behavior of the NZSX but chances are the NZX50 is still in a secular bear with a long term down trending Annualised PE ratio...someone may help me out here Winner, Liz?


So what do you think will be the driver to any reversal in the NZX? A technical correction to a market that has had an excellent run over the last year or so, (implies a shorter term correction to prices) or a fundamental change in the macroeconomic outlook for the country, e.g., a recession, which would lead to a long term bear market? I agree that the market is running pretty hot at the moment, but are our companies really overvalued on fundamentals and on historic P/E basis to the extent that we are nearing the peak of an irrational exuberance? I'm not convinced we are at that level yet. I think for many company's, valuations are reasonable. There's always the odd exception and some are over valued, and there also aren't exactly bargains all over the ground to be had either. So what are yo guys going to do? Take profits or quit the NZX altogether, and wait?

So what do you think will be the driver to any reversal in the NZX?
Reversal short term with the cycle still intact (bull market correction) herd instinct to take profits and run when they all think Mr Market's bull has run too hard too fast.
This is a health tonic for the bull market cycle it frees up money and if other markets don't seem as attractive the money is only temporarily sidelined and will once again come back in + more money back into the market..... this is a self-perpetuating process.

Equities Market Cycle Bull to Bear Reversal during the country's Economic Recovery and boom times...The short term noise of sudden economic growth has a positive effect on the stockmarket but longer term result shows a poor correlation of the Equity cycle/Economic cycle causing the old saying "It's not the economy" (http://www.crestmontresearch.com/docs/Stock-Economy.pdf)

People find this as a paradox but here off the top of my head are a couple of causes as to why this sometimes happens..
My examples blow are mostly related around boom times with the lack of available money creating a downward trending effect ..again a self perpetuating effect...............there are many other reasons and factors..
Internal market effects
1...Exhaustion of available money...... investors are all "in" creating buyer momentum loss.
2...Another market(s) becoming more attractive than Equities during boom times and sucking money out of Equities...Commercial Property Market...Commodities Market
3...Company asking for shareholder money to expand (grow, buy ups, costs involving mergers, etc)
4...Increased numbers of startup companies due to economic boom...more IPO's drain the available money pool...creates more competition...lowers company product margins

External market effects
1...Currency Devaluation causing capital flight to Forex markets..preservation of wealth effect/overseas Equities markets look better when viewed with currency benefits. Personally this has crossed my mind recently..NZX is an old bull AORDs is a young Bull market..if NZ currency starts falling I'm off to the Aussi markets..its a no-brainer...Currency devaluation under boom times could occur if NZ major trading partners have a higher rate of economic growth compared to NZ positive growth rate.
2...Inflation....If that rises again ...monetary tightening forces company % yields to rise so to compete with rising interest rates. IR rises effects the company's bottom line....Interesting fact is the lowering inflation during an Equity Bull cycle run...low inflation tends to be at the end of an Equity Bull cycle.
3...Govt does something incredibly dumb (mistiming actions e.g keeping fiscal policy tight during global crisis risks.. i.e raise taxes, keep interest rates higher than trading partners, etc) Cause of the 2010 premature death of an young ASX equities bull????...Highly unlikely atm in NZ....however very large asset sales (IPO) will help exhaust available money to the NZX.
4...Lessening risk atm of an Euro + USA financial crisis reemerging...but still a risk of happening...this causes capital flight back to the safe havens....(NZ not regarded as a global safe haven)...creates risk of the Government to opt for a dumb solution in the face of public opinion.

...but are our companies really overvalued on fundamentals and on historic P/E basis
My view is some are but historically speaking a lot aren't...secular-wise I'm not sure....However noisy P/E fluctuations does effect the NZX index somewhat...
Leaving out the notable crazy stuff e.g 1929 irrational exuberance, The denial phase (1st phase of the Bear market cycle which is impossible to detect very early on and can only be detected in hindsight)..is characterized by the very same FA wording in the old dying bulls defense as they perceive the E in PE is going to keep rising because its "boom time".

So what are yo guys going to do? Take profits or quit the NZX altogether, and wait?

Me personally No..The trend is your friend..Emotion Kills..Don't deduct media logic and end up with false logic...
Observation of the markets historical behavioral cycles helps keep modern day perspectives... OBSERVATION E.G Seeing clouds on the horizon + the Met office records tell you that 70mm of rain falls this month on average ...yet everyone is telling you it ain't going to rain for the next month or two.....so what do you do???...you might be the joke of the month by taking an umbrella with you (tighten stops, question all media's positive hype..) Your reward is the lower risk of getting wet than all the other people laughing at you... obviously you don't use your umbrella..because it may not rain for a long time..but then again if the socially unthinkable happens..It starts to Rain!!! you are not caught out.


Still, back at the start of this thread, Phaedrus was talking about reaching the old market high of 4333 in December 2011 based on historic bull market returns of 20% pa...over a year later and we are still not quite there. So despite the recent euphoric ride, we still haven't met either the previous high or historic rates of return over the life of this bull. While any ride this strong calls for caution and can't be expected to continue, I would not have thought it was especially bubbly yet by past standards?

Yes,, Phaedrus chart is becoming a legend ...actually he draw this to show TA can't see into the future and he was going to prove his point....unfortunately it backfired on him :) as being a TA man he didn't rely on cycles just his MSI so don't think he totally believed in a bull cycle recovery and didn't care anyway as it wasn't relevant in his investment disciplinary strategies..
However his chart does show the nature of every bull market cycle..they all have up trend channels, some up trend channels have different angles ..that's all.
I think from memory he showed the top at 4333 as having to draw a line in the sand somewhere..The line he used just happens to be at a secular bear cycle resistance level.

As the NZX50 approaches the 4300 level, the million dollar questions are;
1...Is the NZX50 in a secular bear market cycle?
2...Does the secular resistance level have any meaning for the NZ market?....historically it has some accuracy for the S&P500 and the DOW but the ASX proved it wrong with the lead up to 2007 with E in P/E showing enornous increasing value so in effect it showed the rare event of a rising index with a falling PE..
3...Is this Secular resistance stuff another form of voodoo?


I don't see a bubble yet..... yet being the operative word.

I would also not just watch the NZX50 but the S&P500 and arguably most importantly the DJIA for signs of overheated behaviour. If there is a big correction coming, it will happen in the USA first and then bourses around the world will follow.

Although not a technician, I understand the 125/365 SMA is a useful tool to track the likelihood of the market being overheated. I look at this technical chart every so often to help inform.

Yeah...the USA equity markets have one thing in common with NZX50 atm they both have aging bulls...Years ago there was a strong relationship between the S&P500 and the AORDs but they went out of sync in 2010 when the Aord's young bull prematurely died and a cyclic bear arrived..The bear has died recently and a young bull has taken over..good news for Aussi methinks as it now has the potential to attract global equity money when other Equity markets enter their bear market stages......

The long term TA indicator Coppock can be useful ...Its better used to confirm a cyclic bottom reversal...but its a very late indicator...a bit like getting the weather forecast for that day at 4pm ...and saying its highly accurate...but it does ease the stress of climbing the wall of worry (ASX market)...Its not noted for showing cyclic tops but I can't see why not....it just you get to know there's a bear around after you are already mauled..

[CJ]

Exhaustion of existing money.

Hoop: you mention this as a factor. One thing that has changed from the past (in NZ and Aust) is compulsory super/Kiwisaver. As long as people have jobs, money will keep flowing in. In NZ, only 10% of Kiwisaver is invested in the NZX os even a 1% movement will be even more funds flowing.

What does this mean? Don't know but my guess is the NZX won't run out os steam due to just a shortfall of new cash. Other factors will have to be in play instead.

[janner]

Wow - great post. I don't know lots about TA so posts like these give me a lot to learn about....

Many do not believe in TA... STC.. DYOR.. :-))

[winner69]

Closed 4317 on Friday

According to Google highest weekly close ever was 4320 in July 2007. I think highest intraday number is 4342

SO LETS SAY WITHIN THE ROUNDINGS THE NZX50 IS AT ALL TIME HIGH

YIPPEE

Anyway only one day before it is official and it will headlines


Isn't it amazing .... nearly 6 years ago the market worth what is today

No doubt fortunes have been lost and made .... and in the future there will be fortunes made and lost


Like the ASX plenty more to come .... punters are only exuberant the moment ... not irrational yet

[percy]

Closed 4317 on Friday

According to Google highest weekly close ever was 4320 in July 2007. I think highest intraday number is 4342

SO LETS SAY WITHIN THE ROUNDINGS THE NZX50 IS AT ALL TIME HIGH

YIPPEE

Anyway only one day before it is official and it will headlines


Isn't it amazing .... nearly 6 years ago the market worth what is today

No doubt fortunes have been lost and made .... and in the future there will be fortunes made and lost


Like the ASX plenty more to come .... punters are only exuberant the moment ... not irrational yet

yes truely amazing.2007 I was looking very good with only four really big holdings;EBO,NPX,PGC and SCY.
Then GFC came along and what I thought were my two strongest shares turned out really badly,ie NPX and PGC.Taken me a long time to just about recover.
My largest holding is now close to 13% of my very wide spread portfolio.The incoming high tide has certainly made all ships rise.I suppose I feel comfortable, so long as interest rates stay low.

[janner]

NPX.. & PGC.... Sorry Perc.. It was me that picked up your NPX " @ 0.11 .. Find it difficult to cry about that..

Well I did when they went four for one.. A cent a day rise was WOW !!.. as they say these days..

[percy]

NPX.. & PGC.... Sorry Perc.. It was me that picked up your NPX " @ 0.11 .. Find it difficult to cry about that..

Well I did when they went four for one.. A cent a day rise was WOW !!.. as they say these days..

No I went through the recap,and brought more at $1.40 or so,but still lost heaps.

[Under Surveillance]

SO LETS SAY WITHIN THE ROUNDINGS THE NZX50 IS AT ALL TIME HIGH
You can say whatever you like. The NZX50 is a gross index, so increases to reflect the dividends paid by the companies included in it. 4320 in July 2007, increased by almost 6 years of dividends, amounts to somewhere in the (mid?) 5,000s today. Getting there will be an all time high worth shouting about.

[winner69]

You can say whatever you like. The NZX50 is a gross index, so increases to reflect the dividends paid by the companies included in it. 4320 in July 2007, increased by almost 6 years of dividends, amounts to somewhere in the (mid?) 5,000s today. Getting there will be an all time high worth shouting about.

agree with you matev..... but why ruin a good story ..... good news = excited punters = risining prices ..... and TEL might even go up

[voltage]

Isn't this interesting, 6 years to recover to 2007 prices. COmpare with property, Auckland prices well ahead of 2007 prices and this does not reflect income from rent. I see why people invest in Auckland property

[winner69]

This UP UP AND AWAY is fun .... seems to have been UP UP AND AWAY for so long now

Even today HNZ and PGW both go up .... maybe irrational exuberance does exist

But long may it continue .... the UP UP AND AWAY bit anyway

NZX50 closing in on 4400 ... and then 4500 .... and then 5000 ... and maybe 5500 by xmas ... that be something to look forward to

What can stop it going up ... not much .... everybody whose any good at things seem to making plenty of money (even WHS) .... punters are happy as and prepared to buy buy ...... and all those good things

UP UP AND AWAY

[troyvdh]

Dear moosie.....OCR re rating upwards....doubt it ..given more than a few folk have predicted that the NZ% ...may top ...what 85-90 cents this year....I agrre all this looks bubblish....no doubt....you are right about a "nearly" over heated property MKT...but I thought that prices were now at 2007 levels....
....I heard that NZ houses have risen at 7 % average annually for over 50 years ...am I wrong..????....

What does intrigue me is despite the views of Morgan,Hawes,reserve bank,Hickey.....property/houses....just keep on increasing in value....and let us not forget folks that some have predicted the cost of "leaky homes" may well be greater than the CHCH earthquakes !!!!!

[percy]

This UP UP AND AWAY is fun .... seems to have been UP UP AND AWAY for so long now

Even today HNZ and PGW both go up .... maybe irrational exuberance does exist

But long may it continue .... the UP UP AND AWAY bit anyway

NZX50 closing in on 4400 ... and then 4500 .... and then 5000 ... and maybe 5500 by xmas ... that be something to look forward to

What can stop it going up ... not much .... everybody whose any good at things seem to making plenty of money (even WHS) .... punters are happy as and prepared to buy buy ...... and all those good things

UP UP AND AWAY

I expect savy investors will be buying HNZ and PGW at present for the divies.
Some irrational investors,who do not hold ,will miss the SP growth.
However, it be seen that these two "ships" will stay afloat when/or if the tide goes out.
I had a very pleasant lunch in Timaru today at "The Heartland cafe."
The most traffic I have ever encounted on the road.Thought there must have been another earthquake,as there were so many cars coming from Chch.When I stopped for petrol there were just as many going to ChCh.At lot of activity all around mid-Canterbury.I also enjoyed great sales.

[Hoop]

What Belgarion said. You make your money when you buy. In times of panic, there are four times the sellers there are buyers, meaning you can get as much of what you want, as cheaply as possible......

Yes it easy in hindsight but as one of the very few that made money during the last 2008-2009 bear cycle (I made +3% capital gain) it came at a great personal cost... I spent countless hours (which in hindsight money in the trading account earning 8% would have been a lot easier).....Also nearly everyone I knew stop talking to me share-wise as I was running against the herd and everything I said no-one really believed....I was a social investor leper...

Buying into panic I never did...the dreaded C wave one should avoid like the plague ...as everything is irrational...buying at very cheap fundamentals may see you buying only halfway through the wave...still burning you ditch losing 20% in a matter of a couple of weeks holding out that long awaiting the bottoming process to kick in it didn't and youre mentally tortured into delusional status......If your "luck" in and you're still in when the market climbs again, you still could lose as the bear cycle rally peters out well below fundamentals and expectations....usually a profit below what you originally lost ...the market disappoints and away down you go again....

Would I fully invest in the next bear market cycle...With all the hard work done I now have a good set of indicators including the 100% success rate of the Copper indicator finding the end of Bear cycles...and the answer is still No.....

The best time I make the quickest money is strangely not at the exuberance mature end of the Bull market but during the earlier "climbing the wall of worry" phase of the Bull market the period after the "bottom" (as indicated by the copper leading indicator)...Everyone advises you not to invest during this early bull market phase..as the world is doomed and its in a lull before the next big catastrophic implosion...................mehhh... Nah...Don't believe any of ya... where's my wallet

But hey what do I know:mellow: ..different individual Investment Strategies reveal different results.

[Vaygor1]

What Belgarion said. You make your money when you buy. In times of panic, there are four times the sellers there are buyers, meaning you can get as much of what you want, as cheaply as possible.

My logic is that "the meteor always misses the planet", so when people panic over Greece or Italy or some other silly country, I think to myself "How will the possible risk of a Greek exit from the Euro and political unrest affect Ryman's ability to sell retirement units to the queues of people lining up at the Evelyn Page village in Warkworth? And then I buy.... :-) Two weeks later, everyone has forgotten about Greece, and Ryman is up 5%.

Yes Sparks, Fear and Greed versus considered risk & strength of ones convictions.... short term versus long term.

When September 11 occurred, I made some of my best ever bargain buys in the NZX. One could even argue that in this case the meteor hit the planet.

One such buy was PowerCo (then PWC, before the New Plymouh District Council completely botched up and sold it all to Prime Infrastructure). I remember asking myself, "How does two planes crashing into these buildings in Manhattan New York affect the general NZ public turning on their electric blankets at night?" and with about 2 seconds of thought decided the answer was "It cannot".

I swooped in for all I was worth... even briefly made the top 20 shareholders list some years later partly as a result. Just like RYM, I would never have sold a single share in PWC if I had had the choice.

[Stranger_Danger]

Couldn't disagree more. Quite happy for another bubble and pop! I've made far, far more from the GFC than I ever had and thats compared to 30+ years in the stockmarket. I just love recessions. They're easy to recognise, plenty of time to sell out before them, and bargains aglore in the bottoming process.

Sorry if I sound like a vulture (hyena even) ... but as I've said ... I don't make the rules ... I just have to live with them.

I know what you mean. I've made way more (multiples) since 2007 than I'd accumulated prior.

The thing is, you don't need to be perfect - just generally right.

I came into the GFC mainly in cash - so I got it generally right, but still took a few bumps.

I started doing a bit of buying - was a bit early, so generally lost money for a while.

I did more lots more buying, but in general and in hindsight, I wish I'd been more aggressive as I never got down to a zero cash position.

As you say, recessions (esp after long term credit buildups) are big picture things that, in general, you can expect - you just can't nail the exact timing.

Frankly, I'm finding this market way harder. Every idiot I know is starting to buy shares for the first time in 5 years. A friend recently bought a share for $9.00 that I recommended in 2008/9 at 50 cents. He proudly said he'd followed "my recommendation".

Actually, I'm about to sell it. Sigh.

[winner69]

Why worry when the world is all positive and markets are booming ......fundamentals don't matter .....it doesn't matter whether stocks at are selling at 20 times plus sales .....it doesn't matter if fundamentals don't support valuations ( the old fashioned way that is) ..... As long as things are going up ...and the government is selling things off so cheap instant riches can be made ... As long as house prices are rising and we all feel wealthy .....things will continue to go up

UP UP AND AWAY and don't worry when all this will inevitably end

but keep on eye on charts ... That's the sentiment measure

[Hoop]

Belg I've been yelling out NZSX50 - Good News for some time now :) as has Winner....but the signs of a mature Bull market are now upon us


The NZX 50 rose 20.54 points, or 0.5 percent, to 4354.02, the highest since the index it was created in 2003.

This break into blue sky signals more up up and away

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX08032013.png




(http://www.nbr.co.nz/article/market-close-nzs-benchmark-nzx-50-charts-new-record-diligent-soars-bd-137030)

[BIRMANBOY]

Dont you just love it when the charts do what you want them to do;). So what do the tea leaves (sorry charts)say about the next year please. I'd like to plan out my buying and selling.
Belg I've been yelling out NZSX50 - Good News for some time now :) as has Winner....but the signs of a mature Bull market are now upon us


The NZX 50 rose 20.54 points, or 0.5 percent, to 4354.02, the highest since the index it was created in 2003.

This break into blue sky signals more up up and away

http://i458.photobucket.com/albums/qq306/Hoop_1/NZX08032013.png




(http://www.nbr.co.nz/article/market-close-nzs-benchmark-nzx-50-charts-new-record-diligent-soars-bd-137030)

[Hoop]

Dont you just love it when the charts do what you want them to do;). So what do the tea leaves (sorry charts)say about the next year please. I'd like to plan out my buying and selling.

Birmanboy... this is a Sharetrader NZSX 50 - good news thread..The objective is for ST Posters to share ideas their knowledge and add useful information to help all of us to invest successfully... ST readers are cautioned that posters views are their own and that each reader should do their own analysis before they invest.....ST threads help to alert us what we may have overlooked or a comment worthy of pursuing further...Some people don't use some investing disciplines mentioned and quietly go about their own investing disciplines..they may not agree but they respect the rights of free speech to all ....sometimes there's humour and that brightens up your day........however sometimes you get an individual or two that write nonsense, uninformative, insulting posts with the sole purpose to make a certain posters day a misery................

Hmmmm ....I believe in democracy and the right of free speech ...so I guess I have to put up with this cr@p

[BIRMANBOY]

Dear , dear dear are we having a miserable day Hoop? Humour yes, insulting no..however if you do believe that then may I suggest you go off into the lounge and have a nice cup of tea.. Dont kick the cat please. You seem a tad sensitive re TEL as well. Anyway rest assured there is no vindictiveness in what I say or do..all good fun and thats my nature to question "authority" and certainly take no pleasure in thinking to make you miserable. Am I going to stop? Well no, but feel free to have a dig at me if you want. My fur is thick.
Birmanboy... this is a Sharetrader NZSX 50 - good news thread..The objective is for ST Posters to share ideas their knowledge and add useful information to help all of us to invest successfully... ST readers are cautioned that posters views are their own and that each reader should do their own analysis before they invest.....ST threads help to alert us what we may have overlooked or a comment worthy of pursuing further...Some people don't use some investing disciplines mentioned and quietly go about their own investing disciplines..they may not agree but they respect the rights of free speech to all ....sometimes there's humour and that brightens up your day........however sometimes you get an individual or two that write nonsense, uninformative, insulting posts with the sole purpose to make a certain posters day a misery................

Hmmmm ....I believe in democracy and the right of free speech ...so I guess I have to put up with this cr@p

[Aaron]

Dont you just love it when the charts do what you want them to do;). So what do the tea leaves (sorry charts)say about the next year please. I'd like to plan out my buying and selling.


Originally Posted by Aaron
How can you position yourself within the current market if you aren't looking to the future?

By making sure that you are in the market when it is rising and out when it is falling. You don't know what the future holds, and you don't need to. Your actions simply need to be in synch with the market. The only certainty is that uptrends (and downtrends) do not last for ever.


Originally Posted by Aaron
No-one can see the future but you can form an opinion based on what you read and hear.

Sure you can - but it is not necessary to have such an opinion in order to invest profitably. What I am describing here is a reactive approach rather than a predictive one.

These are some answers I got regarding TA from an old poster. I am not a chartist but TA is only really about price trends and reacting to them as far as I understand. Scary if you don't understand the fundamentals behind the company you are invested in when the markets is swinging wildly but handy if you want to be in and out. More about sentiment than the economy or business. I guess the chartists are indentifying a price trend and profiting from it.
If this old poster is to be believed he was successful enough to retire and the arguements he put forward for TA usually sounded pretty reasonable to me.

[percy]

Birmanboy... this is a Sharetrader NZSX 50 - good news thread..The objective is for ST Posters to share ideas their knowledge and add useful information to help all of us to invest successfully... ST readers are cautioned that posters views are their own and that each reader should do their own analysis before they invest.....ST threads help to alert us what we may have overlooked or a comment worthy of pursuing further...Some people don't use some investing disciplines mentioned and quietly go about their own investing disciplines..they may not agree but they respect the rights of free speech to all ....sometimes there's humour and that brightens up your day........however sometimes you get an individual or two that write nonsense, uninformative, insulting posts with the sole purpose to make a certain posters day a misery................

Hmmmm ....I believe in democracy and the right of free speech ...so I guess I have to put up with this cr@p

I always find your posts very helpful and are usually a great wake up call for me. You are one of only a few posters who I admire,so please keep up your well thought out informative posts.

[winner69]

Hoop, Percy and others, I thought I'd share a small tale from my past.

It's been my privilege to meet some very interesting and highly wealthy businessmen in New Zealand. One such businessman who I will call Mr Rothschild, was a VERY significant property owner and philanthropist.

One day, it was my misfortune to suffer a personal setback of considerable importance to me at the time. The blow was softened a lot when I received a phone call from Mr Rothschild who said:

"Now Sparky, I want to give you some advice. You need to understand, there are a lot of f*ckwits out there. Everywhere you look, you can find f*ckwits. You need to live your life accordingly."

It was some of the best advice I've had. I've taken steps to remove a large number of f*ckwits from my life, which has permitted me to prosper in business and investment, and enjoy even better time with my family.

Good story sparks ........ Obviously time for me f#ck off from here before you remove me

Cheers

[Lizard]

I always find your posts very helpful and are usually a great wake up call for me. You are one of only a few posters who I admire,so please keep up your well thought out informative posts.

Well said. :)

[Lotto]

Birmanboy...you've gone down in my estïmation

Quote----- from your post
"Dear , dear dear are we having a miserable day Hoop? Humour yes, insulting no..however if you do believe that then may I suggest you go off into the lounge and have a nice cup of tea.. Dont kick the cat please. You....


I dont get much of a chance to check this site out but when I do I like to see construction thoughts from different walks of life regarding investing. (not the rubbish some posters like to post and think its funny) Its a sure way to drive posters away and not post at all.

Keep up the good work HOOP

Cheers

[Hoop]

http://www.stuff.co.nz/business/industries/8411045/Drought-raises-fear-of-return-to-recession

Finance Minister Bill English said yesterday that the Treasury was having to rework its forecasts to take account of the economic hit - and that would further affect the Government's books.

"There is going to be significantly less farming income, and that will affect the tax take in the short term," he said.

Gross domestic product would also shrink.

The 2007-08 drought had a $2.8 billion economic impact, in on-farm and off-farm costs. Some estimates put the current drought at $1b-plus, and Federated Farmers says the cost is growing by the day.

Food for thought

The end of the stock market party due to the drought?...could be???.. but possibly not.... there could be an Equity Market "paradox" situation emerging ....
Reason
The Reserve bank was coming under pressure to signal an earlier date to start hiking interest rates..with this drought becoming an economic menace, the threat for fiscal tightening may now not be announced on Thursday...it will be delayed methinks. Any RB action will be "instant".....the Equity markets like loose fiscal management as witnessed at Wall St with the QE series.
The lack of "potential" money because of drought is not "instant" its a trickle down economic threat for NZ ....the question will be how far down it will trickle?? ..all the way down to the "city dwelling" retail customer??? ..this drought has a "delayed" effect..so maybe its too early for the Equity market to be concerned about these future situations.

Thoughts?

[BIRMANBOY]

Your estimation of me is somewhat suspect since you dont appear to know the difference between construction and constructive but thats fine. I respect you for having the balls to post what you think. By the way it may have escaped the attention of all the PC posters that questioning or contrary ideas or concepts are an excellent way of keeping threads going, making people think through their positions and open up to the possibility that there are many different ways to "skin a cat".....and it gives me a lot of pain to mention that phrase. I hope Hoop keeps up the good work.
Birmanboy...you've gone down in my estïmation

Quote----- from your post
"Dear , dear dear are we having a miserable day Hoop? Humour yes, insulting no..however if you do believe that then may I suggest you go off into the lounge and have a nice cup of tea.. Dont kick the cat please. You....


I dont get much of a chance to check this site out but when I do I like to see construction thoughts from different walks of life regarding investing. (not the rubbish some posters like to post and think its funny) Its a sure way to drive posters away and not post at all.

Keep up the good work HOOP

Cheers

[gv1]

I always find your posts very helpful and are usually a great wake up call for me. You are one of only a few posters who I admire,so please keep up your well thought out informative posts.
Couldn't agree more. keep up the good work sparky.

[amalgam]

I have been investing on the stock market for many years & make a point of reading the posts on this site. I value the positive posts of Hoop, Snoopy, Sparky, Percy & others--in many cases information gained has helped me make trading decisions. Please keep up the good work as without these informative posts this this site would I am sure have far fewer followers

[BIRMANBOY]

Hoop I'd like to offer you opening (free) membership in the H.A.S. Thats the Hoop appreciation society. We have a heap of H.A.S."s out there (and hazards) and its only fair that they have the object of their affection in a leadership position. So you may well ask whats in it for me..being a HAS? One free chart per month of your choice, a hot tip for either Ellerslie or the NZX (your choice) and lastly a nice cup of tea with John/John. So are you in? Are you a H.A.S. or a H.A.S.N.O.T. (Hoop Appreciation Society no thanks.) PS. for any posters who cannot tell the difference from humour to insult..please note that this is, in fact, Humour. Now you may well say thats not funny at all...and I can appreciate that some people may be humourly challenged (to coin a phrase). To all those posters I hereby sentence you to contant reruns of "Agent Anna" ..that should reorient your postion on "humour".

[CJ]

The surge in house prices which were highlighted in the REINZ report yesterday may well force the RBNZ's hand early though. They will be pretty concerned about that, more so I imagine than keeping interest rates low to stabalise the economy from any negative shock caused by the drought.I'd go the other way. I think they will be more concerned about the drought, and the flow on effect of less farm spending, that house prices.

They are looking at new measures to counter housings effect but they aren't expected to be inforce till next year - ie. high capital ratios for banks and LVR limits.

[CJ]

My view is based on the Drought having more flow on effects to the wider economy than increasing house prices (which while is a bubble, is more self contained). The dollar is still up with no sign of dropping.

However, I have seen some good 3 year rates recently though and am wondering if I should lock in.

Will be interesting to see which way they go.

[BIRMANBOY]

Moosie having feelings is fine for your partner but is just silly if you are a trader. Of course it has somewhere to go...either up or down. If enough of you get scared it will go down and if you all hold your nerve it will go up. Simple mechanics. Thing different now is a lot of kiwisaver and ACC money and new floats coming up so I think its got life left for a while.
Always happy to discuss turmeric ;)

I have a gut-feeling the market is becoming overcooked (ours as well as overseas). Anyone else getting that feeling that it has nowhere left to go now? I don't really have anything to back this all up, just the feeling!

[CJ]

Thanks for that turmeric. Still no OCR change in this year. I still think that may change as the NZ and world economy picks up again.

"The best laid plans usually go to naught"...You could be right with him talking up the Drought to get the dollar down. I still predict no movement this year. Staying floating for now.

[tosspot]

tomorrows friday which usually means sell off day. I think the market will be down tomorrow after todays gains from profit takers

[tosspot]

Cool, perhaps someone will sell some quality shares to me at a cheaper price....
Thats the one, I hope to snag some PEB at 72c

[JohnnyTheHorse]

Thats the one, I hope to snag some PEB at 72c

Still plenty of volatility to go before that announcement I suspect, I'd be setting my sights a bit lower. She's a tough one to predict though!

[winner69]

John Key says NZ economy is on fire ..... so it must be eh

[CJ]

John Key says NZ economy is on fire ..... so it must be ehAre you sure he wasn't refering to fires in Northland due to the drought ;)

[Anonymous]

Some interesting points from Brian Gaynor at the end of todays piece on XRO:


Recent comments that the NZX is at a record high are clearly ridiculous because a gross index (capital plus dividends) has been used to reach this conclusion, whereas all of the world's major sharemarket indices are capital only.Why should we use a gross index to measure a record market high when we don't add all earlier dividends to the share price of an individual company to determine its high point?
The NZX50 Capital Index closed at 2467 on yesterday, compared with its record high of 3969 in September 1987. Thus, the market is still 38 per cent below its peak when measured under the more traditional and accurate capital only method.
The NZX50 Capital Index appreciated by 18 per cent last year, compared with 116.8 per cent in 1983, 12.7 per cent in 1984, 31.4 per cent in 1985 and 99.2 per cent in 1986.
We are a long, long way from the euphoria and excesses of the mid-1980s.

"We are a long, long way from the euphoria and excesses of the mid-1980s"

[Hoop]

Although it does pertain to the US, Alan Greenspan thinks basically the same about the US stock market as Brian Gaynor thinks about the NZ one. He [Greenspan] considers US stocks are still cheap (based on historical metrics) and the current lift in the markets over there is far from the irrational exuberance that was seen during the dotcom and previous share market excesses. Given our markets tend to broadly follow the US markets, I find that very interesting.

http://www.cnbc.com/id/100556999

It would appear to me that those who have brought into US stocks (the good companies that is) between 2009-2012 have had a once in a generation opportunity to make some serious wealth going forward.

Hi David
You may want to see my response ..its over at the Investing strategies and secular bear markets thread (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets&p=398167#post398167)
Note though that Wall St factors are different to NZSX nowadays.....there was a time back in 2007/2008/2009/2010 when a large number of Global Stock Market indexes with differing ocillation frequencies all went into sync creating the rare "Perfect Storm" event... There was a Time back then when the ASX and S&P500 mirrored each others activity

Relying on another markets results for guidance now is far less accurate past a few days duration.. as the market oscillations are now out of sync and some are in different market cycles.

[noodles]

Although it does pertain to the US, Alan Greenspan thinks basically the same about the US stock market as Brian Gaynor thinks about the NZ one. He [Greenspan] considers US stocks are still cheap (based on historical metrics) and the current lift in the markets over there is far from the irrational exuberance that was seen during the dotcom and previous share market excesses. Given our markets tend to broadly follow the US markets, I find that very interesting.

http://www.cnbc.com/id/100556999

It would appear to me that those who have brought into US stocks (the good companies that is) between 2009-2012 have had a once in a generation opportunity to make some serious wealth going forward.

Yep, they are cheap compared to 1987 and 2000

[biker]

Once again the market has been leaked information before it is available to the public. Take a look at BBG on the ASX and how it has fallen for the last half hour as insiders bail before a bad announcement. Unbelievable that this continues to happen. I'm glad I have stuck with the NZX and don't lose my money to those Ozzie shysters...

Trading halted and still no announcement. What a shambles!

[Whipmoney]

Although it does pertain to the US, Alan Greenspan thinks basically the same about the US stock market as Brian Gaynor thinks about the NZ one. He [Greenspan] considers US stocks are still cheap (based on historical metrics) and the current lift in the markets over there is far from the irrational exuberance that was seen during the dotcom and previous share market excesses. Given our markets tend to broadly follow the US markets, I find that very interesting.

http://www.cnbc.com/id/100556999

It would appear to me that those who have brought into US stocks (the good companies that is) between 2009-2012 have had a once in a generation opportunity to make some serious wealth going forward.


I would take whatever Greenspan says with a grain of salt. He also called the US property bubble "irrational exhuberance" and failed to take any steps to address it. Further to that he also conceded regulation of the US derivatives market is probably a good thing but failed to implement it as it went against his staunch free-market ideology.

[Silverlight]

This week I have liquidated almost 35% of my NZ shares, equally across my positions, the market has rallied almost 40% in the past 18 months, and my own portfolio well ahead of this.

While this may not be the top, this has to come off at some point, whether an internal trigger (low gdp, another earthquake :(), or an external trigger (eurozone, north korea etc), something is going to push prices down again in the medium term. Guess its a great time to sell MRP, but might not work out so well for the buyers...

[Hoop]

This week I have liquidated almost 35% of my NZ shares, equally across my positions, the market has rallied almost 40% in the past 18 months, and my own portfolio well ahead of this.

While this may not be the top, this has to come off at some point, whether an internal trigger (low gdp, another earthquake :(), or an external trigger (eurozone, north korea etc), something is going to push prices down again in the medium term. Guess its a great time to sell MRP, but might not work out so well for the buyers...

In Britain Germany and USA many investors sense a top..In America the permabears noise is deafening. Italy and Spain index charts are showing a bear cycle with sell signals...There could be more bad news coming in this Italy/Spain/France area
Back in good ol NZ this unsustainable steep rise is just keeps on keeping on and everyday I get the heebie Jeebies just watching this unbelievable rocket heading into blue sky territory .....and some of us sense something has to give soon....emotion emotion... I keep thinking of a Manhattan chart image !!!!....

At this point of time there are no chart problems but some of my stocks show signs of weakening...The line to watch is the 4340 support.

Silverlights taking profits too soon is never a bad idea as there are buyers around..it locks in capital gain and lowers the overall capital loss risk....I'm very tempted to follow.

http://i458.photobucket.com/albums/qq306/Hoop_1/nzx5002042013.png

[Hoop]

This week I have liquidated almost 35% of my NZ shares, equally across my positions, the market has rallied almost 40% in the past 18 months, and my own portfolio well ahead of this.

While this may not be the top, this has to come off at some point, whether an internal trigger (low gdp, another earthquake :(), or an external trigger (eurozone, north korea etc), something is going to push prices down again in the medium term. Guess its a great time to sell MRP, but might not work out so well for the buyers...

Agree...
Sold down some today and realised my capital gains (Liquidated about 15% NZ shares)
My cash doesn't look destined to be going MRP way now either .....

[Hoop]

Go away in May ???

Don't I wish ...love to escape the NZ winter :)..

The old "Sell in May and go away" saying has been proved to be fairly relevant for Wall St over the past 100 years or so when "available money" is lowered due to less trader activity around the Summer Holiday period... I mentioned this "Halloween Effect" on Post #169 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page12) and Phaedrus responded with Post #172 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page12) proving through his Metastock backtesting that the NZX didn't suffer from this same fate (He called it Twaddle :D) as its performance over the previous 8 years came in last place just losing out to the buy and hold strategy....

However this time around NZX oscillations are more in line with Wall St ...both have old age cyclic bulls so perhaps the "Halloween Effect" odds for the NZX may be higher...who knows..

[CJ]

However this time around ...

:) :) :) :) :)

[Hoop]

These weren't the type of birds Belg and I had in mind.......obviously we must be too old ?

[BIRMANBOY]

You could get your share data ready for the accountant?
Google's your friend on that front ;)

Anyone have any stocks to watch today? Have another slightly boring day ahead of sitting at the desk all day!

[BIRMANBOY]

Impressed.
Already done ;)

[CJ]

Risk on today people. Act accordingly!Stupid question time - what exactly does that mean? Does it relate to the good day on the US markets so you expect a lot of movement today?

[BIRMANBOY]

With a moose at the tiller I wouldnt count on that.
A rising tide floats all boats ;)

[winner69]

Still feeling this way about the NZD? I believe we are heading to 90.

Isn't it great having a strong dollar ... we should be proud of it ... the world sees NZ as a great place .... can't get better than that

Why not stop at 90 .... parity would be a good place .... but then again 1st time I went to the states it was about 117

[Hoop]

Rule of thumb:.... a rising currency rate usually reflects better health of that Country's economy compared to its Trading partners.
Why fight wealth creation ...try enjoying it while it lasts.

[Silverlight]

Interesting, so you are saying you expect medium term trends of a weakening NZD vs the USD, AND gains in US/global equity markets? I just don't see the two as compatable, on or the other in my opinion.

Absolutely correct turmeric, the NZD strength and global equity strength (http://finance.yahoo.com/q/bc?s=NZDUSD=X&t=5y&l=on&z=l&q=l&c=%5EGSPC) are one of the strongest correlations, especially relevant for NZ's investing overseas.

If anything the NZD dollar has some catching up to do or the S&P500 needs a correction.

[Hoop]

Except that I imagine you'd find 9 out of every 10 analysts saying our $ is artificially overvalued, therefore even if your rule of thumb holds, our exchange rate is not a fair reflection of the relative state of the NZ economy.

When a market moves in a way that analysts don't expect or find it hard to comprehend the all the verbal terms start flying such as overbought, overvalued ,manipulated, undervalued, bubble,artificial.......remember all markets have to adjust to all situations macro and micro.......free or regulated or bits of both....
It doesn't matter if its claimed to be artificial as all markets have artificial macro and micro elements operating within itself all of the time and as much of this regulated or manipulated actions are attached to theories such as fiscal or monetary or various other factors the market are therefore cyclic in nature as the various factors usually repeat themselves over the very long term.
-

The Reserve bank article below showing the real NZ$TWI (green line) suggests the NZ Dollar at its high point of its cycle..ATM it still isn't different this time to any other high points over the previous 40 years as some analysts suggest.........as I said enjoy your wealth while you can....as all trends end at some point.....

Interesting scenarios seen in the Chart below is the flight of money out of NZ to "safe" havens during times of a Global crisis. 1976 1984 1992 2001 2008.... NZ$ is definitely not considered as a safe haven and is severely punished during these times...........

Turmeric..I guess you and the other 12 analysts would then say NZ$ would be artificially undervalued during these crises situations...eh??;)

------------------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------------------


http://www.rbnz.govt.nz/keygraphs/Fig8b_large.jpg (http://www.rbnz.govt.nz/keygraphs/Fig8.html)
Over the long haul, the New Zealand's nominal exchange rate (trade-weighted index - the blue line) has tracked reasonably closely to New Zealand inflation relative to the inflation experienced in the domestic economies of our major trading partners (the red line) - as inflation has increased relative to that of New Zealand's main trading partners, the nominal exchange rate has depreciated. In terms of the divergence from a long-run average (the black horizontal line = 100), the real exchange rate (the green line), which is the blue line divided by world prices/NZ prices (the red line inverted), has for most of the last forty years cycled within a range of ten percent either side of the long run average.
Chart data may be downloaded by selecting the download data (http://www.rbnz.govt.nz/keygraphs/graphdata.xls) link.

[BIRMANBOY]

So Hoop whats your prognosis of where the NZX may start a real turn?

[Hoop]

So Hoop whats your prognosis of where the NZX may start a real turn?

I'm starting to feel pessimistic now... The NZX has had a steep uptrend for 9 months without any significant corrections...that amount of time for such a steep rise is fairly rare and as the uptrend carries on day after day some stocks are hinting weakness probably some investors are playing it safe perceiving the risk part of the risk v reward equation is becoming rather high for them atm.

[winner69]

Seems a distant time since the NZD touched 39 cents way back in 2000/2001...

and even more of distant memories like back in the good times when it was 1.48 in 1973 .... I remember it well

[Lawt]

Hoop, I don't believe shares are "fully valued" or "over-valued", but clearly they are not cheap buying right now. People are getting enthusiastic about owning shares again, which is good in some ways, but obviously some are bunnies who will get burned.



My predictions

We have just been through a recession apparently. Most companies that are still arround now have leaned right out and are well placed to avail themselves of any recovery - which is going to be big and long.
The recovery is being driven by the Christchurch rebuild (all that money coming in and we didn't have to earn it, makes me wonder how on earth the exchange rate will drop in the next few years) and the fact that most people in Chch and Auckland are getting richer by the day thanks to the property boom (thanks again Chch). Construction is obviously benefitting from the rebuild and as people feel comfortable with spending on deferred maintenance etc. As well retail is on an upswing as a result of the confidence. Look at new car sales, this shows people have confidence.

Construction is going to go nuts, the govt want all commercial premises inspected and earthquake compliant. Whilst many are compliant already there are huge areas that aren't. K'rd, kingsland, ponsonby, dominion rd for a very small example. Even if the govt back off on this insurance costs will see to it. So construction is going to be busy for 5 yrs yet. This is going to impact house prices over that time, I really can't see house prices "bursting" anytime soon. - So people are going to stay "rich". When people are feeling wealthy, they are happy to spend. So - As you say shares are not cheap - but next year (and the year after and the year after that) current prices will look that way as companies profit as a result of the recovery matches pricing.


That said, Interest rates are low right now, this tends to move money into shares for a couple of reasons. One can get a better return on shares and you can borrow against the mortgage and make money on shares.
Interest rates wont stay low forever, the govt will insist on trying (unsuccessfully) to take the heat out of the housing market and invariably rates will rise. When this happens low yielding stock will be hit hardest as a result. So I would expect a correction as interest rates rise, but if you are in for the longer term I don't see any issues over the next 3yrs. Been buying WHS lately so the money is where the mouth is, be interesting to see if I am right.

Disclaimer: I know nothing and anyone who takes my advice is crazy.

[Lawt]

Agree with you, except for the OCR upping not having much impact. That will bring some people back to reality in the housing market.



Oh sure it will, some will really struggle with it and there will be much pain for them. But I really can't see that house prices will go below cost of replacement, which if I am correct is going up and up over the next 5yrs.
A couple of qualified carpteners that I know have just out of the blue each got 20% pay rises. Timber and Steel have both gone up as a result of Chch.

[Hoop]

Hi Hoop,

For the most part I agree with what you are saying. Where I disagree is your inference that the exchange rate is moving in ways that analysts don't understand and that is why it is being are labelled as overvalued. I sat down and had a chat with one of the e-rate specialists from the Reserve Bank the other day and I can assure you those guys have a very good handle on what is driving our dollar.............

Yeah sorry about that... Very hard to write a short simplified post on ST without suffering some effects of lost in translation....I personally have the people at the Reserve Bank of NZ in high regard .. They have handled the GFC from the NZ point of view extremely well.. We people in NZ have a lot to thank them for.. It seems from our favourable outcome that their modelling have been excellent..and I acknowledge their genuine concern when their modeling throws up warning signs when the higher NZ$ in factored in.

My referral of analysts statements were of the "garden variety" kind outside the Reserve Bank who may have personal agendas such as those with some overseas currency elements within their investment portfolios ......which they possibily may have increased their weightings on when the dogs started barking overvalued NZD a year or so back at 77c......there's no sinister inferences by me....we all realise that certain professions profit with a lower dollar ...farmers and exporters are the two that become very noisy and hit the moral high ground saying lower the dollar for the "common good" of the Country ......

I'm not a die hard free marketer as I too believe intervention by some means (qe) to Lower the $ is good for the economy for the short term and especially needed during periods of crises.. Unfortunately I'm old enough to remember the bad ....Muldoon was an expert at QE and the public of NZ allowed him to mis-applied it in election years ........However I've been on this Earth long enough to see that in the long term its not necessarily a good thing.

Overstating the simple..those relying on lowering the $ all the time become lazy and lose touch with their markets. That competitiveness and innovation to improve and grow within the marketplace falters as does communication channels within the markets needed to self correct... creating that false logic and proof that invention is always needed ...NZ has been down that track and nearly ended up defaulting and it has taken a long time to claw our way back up in the global rankings....All the top brains realise this.....however as long as the crises remains, I guess intervention and protectionism for self survival takes paramount and NZ will just have to suck it up until the markets self correct...this requires the application of disciplined long thought of contingency plans and patience rather than the noisy media demanded layman knee-jerk ..eh?


Hi Hoop,

.....That essentially the NZD is facing unprecedented pressures from QE easing, primarily coming out of the US, but also Europe and now Japan. Our dollar is at the mercy of this type of monetary policy and has become overvalued as a result. ...
Agree sort of ...unprecedented...no ...This time around QE has been much more intensely applied (more players involved.. Japan joining the party they should've done it 20years ago but that's another story) that is understandable as this has been the biggest Global crisis in recent history and it is going to take a longer period of time than normal to turn this juggernaut around.

Agree NZ is at their mercy...always have been always will be...the typical problem of a small country with a small economy of scale forcing it's economy to be reliant on one market..that is some of the reasons why NZ will not have safe haven status and will have to forever endure currency fluctuation (a cycle with high frequency oscillations)..NZ has endured 150years of this repeated cycle ...the media noise at the moment suggests nothing has been learn't by the major populace.


Hi Hoop,

.....That essentially the NZD is facing unprecedented pressures from QE easing, primarily coming out of the US, but also Europe and now Japan. Our dollar is at the mercy of this type of monetary policy and has become overvalued as a result. Under these circumstances this is not a reflection of the strength of the NZ economy.

I don't see it that way...Tumeric..view the situation from another angle and it becomes clearer....say for example...
If NZ was affected as badly as USA or Europe... Overseas investors would be thin on the ground those already invested in NZ would have taken flight.
There would be a surplus of NZ dollars (due to capital flight) The surplus would lower the currency to point where risk < reward (yield rate) and the surplus evaporates... NZX would be a lot lower (probably be in a bear market as happened to the AORDS last year when Aussi RB failed to ease) due to less available money and surplus of sellers competing for that money...and ditto with the property market...higher interest rates to attract overseas money to replace expiring debt/bonds etc...which creates more risk of a possibility of a self fueling downward spiral of unattractiveness for Equities and property.,,,eg Spain

Looking at above scenario I think NZ attracting investors whether its our companies or our markets (dairy, film industry etc) and still willing to buy in with our appreciating NZ$ indicates to me that the NZ economy is showing or "perceived to show" strength.

[winner69]

All I want is the $ to go even higher ..... the higher it goes the bigger my bonus .... selfish aren't I ..... but then again as a country we should proud of having a high dollar as Hoop says it 'perceived to show' economic growth

[CJ]

LOL, seems quite the opposite of the dictatorship they would enforce nowadays! :pA bit of political history for our Canadian friends:

In 1984, Richard Prebble was Labours Minister of Finance - he later formed the ACT party so yes, Labour have changed quite a bit!!!

[Lawt]

A bit of political history for our Canadian friends:

In 1984, Richard Prebble was Labours Minister of Finance - he later formed the ACT party so yes, Labour have changed quite a bit!!!

Ah how about a bit of political history for our NZ friends. I think you may mean Rodger Douglas.

[CJ]

Ah how about a bit of political history for our NZ friends. I think you may mean Rodger Douglas.My bad - buy in my defence I wasn't voting age at the time and those two always seemed to go hand in hand. Though I think you will find it is (now Sir) Roger Douglas

[Hoop]

Hi Hoop, Yeah I think we are on more the same page after reading your views. A couple things though:

I can see that I didn’t word my thoughts very well re the strength of the NZ economy. I agree with you that the NZ economy is showing strength. Improved domestic conditions combined with continuing global economic strength (and hence increased appetite for risk) are certainly contributing to rise of the NZD. I did not mean to imply that the only reason the NZD is rising is due to QE nor that the NZ economy is not showing strength, it certainly is. My main point is that we need to be careful when disentangling all these effects. IMO the greatest of these is due to QE and therefore if we were to use the strength of the NZD as a proxy for the strength of the NZ economy we would be overstating our economic strength.

The only other thing is your comment re post GFC QE not being unprecedented. I am no economic historian so happy to be educated here, but as I understand it QE post GFC is unprecedented in terms of the magnitudes of money it has involved, both from the US and Europe and now by Japan. When was this level of QE ever implemented previously?

My main point is that we need to be careful when disentangling all these effects. IMO the greatest of these is due to QE and therefore if we were to use the strength of the NZD as a proxy for the strength of the NZ economy we would be overstating our economic strength.

Yes agree....there is a danger that NZ economy could be overstated when the major countries apply QE (side-effect?)..... QE crtics seems to think there's some evidence that one QE side effect is a rising stockmarket to well beyond its fundamentals ..




The only other thing is your comment re post GFC QE not being unprecedented. I am no economic historian so happy to be educated here, but as I understand it QE post GFC is unprecedented in terms of the magnitudes of money it has involved, both from the US and Europe and now by Japan. When was this level of QE ever implemented previously?

Ive seen this somewhere..but the amount of googling I do I have memory overload problems...keep thinking it could on Bernanki's thesis...
However scouring the web turned up little info...Many recite that QE is new... e.g Bank of Japan 2001 but the concept of QE is not new ...The Great Depression 1930's was great because no body came to the rescue with piles of cash as the likes of the Vanderbilts and the Rockefellers did in the previous American depression.

However is this QE unprecedented?....using specific QE modern tools yes it is.....but the biggest easing I could find was the 1715 Depression when France tried to make its entire population wealthy through giveaway shares which the banks swapped with the debt bonds, this allowed France to keep spending ... France introduced paper money then as well so to devalue the gold coins and create inflation to eat away the debt which was 20 times its tax revenue...it was similar in England and its side effect was a global stock market bubble which burst...with disastrous results.

If we assume the USA is attempting to make all its Citizens wealthy with its National Debt $16T and Tax revenue $2.7T then France's 1715 easing was larger.

There's probably other depression periods...I just haven't the time to find the details

[winner69]

Just for you moosie .... what the NZD looked like once

He was a great man that Piggy Muldoon ..... just like that Maggie woman who recently died

[Hoop]

The money printing by big overseas central banks is going to hurt many NZX company's earnings ... Once again we'll be seeing some on the wrong side of hedging arrangements ... Time for our RB to start printing ... Lets all play beggar-my-neighbour again (just like post 1930s).

Two reasons why we don't. 1) Our monetary base is but a fraction of that in the US/Japan/Europe etc, therefore QE by the RBNZ would likely not have any long term desired results at all. 2) Inflation - If the RBNZ tried to implement some form of QE NZ would see prices rise significantly (in particular in housing). On the other hand the US, Japan etc do not really have this concern, in fact these countries in the early stages of QE are actually happy to have inflation because it lowers their real interest rates. Remember the US nominal OCR can't go any lower.

Just to elaborate on reason 2

The countries that are applying large QE are those trying desperately trying to avoid their economies sliding into depression and its companion deflation ...in some cases Greece are already there.

Depression / high deflation are interrelated so to prevent deflation, inflationary measures such as the milder monetary easing measures e.g lowering interests are used...if gentle easing fails or a crisis appears the heavy guns come out in all shapes and forms..the 2 edged sword QE:cool: Used right its OK, used wrong not OK..hence its use today and its risk has attracted some major academic critics

NZ applied monetary easing and our economy responded thanks partially to the strengths of our banks, high prices for our major export commodity and the resilience of our property market to hold firm... I suspect applying QE in NZ would result in a massive overkill..creating out of control inflation, creating property and Equity bubble bursting type stuff...artificial demand upsetting supply/demand in the markets etc.

History tells us that Massive QE type of easings has resulted in some major disasters over the Centuries when used when not necessary or not managed properly due to public and political pressures....

Belg....go on the net and download an economic sims game ..create a situation similar to NZ is in and then pump in your QE and see what happens..let us know..huh?

[Hoop]

Belg....go on the net and download an economic sims game ..create a situation similar to NZ is in and then pump in your QE and see what happens..let us know..huh?

I had a go at this simple web game..You are the FED boss and using just one Monetary tool (interest rate) you have to keep employment rate, interest rate and inflation rate at a suitable level to be reappointed for another 4 years.

I got dismissed a few times :(:t_down::p....there are some different scenarios with each try and I got undone with the oil shock

How good r u ?......http://www.frbsf.org/education/activities/chairman/

[winner69]

Nice one Hoop

When inflation gets out of control seems impossible to bring it back eh .... but plenty of people in work

Methinks we need a decent dose of inflation

[janner]

Received 19 shillings and sixpence.. for every pound ... When I first landed at Whenuapai Airport..

Immediate PR STAMP.. On a standard canteen style table..

No Bull**** !!!.. ... Welcome to NEW ZEALAND !!..

Heheheee.. I have never regretted stopping of here.. NEVER ...NEVER...NEVER..

For Gods sake try to keep it that way !!!..

[Hoop]

Guess we can see that the NZD is through a 20+ year downtrend and now onto (maybe) a 20+ year uptrend! Interesting times ahead.

yur on to it....think secular ;)

Its a 10 year secular cycle with our No 1 trading partner A$/NZ$...... (China is our second biggest trading patner (half the size of Aussi)

USA (3rd biggest) on it own isn't a huge problem but Japan (4th) now devaluing combined makes life tougher...RB will be looking at the recent secular break with the Aussi Dollar and be heading for the cupboard to find the genie lamp...

[winner69]

yur on to it....think secular ;)
.

Hoop - you might enjoy this article. Thatcher drive inflation down and now 20 years on her death may signal a period of high inflationary

http://www.davidmcwilliams.ie/2013/04/15/a-low-inflation-legacy-ends

[Hoop]

Hoop - you might enjoy this article. Thatcher drive inflation down and now 20 years on her death may signal a period of high inflationary

http://www.davidmcwilliams.ie/2013/04/15/a-low-inflation-legacy-ends

Here's a couple of charts from your favourite chart of the day people.....I have a feeling David McWilliams would not like inflation returned is he saw these historic charts.
The right hand 210 year chart clearly shows the oilshock inflation years 1970's the 1923 Germany hyperinflation and the WW2 supply/demand inflation...all creating hardship for the people.
The great depressions of 1813 1857 1873 and 1930 stand out with high deflation...also creating hardship for the people..
On the left hand side the 800 year chart the inflation and deflation years just followed each other,,,so imagine the continual hardship of the people back then flicking from boom to depressionary busts every few years.

There's a decreasing trend in the oscillations, so it looks as if the Economists and the Treasuries/Central Banks are slowly getting a grasp on this inflation/deflation thing.....OR...if we believe in the law of averages we are overdue for a mother of all deflations

When you look at history anything seems possible...eh ? NZX50 from 4455 to 445 might not seem quite like fantasyland stuff after looking at some catastrophic events in History on these charts.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/08-2/Inflation%20DB%202.jpg

[janner]

Here's a couple of charts from your favourite chart of the day people.....I have a feeling David McWilliams would not like inflation returned is he saw these historic charts.
The right hand 210 year chart clearly shows the oilshock inflation years 1970's the 1923 Germany hyperinflation and the WW2 supply/demand inflation...all creating hardship for the people.
The great depressions of 1813 1857 1873 and 1930 stand out with high deflation...also creating hardship for the people..
On the left hand side the 800 year chart the inflation and deflation years just followed each other,,,so imagine the continual hardship of the people back then flicking from boom to depressionary busts every few years.

There's a decreasing trend in the oscillations, so it looks as if the Economists and the Treasuries/Central Banks are slowly getting a grasp on this inflation/deflation thing.....OR...if we believe in the law of averages we are overdue for a mother of all deflations

When you look at history anything seems possible...eh ? NZX50 from 4455 to 445 might not seem quite like fantasyland stuff after looking at some catastrophic events in History on these charts.


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/08-2/Inflation%20DB%202.jpg



So !!... Hoop if this deflation did occur.. Would not all things be equal so far as ROE..

Your share is worth less.. the dividend is less.. Your living costs would be less.. Rent power food etc..

[Vaygor1]

So !!... Hoop if this deflation did occur.. Would not all things be equal so far as ROE..

Your share is worth less.. the dividend is less.. Your living costs would be less.. Rent power food etc..

Deflation sounds wonderful doesn't it? Things just keep getting cheaper... houses, bread, petrol, lotto prizes (that others win)...

You are right Janner except for one thing that does not get cheaper is ones mortgage payments. And when wages decrease to the point where the average citizen's mortgage payment cannot be met, things turn ugly. When too many can't pay their mortgages, the banks go bust, and when the banks go bust everyone loses a lot and the country is left with a huge population of unhappy voters.

Governments will always opt for the comfort of inflation for this reason. Seems to be a lesson from somewhere in the past that successive governments anywhere in the world have not forgotten.

[Hoop]

Looks like this has been the catalyst for the worst day on the markets in 5 months!....
No down spike...The market had been deteriorating over the whole day
http://charting.nasdaq.com/ext/charts.dll?2-1-17-0-0-008001830-03NA000000SPX-&WD=530-HT=395-

[Hoop]

So !!... Hoop if this deflation did occur.. Would not all things be equal so far as ROE..

Your share is worth less.. the dividend is less.. Your living costs would be less.. Rent power food etc..

What you are describing Janner is disinflation...which is theoretically an orderly market correctional event when the market becomes overvalued....Disinflation could be seen as a good thing.

Deflation is a symptom of a systemic breakdown and if not treated quickly it can become a spiralling down out of control catastrope....When there's evidence of deflation showing up, risky and drastic measures have to be introduced..QE!!!!
Deflation itself is not the problem, deflation is the result of problems.

Off the top of my head here are some of the problems...feel free to add more..
1...the big one first The Supply/demand processes sector by sector start to melt down. Orginally the Consumers stop spending due to an event... then as sellers lower their prices to move their products Consumers still don't buy..Prices are lowered again and the Consumers now don't buy as they wait knowing it will be cheaper again soon.... this one sector example shows deflation as the symptom of the problem of unusual Consumer Resistance behaviour...This Consumer behaviour if left untreated can become a habit which is hard to break.
2...The ongoing effect of disrupted S/D processes...Producers cut back supply orders due to lack of demand
..............Commodity prices and raw materials drop due to lack of demand
..............Supply costs cheapen but discounting of end products continue to an attempt to increase volume back to "normal"
..............Companies having to cut costs during the down turn have dismiss workers or suggest cut in wages
..............Share market crashes...money evaporates.
..............Company Assets revalued which may created Asset/debt ratio problems
..............Fiscal and monetary policies become ineffective as the Reserve Banks run out of bullets.
..............With interest rates below zero..high costs to keep money in the banking system .... Banks collapse and money evaporates
..............The best investment is now holding physical money under the mattress........money leaves the system and the reverse multiplier effect is destructive
..............Assets collapse and money evaporates ....the new poor are the masses with asset/debt leverage e.g homeowners...the new poor are well in the negatives. The person that orginally had nothing including no debt e.g a old vagrant living on the street is the new rich
..............Only the people with physical money and no debt survive but the chance of losing that money due to robbery/fire is high.
.......... ...High unemployment rate ..above the anarchy trigger point of 25%
..............Public maintenance is deferred due to local body collapses...Public water and sewage systems deteriorate
..............Crimes increase,,,,mass destruction of public and private buildings plus empty buildings.... insurance industry melts down.
..............Businesses close down

That's enough I'm depressed

[Hoop]

Not sure of your point? Are you implying the worse than expected numbers out of China did not impact the markets today?

China news was overnight in the US - Dow opened about 0.5% lower.

Sorry Turmeric....Someone here said there was a Boston effect and I kept thinking the Boston effect when I first read your post and posted my response post..... I have re=read your post now...ooops sorry...thinking and doing too many things at once this morning ..multi-tasking is being maxed out..

I wonder if this (China) is the trigger point for a NZX50 Bull Market Correction as well as Wall St, .....AORDS FTSE, & DAX already triggered ??

[Hoop]

Re the deflation (disinflation) talk. It's prudent here to point out the distinction.

Deflation is when prices are decreasing. Deflation can be very bad as per previous posts by Vagour, Hoop and myself!
Disinflation is when the rate of inflation is decreasing. I.e. when prices are increasing at a decreasing rate. Whether or not disinflation is a good or bad thing is very much dependent on the rate of inflation. In NZ if inflation was outside of the target band at the upper bound then disinflation would be considered a good thing.

Yep agree...

Its very hard to write about a complex issue on a short ST post....
My post mentioning disinflation seems to have some loss of translation.... I focused on a deflation difference thinking a drop in inflation into the negatives e,g from +1% to say -1% could still be classed as disinflation as opposed to being called deflation as long as the drop is seen as an overvalued market is in a process of a healthy correction rather than a symptom of a systemic problem starting to occur. (Assuming that -1% being obviously outside an ideal operating zone the money people would be applying some sort of monetary/Fiscal easing to help it back into the +2% comfortable area)

With QE is the USA that proved the point that the decrease of inflation was viewed as a deflation symptom not disinflation when it went down from +5% to +1% and QE1 was applied...There must have been some worrying times as the momentum continued pushing the rate down from +1% to -2% before the QE effects finally kicked in...

The interesting thing was the accurate analysis of deflation as opposed to disinflation when inflation was at +1%!!, the expert timing of applying the controversial QE at +1% inflation and the ongoing management so far..Well done FED.

[iced]

lol, unfortunately a lot of Americans WILL be doing that!

And unfortunately the perpetrators may be short.

[winner69]

You know the market is in trouble when Ecoya is top of the leaderboard for the day...

and an outfit called SUM

[winner69]

tumeric .... maybe what happens when a Sornette Bubble bursts (see the S&P thread)

[winner69]

tumeric .... maybe what happens when a Sornette Bubble bursts (see the S&P thread)

I just love these log-periodic power law things ... mathematics and physics working together to predict (explain) all sorts of things

[Hoop]

Oh sure - the bombings themselves may have had little effect by themselves, but exacerbated negative sentiment which already existed.

it would be nice to see the NZX have a good day today.

I mentioned this in my post #667 (http://www.sharetrader.co.nz/showthread.php?6952-NZSX50-Good-News!/page45) the chart I posted somehow got displayed in a mirror image form (no idea how I managed to do that:confused:)
Below is a better chart...this should be enough proof that the Boston Bombings did not contribute to the worst down day on the Equity Market for 2013.

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP500160420132daychart.png


On a more important note:
IMF cuts its global economic growth forecasts
The International Monetary Fund warned that an "uneven recovery is also a dangerous one" for the global economy as it again downgraded its growth forecasts for 2013, while holding out the prospect of relief late in the year. In its twice-yearly World Economic Outlook, the fund outlined high medium-term risks stemming from doubts about the eurozoneﾒs ability to claw its way out of its crisis and in US and Japanese ability to reduce public sector deficits and debt. But the IMF recognised that short-term perils had abated as financial markets approved of the eurozoneﾒs crisis management last year and the US authoritiesﾒ willingness to come to arrangements to limit planned dangerously rapid fiscal tightening.
Highlighting the differential outlook for countriesﾒ economic prospects, Olivier Blanchard, chief economist of the IMF, said: "Given the strong interconnections between countries, an uneven recovery is also a dangerous one. Some tail risks have decreased, but it is not time for policy makers to relax."

I've harped on ST about QE being a dangerous tool as its an extreme tool....Good to see these economists are on the same page sharing their thoughts....If policy makers delay winding down QE this will keep the Equity markets threading water for a little while longer yet...(An "overvalued" Equity market is a side-effect of QE)
The NZX50 index is in a sympathetic correlation with the S&P500 and Wall St at the moment... any large movement on Wall St will probably be reflected on the NZX50

[winner69]

Yes, I had a good read of it and hearitly enjoyed it. Makes one stop and think for a bit. If the S&P is looking overbought imagine what the NZX must be looking like! Time to start heading some warnings me thinks.

My father, who has a Masters in Advanced Mathematics, agrees with the article you posted.

God one moosie .....your dad probably a fascinating character.

Maths was my major when I was at varsity but that was zones ago. No not a masters like your dad. Because one had to learn it it wasn't much fun

But as time has gone on I can appreciate that much of what i learnt did have some real life meaning.

It is amazing how maths, physics,ecology and even botany do explain how a how a lot of things turn out in business and the share market.

My favourite economist is Paul Ormerod who has written a few good books. One you might enjoy is Why Most Things Fail. An easy read but really fascinating

[percy]

God one moosie .....your dad probably a fascinating character.

Maths was my major when I was at varsity but that was zones ago. No not a masters like your dad. Because one had to learn it it wasn't much fun

But as time has gone on I can appreciate that much of what i learnt did have some real life meaning.

It is amazing how maths, physics,ecology and even botany do explain how a how a lot of things turn out in business and the share market.

My favourite economist is Paul Ormerod who has written a few good books. One you might enjoy is Why Most Things Fail. An easy read but really fascinating

Thanks winner69.
I have it placed on hold at ChCh City Libraries.

[winner69]

Thanks winner69.
I have it placed on hold at ChCh City Libraries.

I'm sure you will enjoy it

On a flight to Oz again in a day or to so will take with me and have another read .... a real book and not the iPad version

[winner69]

moosie - another concept i find fascinating is Economic Singularity

Singularity was originally a mathematical term for a point at which an equation has no solution. In physics, it was proven that a large enough collapsing star would eventually become a black hole so dense that its own gravity would cause a singularity in the fabric of spacetime, a point where many standard physics equations suddenly have no solution

Economic singularity in commercial terms is a state where unless things are done differently the entity will become irrelevant and fall into a ‘black hole’. done differently essentially when a business model is broken and to survivr (ie avoid going into thta 'black hole' one needs to refresh their business model and do things differently.

I have a glass sculptor on my desk at work just to remind me of this concept .... cause it is amazing how many companies have collapsed into that 'black hole'


Vivid imagination eh but thought provoking none the less

[winner69]

Thats almost what the VIX is saying .... options are priced to reflect a +/- 4.7% over the next 30 days

Ooops it is also saying the S&P could go UP 4.7% as well as down

Whatever VIX is still at pretty low levels and is way of any panic territory .... its all honky dory onthe western front

[winner69]

you worry too much moosie

concentrate on your day job

[BIRMANBOY]

Ok so what happened in Jan 2010? And is that comparison of NZX to ASX correct?
NZX Ltd (NZX.NZ)










Technical Analysis
Get Technical Analysis Chart(s) for:







NZX Limited Ordinary Shares (NZSE)








Range:
1d (http://us.rd.yahoo.com/finance/chart/range/1d/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=1d&l=on&z=l&q=l&p=&a=&c=ASX) 5d (http://us.rd.yahoo.com/finance/chart/range/5d/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5d&l=on&z=l&q=l&p=&a=&c=ASX) 1m (http://us.rd.yahoo.com/finance/chart/range/1m/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=1m&l=on&z=l&q=l&p=&a=&c=ASX) 3m (http://us.rd.yahoo.com/finance/chart/range/3m/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=3m&l=on&z=l&q=l&p=&a=&c=ASX) 6m (http://us.rd.yahoo.com/finance/chart/range/6m/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=6m&l=on&z=l&q=l&p=&a=&c=ASX) 1y (http://us.rd.yahoo.com/finance/chart/range/1y/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=1y&l=on&z=l&q=l&p=&a=&c=ASX) 2y (http://us.rd.yahoo.com/finance/chart/range/2y/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=2y&l=on&z=l&q=l&p=&a=&c=ASX) 5y max (http://us.rd.yahoo.com/finance/chart/range/max/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=my&l=on&z=l&q=l&p=&a=&c=ASX)
Type:
Bar (http://us.rd.yahoo.com/finance/chart/type/bar/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=b&p=&a=&c=ASX) | Line | Candle (http://us.rd.yahoo.com/finance/chart/type/candle/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=c&p=&a=&c=ASX)
Scale:
Linear (http://us.rd.yahoo.com/finance/chart/scale/linear/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=off&z=l&q=l&p=&a=&c=ASX) | Log
Size:
M (http://us.rd.yahoo.com/finance/chart/size/medium/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=m&q=l&p=&a=&c=ASX) | L







Moving Avg:
5 (http://us.rd.yahoo.com/finance/chart/sma/5/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m5&a=&c=ASX) | 10 (http://us.rd.yahoo.com/finance/chart/sma/10/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m10&a=&c=ASX) | 20 (http://us.rd.yahoo.com/finance/chart/sma/20/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m20&a=&c=ASX) | 50 (http://us.rd.yahoo.com/finance/chart/sma/50/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m50&a=&c=ASX) | 100 (http://us.rd.yahoo.com/finance/chart/sma/100/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m100&a=&c=ASX) | 200 (http://us.rd.yahoo.com/finance/chart/sma/200/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=m200&a=&c=ASX)
EMA:
5 (http://us.rd.yahoo.com/finance/chart/ema/5/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e5&a=&c=ASX) | 10 (http://us.rd.yahoo.com/finance/chart/ema/10/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e10&a=&c=ASX) | 20 (http://us.rd.yahoo.com/finance/chart/ema/20/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e20&a=&c=ASX) | 50 (http://us.rd.yahoo.com/finance/chart/ema/50/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e50&a=&c=ASX) | 100 (http://us.rd.yahoo.com/finance/chart/ema/100/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e100&a=&c=ASX) | 200 (http://us.rd.yahoo.com/finance/chart/ema/200/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=e200&a=&c=ASX)







Indicators:
MACD (http://us.rd.yahoo.com/finance/chart/tech_indicator/macd/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=m26-12-9&c=ASX) | MFI (http://us.rd.yahoo.com/finance/chart/tech_indicator/mfi/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=f14&c=ASX) | ROC (http://us.rd.yahoo.com/finance/chart/tech_indicator/roc/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=p12&c=ASX) | RSI (http://us.rd.yahoo.com/finance/chart/tech_indicator/rsi/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=r14&c=ASX) | Slow Stoch (http://us.rd.yahoo.com/finance/chart/tech_indicator/slow_stoch/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=ss&c=ASX) | Fast Stoch (http://us.rd.yahoo.com/finance/chart/tech_indicator/fast_stoch/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=fs&c=ASX) | Vol (http://us.rd.yahoo.com/finance/chart/tech_indicator/vol/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=v&c=ASX) | Vol+MA (http://us.rd.yahoo.com/finance/chart/tech_indicator/vol_ma/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=vm&c=ASX) | W%R (http://us.rd.yahoo.com/finance/chart/tech_indicator/w_r/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=&a=w14&c=ASX)







Overlays:
Bollinger Bands (http://us.rd.yahoo.com/finance/chart/overlay/bollinger/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=b&a=&c=ASX) | Parabolic SAR (http://us.rd.yahoo.com/finance/chart/overlay/parabolic_sar/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=p&a=&c=ASX) | Splits (http://us.rd.yahoo.com/finance/chart/overlay/splits/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=s&a=&c=ASX) | Volume (http://us.rd.yahoo.com/finance/chart/overlay/volume/*http://nz.finance.yahoo.com/q/ta?s=NZX.NZ&t=5y&l=on&z=l&q=l&p=v&a=&c=ASX)







Compare:
NZX.NZ vs









http://chart.finance.yahoo.com/z?s=NZX.NZ&t=5y&q=l&l=on&z=l&c=ASX&a=v&p=s&lang=en-NZ&region=NZ

[BIRMANBOY]

ahhaaa. Thanks..you can tell I'm not a "chart tart":)
You're comparing the stock, NZX, to the index, ASX (so apples with pomegranates). It appears there were two share consolidations in December '09 and mid-year '12 for NZX.

[Banksie]

Told my partner to invest in the growth fund of ANZ's Kiwisaver scheme yesterday when we were at the bank. She opted for the conservative (2nd lowest risk one). She is now regretting it lol.

Yeah, what is that about. I have the same problem with my partner. She calls me the hare while she is the tortoise. I just hope I don't spend my whole retirement listening to I-told-you-so's.

(Hares, tortoises, bulls, bears, and flamingos - think I might go to the zoo this weekend ;) )

[Snow Leopard]

lol, males are much more risk-on than females. We are the XRO's and DIL's of the world while they are the FBU's and TEL's. It helps that we are financially well versed, know ALL our options and quickly change to suit our environment as investors though. Each to their own really.

And there is a reasonable body of evidence (which you will have to find yourself I can not remember the links) that generally Women are more successful at making money in the stock market than Men, probably for precisely the reasons you outline above.

Best Wishes
Paper Tiger

[Banksie]

Admit it. How many of us got very little work done today because the market was much more exciting than their boring day-to-day?

<Sheepishly raises hand>

Mind you most days the market is more interesting than my day job.

[J R Ewing]

Told my partner to invest in the growth fund (most aggressive) of ANZ's Kiwisaver scheme yesterday when we were at the bank as we are both very young and can take risks. She opted for the conservative (2nd lowest risk one). She is now regretting it lol. Told her not to worry about it, we all have different risk styles and she can buy a her new Porsche with some of my SNK proceeds ;)

And if not a Porche, perhaps a second hand Daihatsu Sirion?

[J R Ewing]

I think she would honestly take that over the Porsche, which is too flashy and not enough practicality for her!

You have no idea how envious that makes me feel.

[BIRMANBOY]

Stick and hold or hold the stick? Can change in the blink of an eye.
Very true, much more stick and hold types eh?

[BIRMANBOY]

We know who you are Banksie.....you'll find your paycheck a bit short next week to compensate for "lack of interest". Best regards ...your boss. Have a nice day.
<Sheepishly raises hand>

Mind you most days the market is more interesting than my day job.

[Sideshow Bob]

I could hug you for admitting that. I made the decision around 3 years ago to exit from my job, which I greatly enjoyed at the time (though in a rather negative industry). Investing fulltime has really been good for me, both spiritually and financially. I really love being a hands on investor (not just equities but property too). I admit watching the share prices a bit too much though, too easy to be triumphant for little reason other than luck and other people's behaviour....

Admin - when are we going to get a 'LIKE' button as Facebook??

[Snow Leopard]

...and I know there are historic patterns around the "Sell in May" thesis. I personally don't ascribe to such theory, but am prepared to accept the market can be influenced by those who do believe so....


So you DO believe it then.

Have a good one
Paper Tiger

[Hoop]

Paper Tiger - I do not use TA to significantly inform my investment decisions. It is a very minor component of my investing behaviour. But I recognise it exists and more importantly, it influences people like you and others on Sharetrader who influence the market on a more regular basis with trading.

When I was a long term FA diehard I use to curse TAers yabbering away that the stock has broken down and reversed trend so get out,,,It felt like a self fulfilling prophecy.....I hated TA back then because once they yelled doom my portfolio turned to crap......... but after being convinced otherwise by Colin Twiggs articles and help from Mr P ...the penny dropped....and I decided if you can't beat them, join them............best move I ever did ..even registering as a more frequent Trader with profit intent with the IRD helped as it enabled me to freely buy/sell and lowered the risk of capital evaporation.

TA just measures trading behaviour and its psychological aspects of it..... Instinctive Behaviour is hot wired into us all

The counter argument from the TA gurus kept telling me this question....How come TA still works on historic 200 year old data that existed before TA was used or even thought of..?

TA measures the behaviour of everything in nature behaviour has a predictable element within itself TA can not be an influence here but it still works..... e.g Climate chart ...when Temperatures break their uptrend it is going to be a reversial to a downtrend towards a cold period. Animal overcrowding reproduction slows population and the population number trend breaks and reverses. Both examples are cyclic events (history repeats because it is a cycle of events)

this also includes human behaviour ..there's predictability there as well........don't believe me
show MVT one of my charts and see what happens..eh:cool:

[Goldstein]

Paper Tiger - I do not use TA to significantly inform my investment decisions. It is a very minor component of my investing behaviour. But I recognise it exists and more importantly, it influences people like you and others on Sharetrader who influence the market on a more regular basis with trading.


In a perfect market, if TA gave some parties a clear advantage, the market would adjust to remove that advantage. I guess the market aint perfect.

I'm interested to know Sparky do you have a plan B? You becoming a fulltime investor has coincided with both property and shares heading north. I would like to do the same for lifestyle reasons and I have enough capital tied up in the house to do it, but just haven't quite got the guts. I sort of play around with 15% of my net worth. Also my forte is science and technical stuff and that's what my occupation involves, so I kind of play to my strengths I guess.

[TimmyTP]

I have to admit (even though I wasn't asked!) I would be way too chicken to think of investing full-time until I have been actively participating in a couple of full bear/bull cycles.

I have just worked out my shares vs net worth & free cash for the first time and it turns out I have less than 3% of my net worth in shares, but this makes up slightly less than 30% of my cash. I am still making stupid mistakes (like not knowing my shares vs worth & cash ratio) and have only invested actively in a raging bull market so far, so I have no tested bear market strategy. I would definitely not borrow against the house and margin lending scares the bejeezus out of me, so it's "only bet what you can afford to lose" for me.

I wonder what is the tiger vs dog spread amongst ST members?

[Snow Leopard]

...I wonder what is the tiger vs dog spread amongst ST members?
I wonder what a dog spread is. Some sort of sheet you throw over the sofa to stop it getting covered in dog hairs?

I don't understand what you are asking.

Best Wishes
Paper Tiger

*I only speak a little Indonesian

[TimmyTP]

I don't understand what you are asking
Fair point!
According to my friends from Hong Kong, dogs worry a lot and tigers are brave and daring.
Anyway Goldstein's post made me wonder whether I am being unusually cautious (a dog) and whether most others were betting the farm (non-paper tigers).

Feel like I could be on the wrong thread though.

So.... another fun day on the NZX, less exiting for me than Wednesday though.
I have been changing my stock list a bit over the last couple of months to try to reduce my risk, too. I've never yet seriously regretted selling before the top, especially when I've made some pocket money on the way up.

[Major von Tempsky]

So the Republicans were right :-) (in saying cut spending and eliminate the deficit). I note that Obama's Budget he has just sent to Congress plans to RAISE expenditure by 5%. Some people just never learn, they need several years of paying off their debt now.

[000831]

Nothing is able to stop NZX and property market uptrend, unless the interest rate. RBNZ is doing nothing, but a warning, that's it.

[000831]

should not worry at all, all those interven failed at the end. saw often in Chinese and HK markets, similar methods like increase bank deposit rate, taxation on trading, etc

nothing can stop the current uptrend, but a sudden lift in OCR or USA and Japan change to tighten monetary policy

[Poet]

So what happens today now that MRP price and allocations are set.

One would think that the instos would have had their money on the sidelines waiting to pay for their MRP purchases and now that price is maybe less than expected will probably have money to put back into other equities.

I wouldn't think many would be planning to sell today to pay for their MRP

but maybe..

[CJ]

So what happens today now that MRP price and allocations are set.

One would think that the instos would have had their money on the sidelines waiting to pay for their MRP purchases and now that price is maybe less than expected will probably have money to put back into other equities.

I wouldn't think many would be planning to sell today to pay for their MRP

but maybe..I dont think they settle till monday so there may still be some selling.

[000831]

so RBNZ made a joke

[000831]

that would piss off Mr. Moneyman. more restricted intervens may come out soon.
Suppose this could go for the TV news............

[000831]

If they increase the OCR, then NZD will be more appreciated. dilemma

if NZD down, then more overseas long term investment come in NZ to invest housing market?

[000831]

The problem is as people bought the house will be locked-in, if OCR lifts up suddenly and largely, then they cannot afford the debt. another crash :t_up:.

The history will never be simply repeated. When blood on the street, buy property!
Waiting and excited. :p

[000831]

at least, John Key knows, he is ax ex-trader :cool:

[Hoop]

8th May release ..... Reserve Bank fretting about the property bubble + other new tools to use. (http://www.rbnz.govt.nz/finstab/fsreport/5252607.html)

[CJ]

Snapiti - the housing market is a concern but the RB (finally) is looking to do something about it with some macro prudential tools. First up is higher capital requirements for LVR 80% loans.

I think he will continue to bring in new measures so that he can keep interest rates flat as otherwise the currency will go up.

So if we assume that his plan works (and since this is economics, we can assume anything) then I think NZ is looking to be in a very good position, provided global markets dont crumble.

[000831]

yep, I saw many fear here, not greedy, then the index continues to climb

[000831]

NZD/USD still increase to 0.85 level.

New Zealand recorded a trade surplus of 718 Million NZD in March of 2013.

Interesting, RBNZ does not have much room for currency intervene, OCR cannot be lower, otherwise burn property market. Higher OCR will drive NZD higher. The big guy who pushes up NZD is able to borrow hugely from Japan or US to against RBNZ in the market. It's a war!

RBNZ yesterday's action on currency market is a joke.

[Hoop]

History is not on Graeme Wheelers' side...

quote Wikipedia...
"...On 11 June 2007 the Reserve Bank (http://en.wikipedia.org/wiki/Reserve_Bank_of_New_Zealand) sold an unknown amount of New Zealand dollars in an attempt to drive down its value. This is the first intervention in the markets by the Bank since the float in 1985.
Two suspected interventions followed, but they were not as successful as the first: the first appeared to be initially effective, with the dollar dropping to approximately US$0.7490 from near US$0.7620. However, within little more than a month it had risen to new post-float highs, reaching US$0.8103 on 23 July 2007....."

[CJ]

This is what we want more of in NZ. I agree

However, not exactly high paying jobs: "About 30 people would be employed at the factory in high-end science or engineering jobs, taking home about $1.5m in wages a year, he said."

Works out at $50k. NOt sure if that is good in the provinces but would be insufficient in Auckland to keep you in the coffee scene.

[CJ]

CJ, those are direct employs. Note that being close to Massey Uni was part of the decision making. More jobs and knowledge. The flow-on effect (or multiplier as economists call it) is significant the comp will require everything from accounting services to materials and pwoer to cleaners. Again agree. We need more jobs and industries in the provinces. Half the jobs done in Auckland could be done elsewhere.

[bonne vie]

Hi I am sure the answer to this question is back in this thread somewhere earlier this year, but can not find it. Where can I get a list in order of of NZX50, in particular the 45 - 50th which are next to be bumped next review. Thanks

[CJ]

Hi I am sure the answer to this question is back in this thread somewhere earlier this year, but can not find it. Where can I get a list in order of of NZX50, in particular the 45 - 50th which are next to be bumped next review. Thankshttp://www.sharetrader.co.nz/showthread.php?9112-NZX50-constituent-companies-as-at-close-on-25th-March-2013&highlight=index