View Full Version : Is This Bull Cycle Over ?
Thought I would try and bring this debate to a single thread as it does seems to clog up others, DIL most recently over the weekend.
We have a lot of welcome new investors reading and actively participating in this forum and it does concern me, from time to time, that a lot of the end of the world prophecies of late may unduly influence some to unnecessarily cash up and to go hide in a wardrobe, equally, to not keep an eye on the market position and to not assess risk is also not wise.
Shall I make a first post and invite all to contribute.
The charts are always right until there’re wrong.
It’s an old saying, most of us would have heard it, it simply means that looking back in time then projecting historical data forward works very well in predicting future outcomes until something changes , something different from the past, resulting in those forecasts being less than accurate or simply wrong.
Many economists propose that the massive and unprecedented amounts of QE injected into the US, European , Japanese and other economies is just such a difference.
Hence the other saying - ‘This Time Is Different’.
Is it different this time ?
winner69
11-08-2013, 12:44 PM
Hence the other saying - ‘This Time Is Different’.
Is it different this time ?
What a stupid question ....of course it's different this time.
As an aside QE has done little to grow the real economy in the countries where it has been ...it's just inflated asset prices
Major von Tempsky
11-08-2013, 12:49 PM
Charting is what you do when you don't have any real data to discuss, or anything new.
Here's a piece of new real data - China's industrial production has just turned upwards again and grew at an annual rate of 10% last month. It's trade data also turned bullish.
So, no, I don't intend to get under the bed and read Revelations.
keepitsimple
11-08-2013, 01:55 PM
Im no economist but Qe or money printing at the same rate as population growth is essential or there will not be enough cash per person in the system to keep world economy ticking over,is that too simplistic.
Major von Tempsky
11-08-2013, 02:39 PM
Disclosure: I'm neither a taxi-driver nor a hairdresser but a retired economist :-)
Don't forget that NZ is just in the process of making a major breakthrough in the China meat trade, a la the dairy trade to China.
We have our Free Trade Agreement with China (first country in the world to do so) and now that our idiot bureaucrats in the MPI (Ministry of Primary Industry) have finally been sorted we should be making huge strides in meat exports to China.
Once the taxi driver/hair dresser starts telling you about the shares they have bought and start proferring advice, it is time to get out. Euphoria will be in effect, or just about to take place.i think we were getting close but luckily (or unluckily if you hold like me) MRP was a flop. If every IPO this year was a great stag, it would be all the taxi drivers were talking about. Luckily, it has been mixed.
Auckland could be the next Dubai where great wealth made on the back of a commodity (oil) has been invested.
.dubai taxed the oil revenue. Mineral wealth is quite different to pastoral wealth.
Auckland has no claim to that and even central government can't do that other than normal income tax unless it charges indirectly via a water charge.
fungus pudding
11-08-2013, 05:01 PM
Im no economist but Qe or money printing at the same rate as population growth is essential or there will not be enough cash per person in the system to keep world economy ticking over,is that too simplistic.
It most certainly is.
Minerbarejet
11-08-2013, 05:24 PM
me thinks you're missing the renewable/non-renewable factor of said commodities...
Have you ever googled abiotic oil? I know its close to idiotic but interesting just the same. Oil may require further review as to its being non renewable imho. After all oil by its mere presence was made in the past and I would be interested to find out when they stopped making it.
A date would be helpful. :)
its all a commodities wealth not a pastoral wealth.
last time I looked milk was a traded commodity, logs were a traded commodity and meat was a traded commodity just like oil.
I think you cant see the wood through the tree's CJ.my point was a govt can clip the ticket more on mineral wealth. (Refer Dubai, Norway, Alaska).
With pastoral, manufacturing, ICT, the wealth goes to the corporate/individual, not the government.
Doesn't mean it isn't good for the country, just that you are rely on individuals to trickle down rather than a central sovereign wealth fund investing for the future benefit of the nation
Stranger_Danger
11-08-2013, 07:02 PM
I'm conflicted about the market.
I'm currently 50% cash, 50% shares, with no bonds (other than some IFTHA, which is almost a "short" bonds position).
I am still making very good money on shares, selling a few bits and pieces (mainly any dogs, plus small portions of big winners, ie, up at least 10 fold) and still doing little bits of buying.
However, I'm seeing a lot of complacency - not euphoria - with signs some people are starting their analysis by comparing a dividend yield to a term deposit rate...and stopping their analysis at that point.
Cash has an option value over and above it's return. It isn't there to make high returns - it is there so you never have cashflow problems, so that you don't go broke, and so you can take advantage of opportunities.
I hate every cent I hold in cash for the return it gives me, I even have some (poor) friends hassling me for "not just chucking it in XRO or DIL) but I'm not tempted.
My base position is that we're not in 2009 anymore, but you want some exposure to the market, and we'll probably (not convinced) keep going up.
Now, to catch the crazy train for a second, 10% - 20% of me thinks NZ and Australia will have a property crisis in the next 12 months. Note I said crisis - not crash. I just have a "something's gotta give" feeling - this is the area where I'm sensing the most complacency. It could be a crash - or it could be an off the charts increase!
In effect, we now have a boom on top of a boom happening in Auckland. Unlike the USA, there was no crash.
I've long said the KiwiSaver subsidy folk (people with an entitlement mentality, who haven't even saved a true deposit) will be the "biggest fools", the people you need before a crash, the people that bigger fools cannot be found for.
I note the announcement by Key to keep properties being distributed by the baby boomers to these fools.
After them. Where is your bigger fool?
All I know is that there is a massive disconnect between why interest rates need to be so low, why young people think they are low, the sort of prices you would expect in an environment where interest rates need to be that low. I also do not know a single 20-35 year old who *genuinely* feels they have borrowed money for 20+ years and *genuinely* would move heaven and earth to pay it back. Many are just comparing mortgage to rent, stealing, borrowing, lying, and KiwiSaver claiming to get a deposit, then signing on the dotted line, no fear.
Something's gotta give.
Surely under our income and gst revenue policies plenty of wealth goes to the goverment from these sectors you mentionmineral taxes are normally on Revenue (amount extracted), not profit so better than an income tax
GST incurred can be reclaimed, therefore it is incurred only by the ultimate consumer
blakecb
11-08-2013, 07:27 PM
I also do not know a single 20-35 year old who *genuinely* feels they have borrowed money for 20+ years and *genuinely* would move heaven and earth to pay it back. Many are just comparing mortgage to rent, stealing, borrowing, lying, and KiwiSaver claiming to get a deposit, then signing on the dotted line, no fear.
Well you've just met one then - I'm 29 and have just bought my first house in Auckland. I did the sums assuming the interest rates were 8%. One of my friends, 2 years younger than me bought a house doing his sums at 13%! I locked in 50% at the 5 year rate and 25% at 3 years. So no 1 year joy ride for us. I now feel the weight of the world on my shoulders and we will live frugally to pay off as much as we possibly can, so that we will be ready if/when interest rates go over 8% again.
The trouble in Auckland is an issue of supply, no two ways about it. It is hard to increase the stock as any developer going to the trouble of buying expensive land, getting resource consents, paying chorus and everyone else to service the land, plus putting a house on it is looking at $600+ as their cost. Then, of course, they want to make a profit!
When the fixed interest rates go up as everyone is coming off their 'cheap' 1 year fixed rates we'll see the fools who went into it without any margin having to sell off their houses. One can only speculate as to the possible effect of that on the market. My feeling is that it is not a bubble, but simply a supply/demand issue that is not going away.
PS. Using Kiwisaver funds for a first home deposit is a good use of the money - one is buying a long-term appreciating asset. And let's face it, there are no houses in Auckland for under $485K outside of South Auckland, so the deposit subsidy from the Government is pretty safe I would have thought!
brevos
11-08-2013, 07:56 PM
I also do not know a single 20-35 year old who *genuinely* feels they have borrowed money for 20+ years and *genuinely* would move heaven and earth to pay it back. Many are just comparing mortgage to rent, stealing, borrowing, lying, and KiwiSaver claiming to get a deposit, then signing on the dotted line, no fear.
And another one here - I'm also in that age bracket and have just bought my first house (in central Auckland) over the past couple of weeks. I did similar sums as blakecb so have comfort if interest rates do indeed rise. And I also plan to work hard and get rid of my mortgage as fast as I possibly can.
I agree that the issue with the Auckland property mkt is lack of supply. However I think it's dangerous to just look at Auckland as one large property market, as I believe central suburbs are far more insulated from potential negative future scenarios then those further out.
e.g. the 20% LVR is likely to have a greater impact in suburbs with lower priced houses and more first home buyers vs more central suburbs where average prices are $1m+. Similarly, the GFC saw prices fall in many Akl suburbs, however demand remained relatively strong in central suburbs and prices continued to increase (or at least stay flat).
blakecb
11-08-2013, 07:59 PM
BLAKECB you have structured your loan very well, however your 5 year rate maybe your down fall.
You may have secured that at about 6.8%.
What say in 5 years the best rate you can get is 10%.
I hope you are not married cause those sort of financail pressure's can way heavily on marrage's.
I hope you are not thinking of having children in the next 20 years.
:)
Well, 3 things - by then I intend to have paid off enough principal for 10% to be manageable; secondly to have increased my income due to the fortune to be made in DIL and XRO :t_up::scared:; and third, my decision was based on the guess that the next interest rate peak will be in 2018, and coming off my 5 year rate I hope to catch the floating rate down, which is of course controlled by the Reserve Bank. That, and I took Tony Alexander's advice!
Thanks for your concern about my marriage and future child rearing prospects :).
Stranger_Danger
11-08-2013, 08:18 PM
Good to see a couple young-ish folk who are thinking about this stuff (I'm 36, by the way, in case I come over as an old fart).
The thing is this, you two have set up accounts and posted on an investment website - it isn't you I'm worried about. It is the vast majority who think that WFF isn't a benefit, who think KiwiSaver is a house scheme rather than a replacement for the superannuation that they won't be getting.
I know a lot of young people whose plan is basically to get into a house via KiwiSaver than get on the DPB or become a school teacher or something. There is 100% faith the Government will look after them.
The KiwiSaver types will be the first looking for a bailout should the property market turns to custard - Wheeler and Key both know this, which is why they're both panicking in different ways.
I'm not saying the KiwiSaver housing stuff is bad for the individual - it makes sense to take it if it is there.
The problem is yet another entitlement scheme, alongside the entitlement of generational low interest rates (without a thought as to why rates are where they are), going into a market at all time highs.
The posters on here may not have this mindset - but many, many do.
Regarding the supply issue, absolutely agree with you and don't need to go there. What a mess. Given that, assuming you both intend to slog and get some equity, you may even have done the right thing - I did say that the market could "crash" upwards, just as easily as downwards!
The fear I have, if it is downwards, is the vast amount of "jingle mail" we will have, recourse be damned. We saw it with the finance companies and I see it in my daily life - a significant percentage of the population has been trained to not think long term, and to expect to be saved from their own idiocy.
Minerbarejet
11-08-2013, 08:20 PM
So hows the bull cycle going then from whats been said so far - anyone want to do a precis. Moosie may be up to his neck in abiotic oil so he will be busy.
Good thread Mac - plenty of interest in more ways than one.
:)
winner69
11-08-2013, 09:04 PM
Stranger young one .... don't you ever ever get around to calling the national super a benefit. Cause I get it soon and I deserve it cause the govt started putting one and thrippence a week aside for me years ago.
Not my fault I was born when I was ... free education and all that and buying property at the bottom of the biggest property boom ever and then being able to sell at close to historical highs to the younger generation who are had to take on heaps of debt to do so.
It is not my fault I am what they call an accidental zillionaire .... but I am selfish (like most of my generation) and I will continue to demand the state pension (inflation adjusted off course) and free health care and importantly the Gold Super Card until I die .... and I expect your generation to find ways to fund that.
Good on you and others for looking after your finances and setting yourself up for later on in life --- keep at it cause my generation needs you to keep on paying taxes etc ...but as you say it seems we both fear for the 'vast majority' you mentioned - you might have support them as well as me
noodles
11-08-2013, 09:09 PM
If you are worried about a share market crash, put options on asx and wall st are cheap at the moment.
winner69
11-08-2013, 09:17 PM
lol, im up to my neck in lasagna and chocolate mousse (hardy har har!) right now, thanks major!
I'm 27 and see absolutely no reason to join the property ladder right now. I see no reason to join the masses of people my age flocking to indebt themselves to a bank for 20+ years, nor to take holidays i cannot afford or buy cars that are outside my salary range. I could go out tomorrow and put down a 40%+ deposit on a nice apartment i like here in napier, but I am not confident that is not a good investment right now. I also think I can aim much higher by increasing that capital I have in the market, keep saving through kiwisaver and keep some cash free. eventually, I hope to own a nice place, mortgage free, while people my age are still adled with one for a decade or more. I have big ambitions and being beholden to a bank is not in those plans just because my peers are! debt is burden and I do not like burdens!
Very sensible moose .... esp your views on taking on debt while the rest of the world is still deleveraging which probably one day will have some adverse impacts on property prices, even in NZ. But that approach seems contrary to popular opinion, even amongst your generation eh.
The only thing you have done wrong is living in Napier .... ha ha ... Napier a nice place to go for a few days and do the vineyards ... but then never thought of living there so I shouldn't really say its a bad place to live
BIRMANBOY
11-08-2013, 09:46 PM
Oh come on W69......they are depressed enough now...try not to extinguish all hope. They might try and put a 8 year max cap on Super and whisk us off into the cumpulsory euthanasia wing!
Stranger young one .... don't you ever ever get around to calling the national super a benefit. Cause I get it soon and I deserve it cause the govt started putting one and thrippence a week aside for me years ago.
Not my fault I was born when I was ... free education and all that and buying property at the bottom of the biggest property boom ever and then being able to sell at close to historical highs to the younger generation who are had to take on heaps of debt to do so.
It is not my fault I am what they call an accidental zillionaire .... but I am selfish (like most of my generation) and I will continue to demand the state pension (inflation adjusted off course) and free health care and importantly the Gold Super Card until I die .... and I expect your generation to find ways to fund that.
Good on you and others for looking after your finances and setting yourself up for later on in life --- keep at it cause my generation needs you to keep on paying taxes etc ...but as you say it seems we both fear for the 'vast majority' you mentioned - you might have support them as well as me
baller18
11-08-2013, 09:50 PM
Good on you moosie!
I am young as well, and I think a bit like you, obviously not as much knowledge as you are in the stock market.
In the same sense as why carry a massive burden of debt in buying a house and invest in a house, when all your capital is locked up. Especially when first home buyers are telling me what a great investment it is.
Don't get me wrong, property investment is great, if you have the capital, you are getting your dividend from rent and the capital value increases from demand and inflation. However, for first home buyers its a total different story.
So many first home buyers, telling me how great of an investment it is? I am thinking really? I'm thinking, you are carrying a massive debt, with no spare cash to invest it anywhere else. Yes, when house prices go up, you make money off the capital but that's only if you downsize! Otherwise, it'll just be the same when you are selling your house and changing into a new house.
zigzag
11-08-2013, 10:09 PM
moosie you sound like you are on the right track.
One thing in your favour is it sounds like you are not a sheep(follower) or belong in a herd.
I was able to retire at 38 years old.
When I was 25 I put all my egg's in one basket and 6 month's later I only had 5% of my original worth about $1500. Burns phelps on the ASX. ouch.
What I have learnt from then till now(apart from dont put all your egg's in one basket) is it is not so much time in the market rather more timing the market. Know when to put your money in and when to take your money out.
Also know when to stay the hell away(self preservation)
Dont always believe what is been said to you when you are being told what you want to hear.
Some of my friends think I am lucky but I believe you create your own luck.
Commonsence will prevail eventually.
I have always used the affordability charts when it come's to property, that is cost of a home compared to income's.
Right now and since 2009 that has said run run far away as fast as you can.
Reading your post I think you have a good handle on it.
Burns Phelps. I remember that one. That's when I learn't that it is OK to catch a falling knife, sometimes.
zigzag
11-08-2013, 10:33 PM
thats what i tried to do but found out it is bloody hard to catch a falling knife at the right time.
When i first looked at them they were $1.60 I bought at 92 cents and watch them fall to 3cents then sold out 6 months latter for 18cps ouch lost 45k which back then was pretty much everything
Me and Graeme Hart ended up doing alright. I made a few thousand, and he made a wee bit more. If you managed to retire 13 years later, then you must have bounced back very well! .....What is the topic of this thread supposed to be???
Stranger_Danger
11-08-2013, 11:08 PM
Me and Graeme Hart ended up doing alright. I made a few thousand, and he made a wee bit more. If you managed to retire 13 years later, then you must have bounced back very well! .....What is the topic of this thread supposed to be???
Graeme Hart did indeed do very well, and much like Snapiti, he had almost everything on it.
The thing I learned from Burns Philip - the insiders have a major edge over you, so either be at the table, or be very cautious of the motivations of those that are!
Interest rate increase's are inevitable and that will lead to a property price correction.
That is definitely a problem. However, a very large proportion of real estate is being bought by off shore investors. If the OCR was to be raised, the foreign investors won't be affected as much as our domestic property buyers, who are basically riding the waves created by huge sums of off shore money. All in all, alot of families might face a tough time...
iceman
12-08-2013, 01:10 AM
Well you've just met one then - I'm 29 and have just bought my first house in Auckland. I did the sums assuming the interest rates were 8%. One of my friends, 2 years younger than me bought a house doing his sums at 13%! I locked in 50% at the 5 year rate and 25% at 3 years. So no 1 year joy ride for us. I now feel the weight of the world on my shoulders and we will live frugally to pay off as much as we possibly can, so that we will be ready if/when interest rates go over 8% again.
The trouble in Auckland is an issue of supply, no two ways about it. It is hard to increase the stock as any developer going to the trouble of buying expensive land, getting resource consents, paying chorus and everyone else to service the land, plus putting a house on it is looking at $600+ as their cost. Then, of course, they want to make a profit!
When the fixed interest rates go up as everyone is coming off their 'cheap' 1 year fixed rates we'll see the fools who went into it without any margin having to sell off their houses. One can only speculate as to the possible effect of that on the market. My feeling is that it is not a bubble, but simply a supply/demand issue that is not going away.
PS. Using Kiwisaver funds for a first home deposit is a good use of the money - one is buying a long-term appreciating asset. And let's face it, there are no houses in Auckland for under $485K outside of South Auckland, so the deposit subsidy from the Government is pretty safe I would have thought!
Great post blacecb and I'm glad someone in the age group so unfairly and indiscriminately attacked by SD responded !
Is This Bull Cycle Over ?It seems so
http://i458.photobucket.com/albums/qq306/Hoop_1/images-1.jpg (http://s458.photobucket.com/user/Hoop_1/media/images-1.jpg.html)
craic
12-08-2013, 07:40 AM
Moosie, I'm sure that there are nicer parts of Napier than the Pandora Pond. I prefer my own bit, Bay View. But as to putting all yor eggs in one basket, the Berkshire Hathaway man asked the question ; why not - if its the right basket? After years of winning and losing, I have done just that and at an age when I should be checking out rest homes in my spare time, I have started actively trading in a small way. One of the benefits of this is that the capital value of by block of shares is of no real importance. If I can sell and buy back two cents lower then I make enough for my weeks beer and skittles. All I have to do is maintain the number of shares or increase it. Have you spoken to Farouk lately? If you don't know him, ask the bloke in the Westshore Chemists, he will point him out to you.
Not a lot of analysis so far on this thread so I’ll have a crack at it, not too many rocks then please ?
Cyclical bull markets end when economic growth first starts to wane within the cycle. Slowing GDP growth is indicative of lower forward company earnings and therefore sharemarkets accordingly correct.
One of the best traditional indicators of the end of a cyclical bull market is a nadir in the unemployment rate, companies predicting tough times ahead begin to shed staff, hence this is why many analysts obsess over non-farm payrolls and other employment data.
The trends below better paint the picture.
Whilst the FED continues to be accommodative, with an unemployment target in mind, it is difficult to imagine that the bull market will end unless there is some peculiar decoupling between GDP and unemployment. It equally seems hard to imagine that GDP will slide dramatically within a quarter or two immediately following the end of the FED accomodation.
Depending which FED officials we listen to, the tapering will occur between 7.2% and 6.7% unemployment. This then suggests that the bull market will continue until at least until the end of 2014. The FED forecast for 2015 is for YOY GDP growth between 2.2% and 3.8%, but that is a long way off and anything can happen between now and then.
So it would seem from the trends and traditional fundamentals that the market has at least another 12 months to run. But, as we know the charts are always right until there’re wrong.
Is it different this time ?
4699
4700
born2invest
12-08-2013, 12:39 PM
Why does it matter whether a "bull cycle" is over or still going?
The intention of stock investing should be to buy a single company, not the stock market index.
winner69
12-08-2013, 12:55 PM
Why does it matter whether a "bull cycle" is over or still going?
The intention of stock investing should be to buy a single company, not the stock market index.
Probably cause if market going up a good stock will go up more but if market tanks/crashes or whatever a good company will suffer to some extent. Even if it was to continue going up it won't go up as much as it would in a bull market
Bull/bear is more than up and down ...it's about change in sentiment (positive to negative)....or degree of risk averseness (if that is a word)
born2invest
12-08-2013, 01:09 PM
Probably cause if market going up a good stock will go up more but if market tanks/crashes or whatever a good company will suffer to some extent.
Once again, why does this matter?
If you are investing in a company, you should figure out a price you want to pay for it by discounting the cashflows/dividends/earnings back to a present value and then buy it below this price.
Trying to forecast macro-economics is impossible so why even attempt it? Even the "experts" are horrible at predicting macro-economics.
Xerof
12-08-2013, 01:09 PM
degree of risk averseness
Aversion lad, aversion
Why does it matter whether a "bull cycle" is over or still going?
The intention of stock investing should be to buy a single company, not the stock market index.Because in a rising market, even if you make a mistake, you'll probably still make money. A rising tide lifts all ships ...
born2invest
12-08-2013, 02:15 PM
Because in a rising market, even if you make a mistake, you'll probably still make money. A rising tide lifts all ships ...
I see. Fair enough point.
fungus pudding
12-08-2013, 02:33 PM
Because in a rising market, even if you make a mistake, you'll probably still make money. A rising tide lifts all ships ...
.....or even a pig is alright in a bull market.
It would take a lot for the local economy to dip significantly with this forecast tailwind. Dubai comes to Christchurch.
4702
Once again, why does this matter?
If you are investing in a company, you should figure out a price you want to pay for it by discounting the cashflows/dividends/earnings back to a present value and then buy it below this price.
Trying to forecast macro-economics is impossible so why even attempt it? Even the "experts" are horrible at predicting macro-economics.
Also..... bear market cycles wear you out mentally......just when you think things are coming right and rationality and saneness is reentering the market place another wave of bad news comes out and knocks you and your company around...this keeps repeating and by the end you feel like its all hopeless.....there's a sense of loneliness too ..most have disappeared to greener pastures or have crashed and burn't...."experts" keep telling you "you're an idiot being "in"..and in the end you are brainwashed in believing you are....
BIRMANBOY
12-08-2013, 05:11 PM
Traders and pigs...no difference...no discrimination as to quality is necessary just follow the trend:)
.....or even a pig is alright in a bull market.
BIRMANBOY
12-08-2013, 05:30 PM
To a value based investor this is readily apparent however many readers /followers on this forum look for the trading possibilities and then use macro economics to support decision making. As you point out this forecasting is limited in its effectiveness because of the complexity involved...youe gotta love them for trying though..Govts spend millions and employ thousands of brainiacs trying to decipher it all and they still dont get it right...but Joe investor is convinced he/she can do better.....HAh.
Once again, why does this matter?
If you are investing in a company, you should figure out a price you want to pay for it by discounting the cashflows/dividends/earnings back to a present value and then buy it below this price.
Trying to forecast macro-economics is impossible so why even attempt it? Even the "experts" are horrible at predicting macro-economics.
http://i458.photobucket.com/albums/qq306/Hoop_1/02eb5c7b-ab08-43f7-a1d7-1c3e59f0ea13.jpg (http://s458.photobucket.com/user/Hoop_1/media/02eb5c7b-ab08-43f7-a1d7-1c3e59f0ea13.jpg.html)
neopoleII
12-08-2013, 07:28 PM
the thing that concerns me, and has done for several years is the massive debt that is still sitting out there in society.
there is the pigs in europe, there is usa, ossie is slowing down and even china is noticing issues.
for a simpleton like me i wonder what happened to the trillions of debt?...... oh yeah.... its not main story on the 6pm news and therefor
no more problems to the worlds sheeple, so they go and spend up again..... to the hope of governments that they can trade there
way out of doom.
the US is buying 85 billion a month? in bonds to prop up the job market..... which hopefully will generate some tax revenue.
im paying off my debts as fast as possible and hoping to exit my shareholdings very soon.
IMHO current politics of the last decade has caused enormous damage to the western way of life.
im to simple to understand why it happened, but i know that you cant run up this sort of debt and expect it to go away after a few years.
the really funny / sad / perplexing thing i note is that a country the size of england with about 7% of the population has some of the most expensive homes on the planet
compared to it commodity based income scale. NZ
this is politics ..... nothing more.
_Michael
12-08-2013, 07:55 PM
http://i458.photobucket.com/albums/qq306/Hoop_1/02eb5c7b-ab08-43f7-a1d7-1c3e59f0ea13.jpg (http://s458.photobucket.com/user/Hoop_1/media/02eb5c7b-ab08-43f7-a1d7-1c3e59f0ea13.jpg.html)
Nice post!
there is the pigs in europe, did anyone watch top gear last night. Spain looks like a basket case.
No wonder they're in trouble with the scale of the investment made without buyers.
Yes saw TG as well
An abandoned airport as well, thought I don't think it would be left open, could be some cheap investments there if you are very patient and have a few $$ to possibly lose!
An abandoned airport as well, thought I don't think it would be left open, could be some cheap investments there if you are very patient and have a few $$ to possibly lose!ONe has to remember that Top Gear is fully scripted. It would definitely be under guard - with now over 60% youth unemployment, there would be tonnes of graffiti if it wasn't.
I'm just glad IFT hasn't bought it to expand its 'thriving' European airport business.
Moosie - not keen unfortunately - could probably afford the property but not the airfares there and back to make use of it. Plus Spain is a bit Chav for my taste, would much prefer something on the Croatian coastline (amazing and not too touristy yet though will be as it enters the EU), though I must admit, if you can get over the tourists, the Greek Islands are spectacular.
Back on track - I haven't followed up but Bernard Hickey did an interesting Tweet this morning - if there is such a big supply issue in Auckland housing, why are rents static, unlike Chch where they are increasing. This supports the bubble theory, or at least the good times are over, as the yields must be truly terrible by now. Anyone with Auckland rentals who can commment.
Xerof
13-08-2013, 10:17 AM
Could we relocate Auckland to Spain?
Minerbarejet
13-08-2013, 10:30 AM
Could we relocate Auckland to Spain?
Thats easy. Just drill straight down and keep going then drop Auckland in the hole.:):)
Billy Boy
13-08-2013, 10:41 AM
Thats easy. Just drill straight down and keep going then drop Auckland in the hole.:):)
One does not have to be that nasty to Spain.
BB:)
Onion
15-08-2013, 11:15 PM
A opinion that suggests the bull run is over and a 1987-like decline is in the offing:
http://www.cnbc.com/id/100950234
... and a counter that disputes the conclusions:
http://www.bigtrends.com/technical-analysis/why-2013-is-not-1987-despite-marc-fabers-prediction/
born2invest
16-08-2013, 11:48 AM
The simple fact is that the value of an asset (businesses, real estate, etc) cannot over the long term grow faster than its earnings.
Is This Bull Cycle Over ?
It seems so
The NZX50 has reversed creating a lower high (the Top was in May) and is now on its short term downtrend.... if this downtrend creates a lower low then it probably game over for the 4.5 year old bull.
born2invest
16-08-2013, 12:41 PM
The NZX50 has reversed creating a lower high (the Top was in May) and is now on its short term downtrend.... if this downtrend creates a lower low then it probably game over for the 4.5 year old bull.
I don't understand a word you just said. :confused:
Major von Tempsky
16-08-2013, 12:57 PM
That's because he is speaking in charting Pidgin English.
What counts are the gross dividend yields and P/E's of individual shares and their prospective ratios.
A value fundamentalist can like Warren Buffett ignore the silly overall fashions and concentrate on individual share values for the medium/long term.
lascar
16-08-2013, 01:00 PM
I don't understand a word you just said. :confused:
The top of nzx50 was around 4671 in May and it dropped to low 4316 in Jun. THEN climbed to lower high 4606 in July. If the current downtrend creates a bottom lower than 4316, the bull is over possibly.
I believe that is what Hoop said.
born2invest
16-08-2013, 01:04 PM
The top of nzx50 was around 4671 in May and it dropped to low 4316 in Jun. THEN climbed to lower high 4606 in July. If the current downtrend creates a bottom lower than 4316, the bull is over possibly.
That is how you "invest" ??
How confusing.
Mista_Trix
16-08-2013, 01:51 PM
That is how you "invest" ??
How confusing.
Or you could just not bother watching and sell during the panic and buy during the highs :-S
born2invest
16-08-2013, 02:22 PM
Or you could just not bother watching and sell during the panic and buy during the highs :-S
I analyse the business using business valuation methods.
I don't analyse the stock market and the ups and downs. The only reason I pay any attention to the stock market to see if the price it is offering to buy the entire business is less than what I think the business is worth.
I couldn't care less what the squiggly line is doing on a chart.
Mista_Trix
16-08-2013, 02:24 PM
I analyse the business using business valuation methods.
I don't analyse the stock market and the ups and downs. The only reason I pay any attention to the stock market to see if the price it is offering to buy the entire business is less than what I think the business is worth.
I couldn't care less what the squiggly line is doing on a chart.
Fair call, I'd rather use both, FA for the picks, TA for the timing.
Especially relevant during overburn.
noodles
16-08-2013, 08:36 PM
Well maybe george thinks the bull run is over.
http://www.businessinsider.com.au/george-soros-bought-puts-on-the-sp-500-2013-8
Personally, i don't know if it is over. However, i have similar puts on asx, s&p, and ftse. Hope i don't need that insurance!
Major von Tempsky
17-08-2013, 08:43 AM
Fair call, I'd rather use both, FA for the picks, TA for the timing.
Especially relevant during overburn.
That's a dangerous game as the chart line is liable to go in all sorts of different directions for exogenous reasons. And there's no reason to play it.
Am I the only investor here who keeps looking at the Depth info before I buy? (go to e.g. DirectBroking, put in the security 3 letter code, where it says Quote with a little arrow next to it you click on the arrow and then select Depth. It gives a table of all the sellers, how many they want to sell and what prices they will sell at. Ditto for the buyers and what price they will buy at. If you keep monitoring that you don't have to rely on unreliable charting and you can pick your timing exactly during the day and dive in and buy how many you want at the price you want. I do believe that Chartists are illiterate and are either unaware of the Depth table's existence or unable to understand it. Morons.)
percy
17-08-2013, 09:36 AM
What you forget to understand is most large buyers/sellers do not show their hand,so DB depth can be /is very misleading.
warthog
17-08-2013, 10:45 AM
What you forget to understand is most large buyers/sellers do not show their hand,so DB depth can be /is very misleading.
Absolutely.
If you watch depth carefully, you will see orders appear and disappear before your eyes.
Traders of large parcels wouldn't dream of showing you what they are doing. Rightly, they know that they can move NZX prices.
BIRMANBOY
17-08-2013, 11:31 AM
Agreed.....if it wasnt for the traders.....buying opportunities would be less frequent. If it wasnt for "value type investors" traders would be faced with a much greater volatility which would make trading that much more risky. We all feed off another..with the brokers clipping happily as we go.
Look, I'm a committed fundamental investor, but I don't diss the technicians and traders because they just as easily make the market as fundamental decision-making does. Now, just because traders or technicians behave in a certain way, I don't feel compelled to join in, nor do I necessarily agree with the hypothesis that directs their behaviour.
BUT THATS NOT THE POINT. If their behaviour is what is making the market, then I can use their psychology to better inform my own behaviour.
EG - if traders/technicians want to sell Diligent cheaply because of poor sentiment or patterns they don't like, then I'll happily exploit that if I want to buy more at a price that suits me.
If traders/technicians want to buy Summerset because of positive sentiment or patterns they like, then that may trigger my desire to sell if I think Summerset is getting overvalued according to the data I believe.
Instead of viewing each other as enemies akin to 17th century Catholics and Protestants, we should see each other as neighbours or cousins in a symbiotic financial relationship.
We're surely better investors if we are aware of the pressures and drivers in decision making, even if we don't like the other side's science.
Major von Tempsky
18-08-2013, 12:35 PM
Depth has always worked for me; using it I place an order that I know can be filled, in the rare occasions it moves while I am watching I adjust it so it works in the new situation.
I sit on my computer watching until I know its done.
I have to say that those who are casting aspersions on Depth are flying in the dark and showing themselves to be amateurs.
Charting does not even begin to substitute for it.
That's because he is speaking in charting Pidgin English.
What counts are the gross dividend yields and P/E's of individual shares and their prospective ratios.
A value fundamentalist can like Warren Buffett ignore the silly overall fashions and concentrate on individual share values for the medium/long term.
Hi Mayja Von Tempske...
I thort Id droor a chart just four yu...Fundermentil investeng yurseng Buffet as yur hairo wif Telecom reali payd offf ...eh???
Sssshhhhhh..wee wont tel Buffet about dis chart..........chart muzt bee wong, rite???
http://i458.photobucket.com/albums/qq306/Hoop_1/NZX50TEL16082013.gif (http://s458.photobucket.com/user/Hoop_1/media/NZX50TEL16082013.gif.html)
zigzag
18-08-2013, 02:42 PM
NZX50 is a gross index. You cannot compare it directly with TEL share price. I don't own TEL and don't do charts.
NZX50 is a gross index. You cannot compare it directly with TEL share price. I don't own TEL and don't do charts.
Be informative ...why not?
zigzag
18-08-2013, 06:01 PM
Be informative ...why not?
Because the TEL price doesn't gross up the dividends, and the NZX50 does, so you are comparing apples with pears.
zigzag
18-08-2013, 06:18 PM
More like apples with sugar-coated morphine tablets.
I'm sure it is easy to figure out yearly dividends and factor them though, no? Fact is, that initial capital has decreased quite dramatically!
Then you should compare it to a capital index.
Then you should compare it to a capital index.
yeah keep having this argument with the purists...No offence to you Zigzag..
A couple of years ago Phaedrus or Winner can't remember which pulled me up on it...I said the pattern difference was hardly noticable on the chart and I use it because often the capital index data is hard to find OK like comparing apples with pears but they are nashi pears ..huh....the trends and patterns are the same just the numbers are a bit different... I'll try to find it and compare as I'm interest to see for myself if there is a difference since back then....
westerly
18-08-2013, 07:47 PM
That's because he is speaking in charting Pidgin English.
What counts are the gross dividend yields and P/E's of individual shares and their prospective ratios.
A value fundamentalist can like Warren Buffett ignore the silly overall fashions and concentrate on individual share values for the medium/long term.
Tend to agree. After 30 years of buying selling I have come to the conclusion that you can,t predict the future, and trading is basically gambling.
Sure I know some. very few probably, do well but they also work incredibly hard to do this.
My own experience is patience is the prime requirement. Good companies occasionaly are very cheap, the Warehouse which not long ago was selling around $2.40 a good example. Telecom at $1.87 not so long ago another. I have also decided if I had not sold a share I would be far better off today. the dividends from some of the companies I have bought and sold if I had just held would have easily covered the losses on the many dogs bought over the years. Patience is number one.
Westerly
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winner69
18-08-2013, 07:59 PM
Because the TEL price doesn't gross up the dividends, and the NZX50 does, so you are comparing apples with pears.
Can you stop talking about apples and pears please its making me crave a cider
Agree about apples and pears not being comparable ..... Old Mout Pear Scrumpy has more body than the Apple Scrumpy
Try them sometime
Tend to agree. After 30 years of buying selling I have come to the conclusion that you can,t predict the future, and trading is basically gambling.
Sure I know some. very few probably, do well but they also work incredibly hard to do this.
My own experience is patience is the prime requirement. Good companies occasionaly are very cheap, the Warehouse which not long ago was selling around $2.40 a good example. Telecom at $1.87 not so long ago another. I have also decided if I had not sold a share I would be far better off today. the dividends from some of the companies I have bought and sold if I had just held would have easily covered the losses on the many dogs bought over the years. Patience is number one.
Westerly
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I strongly agree with your principle-Patience is number one. But you have to be very patience and follow the market very regularly. Sometime you have to wait years and then you get a King Hit. FPH was selling for $1.90, MHI $0.60, AIA $1.90
Under Surveillance
18-08-2013, 08:34 PM
I strongly agree with your principle-Patience is number one. But you have to be very patience and follow the market very regularly. Sometime you have to wait years and then you get a King Hit. FPH was selling for $1.90, MHI $0.60, AIA $1.90
Don't tell that to those for whom patience has been number one with dogs like RAK and PPG and PPL and PGW and GFF and .....? The King Hit coming to/from RAK, for one, looks to be most undesirable.
Zigzag........Because the TEL price doesn't gross up the dividends, and the NZX50 does, so you are comparing apples with pears.
Hoop........OK like comparing apples with pears but they are nashi pears
Winner........Agree about apples and pears not being comparable ..... Old Mout Pear Scrumpy has more body than the Apple Scrumpy
Bugger all difference from that of my original chart post ...comparison by Big Charts must use NZ50 Cap...eh?
http://i458.photobucket.com/albums/qq306/Hoop_1/TELvNZcap16082013.png (http://s458.photobucket.com/user/Hoop_1/media/TELvNZcap16082013.png.html)
This arrived in my email inbox this morning...If you free subscribe to Stockcharts and become a chart Watcher then you will have received this email too.
For those who didn't get this...Its an email about where we think we are in the present bull market cycle and how we can use interactive charting to gauge more accurately that fact.
Below is a diagram showing the theoretical order of things between the Market and the Economic cycle from Sam Stovall's book
http://i458.photobucket.com/albums/qq306/Hoop_1/StagesMarketEconomiccycle.png (http://s458.photobucket.com/user/Hoop_1/media/StagesMarketEconomiccycle.png.html)
Of course in practice it's always a little different due to some networking variable factors being abnormal and effecting sector performance....but...overall one can better guess where we could be at within this present day bull market cycle...however using memory recall can be rather inaccurate way to determine where we are......Modern technology in the form of interactive charts takes away most of the inaccuracies to help you determine and better guess where we are.
The interactive chart relates to the S&P500...although NZ sector markets are probably different the good thing is that the NZX50 index is in sync with the S&P500 index and has been since 2009 therefore both have similar aged bull market cycles.
This link brings up Stock Charts interactive chart (http://stockcharts.com/freecharts/perf.php?[SECT]) showing all those sectors outlined in the diagram above ...use the slider at the bottom of the chart....enjoy
Interesting chart, thanks Hoop for the posting.
born2invest
19-08-2013, 03:58 PM
Don't tell that to those for whom patience has been number one with dogs like RAK and PPG and PPL and PGW and GFF and .....? The King Hit coming to/from RAK, for one, looks to be most undesirable.
Time is the friend of the wonderful business, the enemy of the mediocre.
Lesson? Patience doesn't pay off if you buy sub standard businesses.
BIRMANBOY
19-08-2013, 04:25 PM
Mostly correct but unfortunately hindsight is the crucial factor that enables investors to come to that conclusion in many instances. No-one (except punting gamblers) sets out to buy substandard or mediocre business's. Some start out like that but most are full of the joys of spring and bursting with "soon to be realized greatness". Problem is that patience if illadvised can make things worse...."its gotta turn around soon"
Time is the friend of the wonderful business, the enemy of the mediocre.
Lesson? Patience doesn't pay off if you buy sub standard businesses.
very patiently waiting for my chase and equity corp dividend
noodles
19-08-2013, 07:30 PM
This arrived in my email inbox this morning...If you free subscribe to Stockcharts and become a chart Watcher then you will have received this email too.
For those who didn't get this...Its an email about where we think we are in the present bull market cycle and how we can use interactive charting to gauge more accurately that fact.
Below is a diagram showing the theoretical order of things between the Market and the Economic cycle from Sam Stovall's book
http://i458.photobucket.com/albums/qq306/Hoop_1/StagesMarketEconomiccycle.png (http://s458.photobucket.com/user/Hoop_1/media/StagesMarketEconomiccycle.png.html)
Of course in practice it's always a little different due to some networking variable factors being abnormal and effecting sector performance....but...overall one can better guess where we could be at within this present day bull market cycle...however using memory recall can be rather inaccurate way to determine where we are......Modern technology in the form of interactive charts takes away most of the inaccuracies to help you determine and better guess where we are.
The interactive chart relates to the S&P500...although NZ sector markets are probably different the good thing is that the NZX50 index is in sync with the S&P500 index and has been since 2009 therefore both have similar aged bull market cycles.
This link brings up Stock Charts interactive chart (http://stockcharts.com/freecharts/perf.php?[SECT]) showing all those sectors outlined in the diagram above ...use the slider at the bottom of the chart....enjoy
Hoop, did you work out where we are at? I tried, but could not correlate theory with reality.
winner69
19-08-2013, 09:14 PM
Hoop, did you work out where we are at? I tried, but could not correlate theory with reality.
I think he has us approaching a market top and heading into bear territory as the economy continues to get better
Counter intuitive that statement eh
This article of interest below ran yesterday in the New York Times with the attached plot.
http://krugman.blogs.nytimes.com/2013/08/19/anna-karenina-and-the-business-cycle/?_r=0
As we are aware cyclical bull cycles generally end with a nadir in unemployment rate, the present US unemployment rate is 7.4% and is dropping at a slow and linear rate, still well above the statistical US unemployment nadir range of 3.3% through 5.8% as indicated below.
4731
Thanks for that Mac...I'll add it to my list of signals showing an equity bull market cycle top
TimmyTP
22-08-2013, 09:44 AM
Just wondering if anyone can offer a view on the validity of this theory (http://www.lowryresearch.com/reports/the%20warning%20signs%20of%20major%20market%20tops .pdf?goback=.gde_62302_member_267034344), especially in relation to NZX?
It all seems very sensible, would take some work to apply it to the NZX and I imagine it would be relevant, but I'm a bit unsure whether the NZX is big enough to apply this sort of statistical analysis.
Quick précis so I can claim to have added a little bit of value to this:
Fall-off in 52-week highs
Up 6-12 months before the top, expect to see "fading strength" in the form of a reduction in new 52-week highs
Advance-Decline Lines
MA lines for small-, mid- and large-cap indexes fall in that order, so you can see the weakness in the overall market building
Market Index Divergences
Divergence in MA between sectors
Percentage of Stocks Above their 30-Week Moving Averages
Essentially, as we reach the top, the number of stocks reaching highs becomes more selective - the tide is no longer floating all boats
Buying Power vs. Selling Pressure
Basic supply and demand - not sure how to source the data to measure this in NZ though - and of course we have undisclosed orders on the market and people with their hands in their pockets waiting.
It's going to be a while before I have time to try to gather some stats together, so I thought I would share this in the meantime. Also interested in any reaction to these techniques - have they been soundly debunked?
DISC: I have absolutely no connection to Lowry research and I did search this forum for references to this theory before I posted this. If it's old-hat, I apologise!
Yes TimmyTP interesting work done by Lowry Research.
I have an experimental model in progress on the DailyS&P500 index tracker thread using similar methods to Lowry research I use it not specifically to find the cyclic top reversal but to find the near top before a bull market correction kicks in...it has proved very accurate to date.
The sentiment indicator I use is similar...I use the New York stock Exchange % of shares above the MA200 day line..(NYA200r)
Yes I too notice the index rising up with the %number of stocks not nearly as high as previously.....
I also notice there is a strong correlation with various chart patterns and the NYA200r...a rapid uptrending line has over 90% of the stocks above the MA200 line ....A bearish double top pattern about 50-60% and slightly higher high (an event that can develop into bearish head and shoulder patterns) downslope from 80 to 60%.
The problem with sentiment indicators are they are very sensitive and probably too sensitive to use in isolation when identifying cyclic reversals... desensitising these indicators can be done by changing the settings and might work
.
There can be a problem when these sensitive indicators start firing off as it can be a cyclic reversal or a large bull market correction ..at that time you don't know which.....but if you use these indicators firing bearish signals as a get out warning discipline, the problem goes away as you are out of the market anyway.
Have a look on the Daily S&P 500 Index tracker thread 18/08/2013 post #1444 (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page97)...see the latest S&P500 top, it has only 68% of stocks above the MA200 line!!!!!!!!!....this is a major bearish factor, it indicating a big bull market correction or possible cyclic reversal....Notice also on that chart other S&P500 highs (peaks) with higher % stocks over MA200 line the resulting corrections being a lot shallower....The bearish Head and shoulder pattern lasting 6 months in 2011 shows the theoretical bear pattern, and with the RH shoulder peak showing only 71.9% stocks above the 200MA line..indicates a large correction was coming... and it did!!
I would like to expand my very successful (so far so good) experimental model to the NZX index but unfortunately NZ data is scarce...if anyone has the code for % of NZx stocks above the MA200 line or any other similar sentiment indicators, I would glad if they could share it with me.
janner
22-08-2013, 08:56 PM
very patiently waiting for my chase and equity corp dividend
Hahaa.. 1987. Wasn't that a great learning curve.. For those with the balls to be still in of course..
Mista_Trix
23-08-2013, 06:21 PM
My workmate just asked me what he should invest in ... I wonder if we're getting close, given every man and his dog seem to be getting in.
Corporate
23-08-2013, 09:54 PM
My workmate just asked me what he should invest in ... I wonder if we're getting close, given every man and his dog seem to be getting in.
I still think there is a fair way to go. You'll no it is getting close when your work mate is in the market and then starting to tell others to get in!
My advice Timmy is to put your charts in the bottom draw for the next six months, go back to basics and focus on the economic fundamentals.
One of the difficulties in using sentiment indicators is seeing through all the QE distortion.
The S&P500 has been boosted by all that accommodative liquidity, thus the S&P500 is higher than it would normally be at this stage in a more normal bull cycle, if I may risk using the 'normal' word.
Many of the chart based sentiment indicators, during this cycle, just reflect the market adjusting to QE tapering and a well needed period of consolidation whilst the US economy catches up with elevated S&P500 levels.
The fundamental indicators suggest that this bull cycle has a long way yet to go. IMHO a likely possibility is that the markets will move sideways (with volatility) over the next six months whilst the US economy catches up with the S&P500. Tapering facilitates this process as it continues to provide liquidity into the S&P500 in a graduated manner while economic growth continues to improve.
Bull cycles end when the economics turn negative and the S&P500 is a forward indicator of economic performance, thus it makes better sense to focus on the economics not the distortions.
My advice Timmy is to put your charts in the bottom draw for the next six months, go back to basics and focus on the economic fundamentals.
One of the difficulties in using sentiment indicators is seeing through all the QE distortion.
The S&P500 has been boosted by all that accommodative liquidity, thus the S&P500 is higher than it would normally be at this stage in a more normal bull cycle, if I may risk using the 'normal' word.
Many of the chart based sentiment indicators, during this cycle, just reflect the market adjusting to QE tapering and a well needed period of consolidation whilst the US economy catches up with elevated S&P500 levels.
The fundamental indicators suggest that this bull cycle has a long way yet to go. IMHO a likely possibility is that the markets will move sideways (with volatility) over the next six months whilst the US economy catches up with the S&P500. Tapering facilitates this process as it continues to provide liquidity into the S&P500 in a graduated manner while economic growth continues to improve.
Bull cycles end when the economics turn negative and the S&P500 is a forward indicator of economic performance, thus it makes better sense to focus on the economics not the distortions.
My advice Timmy is to put your charts in the bottom draw for the next six months, go back to basics and focus on the economic fundamentals.
One of the difficulties in using sentiment indicators is seeing through all the QE distortion. ..........
MAC...Sentiment indicators measures pieces of "the state of the entire market environment at the present time.....there is no difficultly....You never shoot the messenger..Good fundamentals or not if the market sentiment is bad and you are "in" you will lose a lot of sleep and at rare times most of your money....ask any DIL investor atm.......Using sentiment indicators gives you a warning, its up to you whether to get out or not....Sentiment indicators are variables...they change, in a month they could be buy signals who knows? MAC, you have not come to grips with sentiment indicators...sentiment indicators going bad during a Bull market cycle obviously gives warnings of a healthy correction...normal healthy bull market corrections average -10%...they hurt!!!!!!..but the indicators give you an option to get out and come back in again at a lower level..giving you a better investing efficiency and with a lower risk... by keeping you out when that rare time happens, an unexpected drastic correction event which kills the bull. Use DIL as an example sell at $7,20 at the get out sign...and now waiting to re-enter.....
The S&P500 has been boosted by all that accommodative liquidity, thus the S&P500 is higher than it would normally be at this stage in a more normal bull cycle, if I may risk using the 'normal' word.
Many of the chart based sentiment indicators, during this cycle, just reflect the market adjusting to QE tapering......
In theory Mr Market analyses all factors taking in account all factors fundamental and psychological (whether bias or not)...therefore Market Sentiment indicators are affected by all these factors...To eliminate,ignore or dismiss an unwanted factor invalidates the total equation..... Whether someone terms a new normal or old normal or any other normal it doesn't matter...Its best to forget about the normal because Mr Market being in a complete "normal" state is a rare occurrence...... normal is only a brief mental state by the group (herd) of the market participants that the market moves through while going from one side of the spectrum to the other. Unfortunately the herd think there's a new normal when the market movement around the spectrum hesitates for an "unexpected" length of time and long enough for the herd to slowly become accustomed to this state.....What has to be remembered is a cycle is always a cycle some factors may slow it and temporarily stop it ("new normal") but these factors are never permanent because they are variables within the cycle...eventually pressures mount as other variable factors come into play and the cycle resumes and if under pressure it may suddenly "correct" at high speed....a fact of life which all can be measured by indicators at that time of happening..like a speedometer in your car. You don't adjust or dismiss the car speedometer because your car suddenly goes at a speed you didn't expect it to it to and it is not "normal"..do you?.....The speed of you car going faster or slowing down or stopping is always being measured at that moment in time by the cars speedometer....just like a TA momentum indicator..eh??
The fundamental indicators suggest that this bull cycle has a long way yet to go....Mac, that is an assumption not yet fact. The problem with fundamentals is that the data is out of date the day after they are announced and with time going further out of date....forward analysis is having to rely on up to the moment, reliable, valid, unbiased information... and the big question to ask yourself... Does this new information include everything!!!.??
Bull cycles end when the economics turn negative and the S&P500 is a forward indicator of economic performance, not the distortions.
The statement above is not true,,and it contradicts itself.
Research has shown the Equity markets top out (bull dies) before the business cycle (economics) turns negative....and yes the S&P500 is a foward (leading) indicator you are correct with that one.
Distortions are a part of the markets it's always happening...so it would pay to just get use to that fact and take advantage of it when possible.
thus it makes better sense to focus on the economics...If economists forecasts can't get right, what makes you think that us mere mortals can do better?
kizame
24-08-2013, 02:24 PM
I still think there is a fair way to go. You'll no it is getting close when your work mate is in the market and then starting to tell others to get in!
No, it's got to be taxi drivers.
Yes I remember 87,and workmates were definately buying the BIL's and Equitycorps and Chases.
It will be interesting to see how it plays out,the dow is looking tired,but not so for the nasdaq or s&p 500 or the russel 2000.
Bond yields are trekking higher in the states,not good for stocks.
Thanks Hoop, do enjoy a healthy discussion.
I'm a value investor and invest for long durations, although, like you I do intend to be out of the market when the bull is about at its peak. Between now and then I don't mind the odd 10% correction coming and going, they are healthy for the market and I don't get stressed by them.
If you are using the right economic indicators the S&P500 leads the economic cycle by only a month or two.
That's plenty of resolution for me to both assess the right time to exit and to confidently confirm that decision is correct.
It can be just as unrewarding to exit the market way too early and miss consistent growth as it is to exit 'a little late'.
This is a substantial upward revision in US GDP growth for analysts assessing the economic cycle. The bull it appears is alive and kicking.
I’m continuing as always to watch the monthly fundamental data closely and am updating my models given that the FED has recently revised historical GDP assessment methods.
http://www.scoop.co.nz/stories/BU1308/S01152/while-you-were-sleeping-us-growth-excels.htm
This is a substantial upward revision in US GDP growth for analysts assessing the economic cycle. The bull it appears is alive and kicking.
I’m continuing as always to watch the monthly fundamental data closely and am updating my models given that the FED has recently revised historical GDP assessment methods.
http://www.scoop.co.nz/stories/BU1308/S01152/while-you-were-sleeping-us-growth-excels.htm
Hi Mac...I too like healthy discussions as they tend to make all of us think outside our own mindset and explore different possible paths...
Here's one for you ......If research has proved that the Equity Markets are leading indicators for the economy..then surely using forward fundamental analysis for equities based on the latest updated economic data is futile...eh?
Well, depends on your investment persona I think.
Bull cycles end when the smart money realise that forward earnings growth will not sustain PE multiples. Leading economic indicators parallel that assessment and analysis of forward earnings.
I retain a lot of respect for the technicals also, I just prefer to assess more from a basis of fundamental cogs and wheels rather than assessing from the charts and sentiment. Happy to leave the touchy feely stuff to others, each to their own.
Goldstein
31-08-2013, 12:08 AM
I wonder whether you need to consider both TA and fundamentals. It's a bit like sailing a boat, you can have a favourable breeze, but an unfavourable current. I didn't used to like TA at all, but have realised over the years that even though a company may have good fundamentals, there can be issues that you just know about and that TA may give you a hint about the unknown and to be cautious. There are definitely a few stocks around on the NZX that are in this catgeory at the moment.
Anyway, probably too many beersies for Goldstein.
jimmyco
31-08-2013, 01:17 PM
I wonder whether you need to consider both TA and fundamentals. It's a bit like sailing a boat, you can have a favourable breeze, but an unfavourable current. I didn't used to like TA at all, but have realised over the years that even though a company may have good fundamentals, there can be issues that you just know about and that TA may give you a hint about the unknown and to be cautious. There are definitely a few stocks around on the NZX that are in this catgeory at the moment.
Anyway, probably too many beersies for Goldstein.
http://www.youtube.com/watch?v=CHe6hJlCNlIhttp://www.youtube.com/watch?v=CHe6hJlCNlI
:)
winner69
01-09-2013, 11:01 AM
Hoop - seen this weeks Mauldin thing
http://www.mauldineconomics.com/frontlinethoughts/how-do-i-hate-thee
The chart showing flat earnings (not picking up after the decline either) and the rise in marke PE is interesting
And you love copper eh ....the chart of Copper v S&P500 is scary ....better buy copper methinks
Looks like the youted imoroving economy not increasing earnings but the markets are on a roll
winner69
01-09-2013, 08:27 PM
OMG
Don't watch the video' that are embedded if you want tonsleep tonite
http://www.moneynews.com/MKTNews/Massive-wealth-destruction-economy/2013/06/20/id/511043/?promo_code=1447F-1
winner69
01-09-2013, 08:49 PM
Bugger it - can't download that video
I can guess the contents so will sleep easy tonite
Valuegrowth
02-09-2013, 08:10 PM
I believe we are closer to end of current bull cycle for some markets. However there may be great opportunities in some sectors. I expect volatility and correction in the short run. In the mid term and long term almost all markets such as developed, emerging and frontier markets including New Zealand market will have bull markets time to time. Even in secular bull market there may be so many short term bear markets, correction and pull backs.
We will see new bull currencies in the currency market. Both AUD and NZD will continue their bear journey. There may be great demand for New Zealand milk and meat from all over the world in the coming decades.
Remember always there may be bull markets somewhere. Some commodities will have bull trend. It is time to identify next bull currencies, commodities, stocks and sectors. There are cycles for every type of assets. Tapering is not the end of world.
There are positive affect in tapering. Tapering may benefit exporters in Asia Pacific region. USA consumers may create more demand for product and services. There may be some support for commodity prices. Actually tapering will benefit the markets.
I believe oil may come down below $100 in 2014. There may be short term spike in oil prices due to short term events.
My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.
winner69
03-09-2013, 02:01 PM
will this cause the next round of jitters on the markets
no wonder the world is in such a sorry state .... never get paid back will it
Aaron
04-09-2013, 08:24 AM
I think the plan is to hold interest rates low and let inflation take care of the debt. Talk of tapering by the Fed is just not possible unless inflation is going gangbusters, the quickest way to inflation is to increase the money supply. They probably just can't get it out into the economy fast enough as people might be starting to show reluctance to take on more debt.
Are wars inflationary?(I think they are) Obama might be onto something with bombing Syria, also a war would help him to increase the govt debt limit as I get the feeling a lot of US citizens like it when they attack other countries and Congress wouldn't want to upset the people. Also he won't look like a wimp, which is always a good reason for doing something.
back to the thread, I have no idea if this bullcycle is over I am cashed up and waiting for the bargains but fighting central banks hasn't been working for me for the last year or so. I am being patient but can't see what will cause a major crash of financial markets.
This article provides a fair view IMO of where US and NZ inflation is heading.
http://www.interest.co.nz/opinion/66176/roger-j-kerr-says-strong-economy-means-inflation-pressures-will-lift-us-tapering-means
There has been a little discussion in the media recently regarding the TNX (CBOE 10 year interest rate) raising to 3% and what this may mean for both the US economy and share markets.
This link is the best explanation I’ve read in the last few months of what this may or may not mean to share markets, and to the bull cycle in respect of any correlation between the TNX and S&P500.
http://qvmgroup.com/invest/2013/06/22/sp-500-pes-versus-10-yr-treasury-rates-from-1957/
Valuegrowth
10-11-2013, 04:26 PM
Still bull cycle is intact for few sectors, some markets, some commodities and some currencies.
Few months back speculation on tapering made panic among market players globally. There were heavy foreign sales as well. Emerging market currencies, gold and stocks had big sell off. This situation created great opportunity for some players. Later markets and currencies rebounded strongly including Indian rupee and their market. We are seeing speculation on tapering again. As a result of this emerging markets and currencies had some weakness during last week. This may be another opportunity for intelligent players. At least there may be sector hunting opportunities.
My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.
Merry Xmas to you all,
I thought I would update this chart heading into a new year and now that we have some clarity on a likely FED tapering schedule through to the 6.5% unemployment target.
The blue band on the chart between 3.3% and 5.75% represents the historical range of unemployment nadirs from 1968 through to the present day.
With the FED intending, at this time, to likely keep interest rates at zero through 2014 it does seem to provide an ongoing continuity to the accommodative floor under the equity market.
We should be watching for a switch to an inflation focus toward the end of 2014, and anything can happen including meteors, but at this time 2014 outlook is looking fine IMHO. Perhaps we will see a multiple expansion phase start to kick in over the next 12 and beyond.
5209
http://www.sharetrader.co.nz/showthread.php?9278-Is-This-Bull-Cycle-Over&p=421197#post421197
This post is not investment advice, DYOR.
winner69
22-12-2013, 03:40 PM
A good table below showing what the US markets might do next year based on this formula
Return = Dividend + (1 + Earnings Growth) X (1 + P/E expansion/contraction) – 1
The cell highlighted in yellow – earnings growth of 6% and an ending P/E of 15 – is the average long-term situation. In other words, if 2014 is "average," we'll see a 16% loss. But what if it's not average? The purple cells highlight a band around the average and indicate a performance range between a 13% gain and an 18% loss.
It came from here
http://d21uq3hx4esec9.cloudfront.net/uploads/pdf/131221_TFTF3.pdf
From posts here I reckon somewhere between the +13% and +48% mark ..... EPS growth of 8% and as the 0% rates keep everybody happy a PE expansion from current to somewhere between 20 and 25
Another great year on the US markets .... and even though an election year in NZ this is good news for the NZX as well
Another year of making hay or whatever the saying ..... before it all comes tumbling down (like the numbers in the top row
Hmmm ...no mention of inflation...
A bit of theory for the record......the primary driver of the sharemarket over time is the PE Ratio (annualised)...the primary driver of the PE Ratio within secular stock market cycles is inflation...
At the moment the only thing that is making the present Wall St PE Ratio of about 18 seem fair to fully valued is the inflation level is at that 1.5% sweet spot, any higher or any lower than 1.5% the PE Ratio will be considered overvalued...It's no secret that the PE RATIO is distorted at present due to abnormally high profit margins which are cyclic in nature so they can not remain in this high state...and back to my harping of the present secular bear market cycle which (who, during this exuberance, nearly everyone seems to have forget about this) is a very long term down trending PE Ratio event..
So!!!.. all these ducks have lined up in a negative row....... With this "duck" pressure it will take 10+% earning growth just for the share market to tread water ... so as the market is mean reverting this present share market boom will result in a karboom further down the track (plus with interest!! [duck poop:p]).......
When????................My personal view is that the market is irrational atm.......the ol' saying from John Maynard Keynes, English economist (1883 - 1946). .. the market can stay irrational longer than you can stay solvent....(shorters beware..eh?)
USA inflation rates (http://www.tradingeconomics.com/united-states/inflation-cpi)
winner69
23-12-2013, 01:55 AM
But the red line in Mac's chart is going to fall further which means the blue line is going to head north still.
I like mac's outlook better. Unemployment nadirs, accommodative floors and multiple expansions are good news for 2014
So another 20% plus year methinks
Remember.....at the top of the bull market cycle nearly everyone is bullish..those who are not are criticised and ridiculed...
Oh... that employment/S&P500 chart certainly looks good .....huh?....Hmmm I wonder why they started at 1994 a rather strange time to start a chart dont you think..eh??
Lets see what the previous 5 years are like before 1994
ahhha
http://i458.photobucket.com/albums/qq306/Hoop_1/liesdamnliesandcharts.png (http://s458.photobucket.com/user/Hoop_1/media/liesdamnliesandcharts.png.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/sampp500vunemploment1.png (http://s458.photobucket.com/user/Hoop_1/media/sampp500vunemploment1.png.html)
Maybe... if this red circle event area can happen ..so could its inverse counterpart....You guys have to remember history shows that the sharemarket and economy don't correlate very well
Most fundamental theories are pointing to a cycle reversal ....this sharemarket is mature bull in its last stage of the cycle...it continues to ignore the basic fundamentals ..as they all do due to the natural lagging effect.
winner69
23-12-2013, 01:52 PM
Unemployment rate is generally considered (by the majority) a lagging indicator, not a leading indicator.
At least that's the common thinking, for what's it worth
Hoop, everyone is entitled to a view, some are bulls, some are bears, some like myself are just neutral observers. Though if someone else does happen to have a differing view I’m not sure that is really a good reason to call someone a liar ?
My view does happen to be that the more recent decades are more closely representative of present day fiscal and monetary policy then the preceding 20 or 40 years.
An unemployment focus has been important through 2012 and 2013 as it’s been the FED’s primary objective in stimulating the economy and they will continue to be accommodative until their unemployment objective is either met or they fail. Similarly, their secondary focus, inflation and interest rate objectives will see further accommodation in 2014, they have recently affirmed as much.
Most economists out there in the world would not agree with you that there is no linkage between sharemarket cycles and fundamental analysis, but I bet you can find some.
Each to their own view, DYOR, keep watching and monitoring.
winner69
23-12-2013, 03:07 PM
Hoop - a recent chartoftheday.com showed the current secular bear market is still in place. Started way back in the early 2000's. These secular markets last 15-20 years on occasions don't they? (secular bear markets are those where PE ratios decline from a high to a new low ... not a price thing)
After recently trending up to the 19 mark solid earnings over the last 6 months have kept it at about that19 mark. Some would say that is positive ..... maybe as earnings get even stronger the PE won't go any higher
Casino
23-12-2013, 04:56 PM
My two sense on the matter ... markets overreact ... keep it simple in a rising market ... set those stops and wait and see ... More to go in the US, less to go in NZ.
Similar to how I see it. Do you think we may see a 10-20% correction here without one in the US? Would love to see some instruments for times when NZ market goes sideways or down.
Hoop, everyone is entitled to a view, some are bulls, some are bears, some like myself are just neutral observers. Though if someone else does happen to have a differing view I’m not sure that is really a good reason to call someone a liar ? Tongue in cheek stuff Mac, so don't get all serious over it... I'm sure Statisticians don't lose any sleep over that (in)famous Quote..also remember I'm a chartist so I guess I'm taking the mickey out on myself as well :)
My view does happen to be that the more recent decades are more closely representative of present day fiscal and monetary policy then the preceding 20 or 40 years. Most definitely agree....E.g...Before monetary policy interest rates had no correlation with inflation or PE Ratio, now they do...and there are recent systems added (more cogs added to the old gearbox) over the years..but lets not forget the primary systems which never change due to the laws of market physics, the market being different this time is usually a mirage.
An unemployment focus has been important through 2012 and 2013 as it’s been the FED’s primary objective in stimulating the economy and they will continue to be accommodative until their unemployment objective is either met or they fail. Similarly, their secondary focus, inflation and interest rate objectives will see further accommodation in 2014, they have recently affirmed as much. Yes...This type of concentrated QE is " breaking new ground" It's not just tweaking the systems its creating situations so as to warp the networked systems, to meet the desired objectives that the FED wants It unemployment policy? is actually a welcomed result not an effect (lagging) from the FED trying to prevent lack of economic growth by warping the financial markets via increasing cheap credit to help create growth ....Its basically a two edged sword and needs superb skills and super fast reaction time to master it....I must admit the FEB is mastering it very well so far if it had failed there would've been a depression......I think most people out their don't realise how powerful this type of QE has been...It have warped several systemic cycles to the point that they are dysfunctioning. One of those dysfunctioning systems and the one I'm most focused on is the Equity Market.
Not known by many as it has not been reported by the media (except in ST by me) is the record breaking 2012 (and it seems 2013 as well) never in modern history (130years) has the DOW record 4 yearly increases in a row during a secular bear market cycle until now..never has the DOW recorded such a high PE Ratio 13 years into a secular bear cycle...The secular bear has been forced to hibernate,,,The reason is fundamental the inflation rate at a constant ~1.2% is keeping the PE Ratio above its "normal"...however QE is the causitive...it is preventing the market system to quickly recorrect itself using a more damaging deflation course.
Most economists out there in the world would not agree with you that there is no linkage between sharemarket cycles and fundamental analysis, but I bet you can find some. Mac ??? ..I don't agree either...where did you get that stupid notion from...and you thinking that I would even think that way I should take it as an insult to my limited intelligence :)..
If you read my post I'm saying most fundamentals are negative now, so fundamental pressure is mounting.... the market is not noticing this as it is lagging but it will correct this divergence eventually and stop dysfunctioning.
Does that indicate a crash is imminent??...these rarer capitulation events do happen but no, not necessarily so..The decreasing trend in the PE Ratio puts downward pressure on the S&P500 index...If the FED is successful keeping both inflation & interest rates low and constant with a 10% earnings growth within this recovered economy we should see a plateauing scenario for the S&P500... the longer this "breather" scenario the better for the survival of this old bull market cycle or a very shallow friendly "teddy bear"cycle before a new bull...People relate to the Share Market as either going up or down but often it goes sideways within a trading range but for some reason people don't remember these common occurrences.
Each to their own view, DYOR, keep watching and monitoring... Its not my view I'm just relaying the messages given to me from the US networked systems but yes keep watching/monitoring...
...........
winner69
24-12-2013, 08:49 PM
Here's a view that says all this QE and tapering talk is all a load of **** .....actually it never has been 85 billion a month but heaps more and it ain't going to stop. Like the bit about what is inflation - **** costing more.
http://kunstler.com/cluster****-nation/jive-talkin/
Jive Talkin’
And so in his valedictory, Federal Reserve chief Ben Bernanke pulls one last dead rabbit out of his hat — it suffocated while the head-fake taper percolated in Ben’s brain lo these many months of jive talkin’. As the year turns, the central bank will supposedly monetize $10 billion less debt per month — $75 billion down from $85 billion — with $5 billion each deducted from the US Treasury stream and the rotten mortgage barrel. Was there a catch?
You could say that. For instance, what to make of the curious report out of the American Enterprise Institute by John H. Makin saying that the Fed’s actual purchase of debt paper amounted to an average $94 billion a month through the year 2013, not $85 billion? I have averred often in this space to the Fed’s ability to conduct back-door buying operations of all kinds of janky financial crapola — and in a world where claims on promises to pay hugely exceed anyone’s ability to pay or re-pay, there’s as much of it out there as there are plastic grocery bags floating in the horse latitudes of the Pacific Ocean. The Fed can hose up bad paper all the live-long day and apparently get away with mis-reporting what it is doing, and is the country any the worse for it?
At the end of that live-long day the American people are left in a matrix of lies so thick and sticky that all the de-greasing agents supposedly vested in freedom of the press will not avail to liberate them, and they are suspended like little morsels of winged prey to be sucked dry by the descending spiders of crony capital.
Bottom line: the taper so far is just $1 billion shy of being completely fake (so far as anyone knows), a magician’s mis-direction from the real action of the gag, which was removing the previous “threshold” of a 6.5 percent unemployment figure for raising interest rates — in other words, promising ZIRP (zero interest rate policy) forever! That would green light a never-ending continued carry trade (i.e. looting operation) of Too-Big-To-Fail-or-Jail primary dealer banks extracting “free” money from the Fed window for conversion, abracadabra, into, say, student loans at 5 percent, guaranteed to enslave the generation now coming into adult flower. (The catch there being that they might flower into revolutionaries eager to string up such bankers from every lamp post in the Hamptons.)
I know there is a lot of confusion “out there” about what constitutes inflation — is it a so-called “monetary phenomenon” or just **** costing more? — but that’s probably too fine a distinction for “folks” (to use the president’s favorite term) who can’t pay five bucks for a jar of peanut butter. The price of everything except the yellow junk called gold, seems to be shooting up. Pretty soon, they’ll be using that worthless gold to solder the drain pipes on bathroom fixtures out where the housing starts roam.
Which brings us to the interesting question: exactly what mysterious entities have been systematically pounding the price of the yellow stuff down in the PM markets like Tony Soprano’s crew “tuning up” some pathetic vic with thirty-inch lengths of re-bar and a fungo bat? And, per corollary, who are the anonymous agents yanking the equity indexes such as we saw on Wednesday, December 18, when a holy host of stock shorts was magically deployed in anticipation of Ben Bernanke’s taper announcement so as to inspire a short-covering mega-rally when he opened the hole in his beard? What I wonder: if we have so much fabulous surveillance technology, why doesn’t some enterprising nerd team find out who’s behind all these pushing-pullings, yanking-and-crankings? Where is the Snowden of the financial markets who will unmask these actors?
Let’s cut to the chase. You heard it here: not only will the Fed eventually (i.e. soon) fail to taper in any meaningful sense; before this is over they will ramp up the purchases of worthless securities beyond $100 billion a month through every back door and trap door in the infamous Eccles Building, including perhaps Janet Yellen’s dainty fundament. The inflation — whatever that is — will sitting out there waiting behind the Hoover Dam of the Fed’s balance sheet. I wouldn’t want to be in Las Vegas when the first cracks appear on it. Merry Christmas everyone.
In4a$
27-12-2013, 09:07 AM
wow, winner, you really found some cr** there.
They guy who wrote it must have been dinking that Glenmorgan moosie was talking about, and lots of it.
winner69
28-12-2013, 04:48 PM
Moosie ...do you think what Kuntsler said is crap because it is counter to the mainstream view, the view you read in the main papers and hear on CNBC or whatever it is.
I don't always prescribe to those views but feel good practice to actually hear a contrary view. After all it has been those views over time that invariably have some truth in them.
You might even agree with me that central bank and government intervention in the money markets is what leads to the boom and bust cycles we have. We never seem to learn ....we will again go through a bust period. Maybe sooner than we think.
Many have a view that Ben (the Fed) is mostly rhetoric and keeps on saying just enough to keep the merry go round going.
Here's another view along the same lines. Better written but alas written by someone who you would dismiss as another radical. in that case dont bother read.
http://www.garynorth.com/public/11906.cfm
winner69
28-12-2013, 05:03 PM
Moosie - my deer friend. I can't resist recommending a book Deer Hunting with Jesus by Joe Bageant. A really readable book with a down to earth view of real American life. I've read quite often - good for passing the time on long flights. Might even pull it out ad read it again over the holidays seeing it is going to rain.
Man of Joe's essays are n his website. One of mt favourites is From Wall Street to Skank Street
found here http://www.joebageant.com/joe/2010/03/from-wall-street.html
An excerpt probably mirrors behaviour on Sharetrader -
"I'll tell ya what the stock market game is all about."
I didn't remember asking, but I knew I wouldn't get my turn signals fixed unless I listened.
"Used to be that a guy would pick a stock based on the facts. After a while, it got so that people looked around to see what other people's average opinion was, and they bet on that. Nowadays you look around and try to guess what the average opinion of the average opinion is. If you can guess enough other people's guesses about other people's guesses, then you bet on that and you make money. Don't ****ing matter if the stock is a dog. The stock market now runs the whole damned economy based on what fools believe other fools believe other fools believe. Run by a bunch of economists who figure that if they make enough fools believe the stock market is OK, then the economy will be OK. What if I ran my business that way? What if all I had to do was make people believe their cars was fixed? I'd go broke."
"You are broke, Gunther."
"That's beside the point."
winner69
28-12-2013, 05:27 PM
Unfortunately, while mainstream media should not be followed religiously, neither should this kind of "reporting". While you could call me sheeple and I could call you a conspiracy nutter all day long, I'd rather not and prefer to form my own ideas which, coincidentally, learn more to the mainstream side than the other.
Life is all about balance. Hope you find yours ;)
Agree moosie ....the truth is somewhere in between, hence one must continue to listen to all views and make ones own mind up eh
All I know is that my experiencing oil shocks and high inflation in the 70's, seen the markets crash in the 80's, the crash early this century and the lead up to the next crash sometime in the future has made me somewhat resilience ....and that the contrarian views have generally forewarned f such events better than mainstream views.
We just need to challenge what everybody says .....good that you do that
There's alot that could happen out there for such an overwhelming wave of optimism.
Lets not forget this is one large economic experiment and as the share market becomes more and more inflated(?) a few events happening at once could start the panic.
It will take a real magician to get into serious tapering AND keep interest rates down
We are not out of the woods yet IMHO
We may walk to green pastures or over the cliff on the other side
Did anything that Winner said in his posts sink in Moosie, In4a$ & Skid?
Just for the record... the great experiment (QE +) is a minor tangible variable within the stockmarket equation.
Actually the society's intangible belief of what this great experiment can do is the major variable player
Knowing the company financial/countries economic variables is only part of the sharemarket equation....yet we on ST get flooded with posts with many market variable factors ignored and the use of small sections but well published minor market variables..twisted everywhichway (except what way it is now) to present various logical future outcomes...I did this as an example on the DOW theory using lesser known media published market variables and got poopooed...which is "normal" as my scenario wasn't seen as the "Media normal" ...that's why I posted to see what reaction I'd get.
The major variable factors of the market equation are the beliefs/ traditions and the present attitudes of the participants within the market (mass investor behaviour)....Each society has it's own sense of "normal"...Wall St is a society....so is an asylum :)
E.g...speaking of asylums.....If there is mass investor belief that Rakon is a $10 stock, then it will be a $10 stock...Irrational??? no because it has sound logic..the major "behavioural" variables within the sharemarket equation are valid and working normally...if these behavioral variables remain near-constant for a number of years then the investors will assume logically that RAK is "normal" for it to trade well above its NTA...hence the perception that RAK naturally operates at an historically very high PE Ratio therefore that's it's "norm".,,and anyone thinking outside that societal norm and criticising RAK will be marked as a person not knowing the market and treated as a idiot.
So you can gather now from the above statement that..the PE Ratio is an indicator for market behaviour...The principal driver of the stock market over a length of time just happens to be the PE Ratio trend.
So you have to keep your mind open and flexible and don't get mentally constrained by reciting and applying all your faith in variables which aren't that influential on the market at the time and simarily mentioned in the traditional well respected media... Winner69 will correct me if I'm wrong but I think he is trying to educate us and open our minds with examples which aren't excepted as normal and perceived as rubbish under present day society rules....That societal behaviour is debated by those with flexible minds (Winner69)
.Is there right or wrong answers with many peoples opinions blogged on the internet?..maybe it comes down to what is accepted by the society at the time..Maybe this is the start to "normal" thinking behaviour in the near future...who knows?...eh?
Remember society is a variable too as its traditional values change over the years...
Using the Sharemarket and Stock Exchange indexes we can measure these societal variable changes over the years using e.g Annualised PE Ratios (Shiller) indicator...
............As we have noticed with annualised PE Ratio over the decades.......with hindsight the stock market society can look very insane at times.
So back to the thread...is this Bull market cycle over?...it depends on the principal driver..
Don't believe me that behaviour rules the marketplace??...then look here on trademe (http://www.trademe.co.nz/home-living/food-beverage/other/auction-678290667.htm) it's a classic example
I certainly did Hoop--that cliff i was referring to is the Hoover dam of the Feds balance sheet -with more and more cracks appearing..
Maybe they can patch up those cracks enough so that societies intangible belief allows for another cracker year on the share market ..
Or maybe the cracks are to big-the dam will give way-and societies tangible belief (in Las Vegas) will be very different
It will be interesting to see if this is another ''this sale was not completed '' feedback :)
It will be interesting to see if this is another ''this sale was not completed '' feedback :)
yeah..I'm becoming compelled to looking at this auction each time I log in....:)
winner69
29-12-2013, 08:40 PM
I certainly did Hoop--that cliff i was referring to is the Hoover dam of the Feds balance sheet -with more and more cracks appearing..
Maybe they can patch up those cracks enough so that societies intangible belief allows for another cracker year on the share market ..
Or maybe the cracks are to big-the dam will give way-and societies tangible belief (in Las Vegas) will be very different
It will keep going through 2014 ..... the rich club (billionaires that is) need to take control of the Congress before they decide who their man is to be the next President .... cant have a market collapse before then
Valuegrowth
29-12-2013, 10:38 PM
We may have correction in over valued markets in 2014. On the other hand undervalued markets, sectors, stocks, commodities and currencies may go up.If everything is goes well 2014 will be year of consolidation for the global economy. There may be some volatility in global stock and commodity markets in 2014. Still there may be bull markets, sectors, commodities and currencies in 2014. For example USD dollar will become bull currency in 2014 and 2015 and currencies such as NZD and AUD will become bear currencies. In the commodity market we may see bull market for meat, coco and out of favour hot beverage commodities. Gold, corn, soya bean prices will go down further in 2014. Dividend champions and value stocks will outperform others. Stock and commodity markets are not dead. They have cycles. Similarly different commodity, currency, stocks and markets have their own cycles as well. It is time to become bullish on next promising areas and become bearish on currently popular areas.
My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.
winner69
30-12-2013, 08:50 AM
Hoop said So you can gather now from the above statement that..the PE Ratio is an indicator for market behaviour...The principal driver of the stock market over a length of time just happens to be the PE Ratio trend.
Good point hoop
Currently NZX on a PE of about 19. Analysts are saying earnings should grow by 10% in 2014
So the NZX will go up by 10% next year if the PE stays the same
But if the PE drops to say 15 (a bit above the average over the years) the NZX will go down 13% ....even with those increasing profits, QE tapering and the US unemployment rate falling to 6%
Well if thats the case ,Ive got a bob each way--some gold(not as a trader but more just in case) and $US--the rest in cash $Kiwi and real estate (spent time cosmetically upgrading them along the way.)
So,except for the gold,Id be far better off if my take on things was wrong and things continue on their merry way.
In terms of those rich Billionaires,I agree they will keep getting richer-but the by product is often a polarization of wealth and a shrinking middle class.
At what point do they lose control of the game and fear takes over.
Most say a bit further down the line--some say never(they will always control the game)
But they had a bit of a close call some years back-.
I remember hearing on National radio the head economic honcho in England came right out and said they were 2-3 weeks away from a real meltdown. Not saying they are there now but it is not impossible.
No one really knows what will happen if the derivative market goes pear shaped.
Meanwhile I guess the best we can do Is just carry on but look for the signs of trouble before they happen. Or just stay conservative and keep the head down (That depends on what you have now,and your age)
Im getting a bit long in the tooth so have adopted a more conservative approach.
Id be interested to hear how you arrived at such specific conclusions MW
winner69
30-12-2013, 09:13 AM
Not being one to quibble, but do you have a source for the P/E= 19?
My Forsyth Barr document dated 27 December 2013 says the NZX50 Weighted P/E is 17.9.
18/19, whats a point between Sharetrader posters, but it would still be good to know where the 19 figure comes from.
read it in the paper
wouldn't have a clue whether that trailing earnings (with or without abnormals), whether losses are included or not (like is XRO earnings included or ignored).
A recent Macquaries report used 18.2 but I see Morningstar (on ASB site) say 15. So all over the place. Even where these things are measured everyday like the S&P500 there never is a consistent figure -- quick search this morning has figures from 17 to 21 on trailing earnings (operating earnings they say)
Was just trying to show what the impact of a change in market sentiment does even when earnings go up (and only read that earnings forecast in the paper as well)
winner69
05-01-2014, 11:36 AM
Apparently market confidence abounds. Last week, Investor’s Intelligence reported a surge in advisory sentiment to the highest bullish percentage since October 19, 2007.
Is this a good sign then?
winner69
11-01-2014, 08:57 AM
Merry Xmas to you all,
I thought I would update this chart heading into a new year and now that we have some clarity on a likely FED tapering schedule through to the 6.5% unemployment target.
The blue band on the chart between 3.3% and 5.75% represents the historical range of unemployment nadirs from 1968 through to the present day.
With the FED intending, at this time, to likely keep interest rates at zero through 2014 it does seem to provide an ongoing continuity to the accommodative floor under the equity market.
We should be watching for a switch to an inflation focus toward the end of 2014, and anything can happen including meteors, but at this time 2014 outlook is looking fine IMHO. Perhaps we will see a multiple expansion phase start to kick in over the next 12 and beyond.
5209
http://www.sharetrader.co.nz/showthread.php?9278-Is-This-Bull-Cycle-Over&p=421197#post421197
This post is not investment advice, DYOR.
So unemployment rate down to 6.7%
MAC - you should update that chart .....and tell us if your views / prognosis has changed
Santiago
11-01-2014, 10:07 AM
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11184443
Brian Gaynor's views on whether the market will stay up in 2014.
winner69
11-01-2014, 11:00 AM
isn't as pretty as it lookks, still a loooooong way to go ( but I have faith this a decade long battle all iphill that we will win) :)
http://www.ibtimes.com/us-jobs-report-december-2013-unemployment-rate-drops-67-nonfarm-payrolls-big-miss-wont-affect-fed
Some say that 6% to 6.5% unemployment rate represents full employment in the USA theses days
Makes that chart in that article you posted showing 8 million shortfall in jobs relative to pre-recession times real scary
It would be interesting to research the most successful companies out there and determine if they are outfits that actually create employment or ones that make life easier or more entertaining but reduce actual jobs.
Which brings up the question -is it better to have most of your population working but making less money(both for them and the country or business/corporation) or less people working but making more for themselves(maybe) and more for the corporation.
It can be a bit of a paradox that we can be investing in companies that are making big profits ,but as a whole more and more of our neighbors are not working--This is what I suspect is happening in the USA.
Can our economy progress as our standard of living for the majority goes down?
Ive read that as technology progresses,it eliminates jobs ,but creates others,--but we are entering a phase where we are eliminating far more than we are creating.
I wonder if years like 2013 for the share market were not just a smoke screen hiding a basic flaw in the need for all to make a decent living (there was certainly money made,but how many are better off?)
They are creating robots that can be programed to do basic tasks(a multitude of different ones) They can be incorporated in lots of different factories and over their 3 year lifespan it costs about $3hr to run them.
They are making gaint 3d printers that can make a house out of cement in 24hrs on site(probably the main structure)
We see similar things in agriculture.
So what will every one else do?(while all this $ is being made for some)
Is it possible to marry economics with sociology?
Does seem to be an outlier report Winner but the trend appears intact, if we were to see another big drop next month back to back it could be interesting, although I think it’s more likely we will see a reversal back to the mean.
Agree that unemployment could bottom out at the higher end of the nadir range (3.3 to 5.75%), the US has come off a very high base from 10% and the demographics are different from the brevious nadir in Q1 2007.
Seven years on we are now seeing by far the wealthiest generation in history retiring, baby boomers 54 to 69, and I wouldn’t be surprised if quite a few within the demographic just say 'well let’s just retire a few years early instead then, we can afford it and deserve it'.
Each time there is a correction the doomsayers come out. Many are technical analysts expressing uncertainty and caution because it is not often straight forward for them to predict graphical trends beyond a correction. Others are just frustrated bears who have suddenly got an audience, however, one day even they will be correct.
Employment has been the focus of US monetary and fiscal policy, and the resulting quantitative easing has boosting the economy and placed a floor under the sharemarket.
Now that the US economy is starting to pick up, unemployment is close to average levels and tapering is underway, the focus may well shift later this year to the control of inflation through interest rate adjustment.
It seems central banks will start raising interest rates in NZ this year and possibly in the US next year, so what does this mean for the bull cycle if our own share market is correlated very closely with that of the US ?
This article provides a nice explanation of the correlation between interest rates and share market growth for those whom may be interested in what may lie ahead.
http://disciplinedinvesting.blogspot.co.nz/2014/01/rising-interest-rates-can-be-good-for.html
The plot below indicates where interest rates presently are in the context of the cycle. There does seem to be a fair way to go before interest rates reach levels that traditionally inhibit the ability of companies to seek leverage and before they influence share market.
5486
Others may have and are entitled to contrary views, IMHO the fundamental indicators suggest that 2014 is looking fine for the bull cycle to continue. We may see some volatility but the underlying fundamentals remain intact.
regards, Mac
Each time there is a correction the doomsayers come out. Many are technical analysts expressing uncertainty and caution because it is not often straight forward for them to predict graphical trends beyond a correction. Others are just frustrated bears who have suddenly got an audience, however, one day even they will be correct.
Employment has been the focus of US monetary and fiscal policy, and the resulting quantitative easing has boosting the economy and placed a floor under the sharemarket.
Now that the US economy is starting to pick up, unemployment is close to average levels and tapering is underway, the focus may well shift later this year to the control of inflation through interest rate adjustment.
It seems central banks will start raising interest rates in NZ this year and possibly in the US next year, so what does this mean for the bull cycle if our own share market is correlated very closely with that of the US ?
This article provides a nice explanation of the correlation between interest rates and share market growth for those whom may be interested in what may lie ahead.
http://disciplinedinvesting.blogspot.co.nz/2014/01/rising-interest-rates-can-be-good-for.html
The plot below indicates where interest rates presently are in the context of the cycle. There does seem to be a fair way to go before interest rates reach levels that traditionally inhibit the ability of companies to seek leverage and before they influence share market.
5486
Others may have and are entitled to contrary views, IMHO the fundamental indicators suggest that 2014 is looking fine for the bull cycle to continue. We may see some volatility but the underlying fundamentals remain intact.
regards, Mac
Apparently, Interest rates correlation with the sharemarket is a "new" thing.. It sort of happened overnight back in the 1960's /1970's in countries which started using IR as a tool to control inflation...
Will interest rates continue to correlate forever (as primary drivers are meant to do)?....If you think deeply and apply reasoning the answer should be No...
Where interest rates probably won't correlate with the sharemarket under monetary policy will be in periods of deflation ..... deflation happens often in history it just we haven't seen much of it these last few decades (Japan excepted)...but it will happen again. Actually the USA has been freting about deflationary pressures for the last few years and the seemingly forever time lengths of its QE's in combating it.
Large periods of deflation did coincide with past Industrial Revolutions .... which there has been two (Late 18th century Late 19th century)....There is growing belief that we are now in the third Industrial Revolution and its quickly gaining pace...so it not inconceivable that deflationary pressures rather than inflationary pressures may dominate the "First World's" economic landscape for the next few decades...Now..that will stuff up Interest rate /Equity market correlations...eh?
Deflation, crumbs Hoop, that’s a rather a gloomy outlier prediction for 2014, but noted.
The last significant deflationary period in the US was in the 1930’s.
But yes, there are monetary policies that come into play within a deflationary risk environment, most notably one called quantitative easing.
One of Bernanke’s early goals in adopting quantitative easing was specifically to mitigate deflationary risk by raising inflation within band to thus lower interest rates and boost the economy.
Here’s what he had to say on the matter.
http://video.cnbc.com/gallery/?video=3000233059
....definitely not gloomy Mac I'm accually quiet excited...and 2014 is not a sudden jump start to deflation... I think the deflation thing will spread out sector by sector from electronic and communication industry sectors at present into other sectors ..I'm excited of the fact that areas where deflation is occurring it is producing innovative products they are a higher quality and cheap to produce cheap to buy, so available to most of the population which in turn raises the standard of living.
I do realise the problem with overall deflation ... it is as disruptive as high inflation and tends to be economically destructive as systems and people are slow to adapt..
So as an investor and a revolution is progress a buy and hold strategy in an traditional blue chip company viewed as a long term investment may be a dangerous thing to do...that 1890 -1910 Wall St was very volatile era during the last Technical Revolution
Mac I couldn't get the link to go past the advert...just me is it???
biker
16-02-2014, 02:21 AM
....
Mac I couldn't get the link to go past the advert...just me is it???
Played normally for me
kiora
16-02-2014, 08:39 AM
Played normally for me
Commentary on right of video
My take is the reducing asset values reduces wealth & money in circulation so QE 2 created to keep money supply more constant ??? Just my opinion
Bernanke commentary
this issue of one of the key ideas in a financial crisis is what's called a fire sale. the idea when large numbers of people are forced to sell assets at a given moment, it will drive down prices well below the sustainable price level because not enough liquidity, not enough buyers in the very short run. that will feedback -- reduce the net wealth of other a holders who in turn will be forced to sell and you get into a vicious cycle. the money market funds that were in a run were pulling cash out of, first, repo market, which finances a lot of assets held by broker/dealers and others, and the commercial pay for market which funds both financial and nonfinancial in the short term. it wasn't an issue at all of protecting the wealth of any given group in the same sense that intervening with various companies was not an attempt to protect the wealth at any given group. it was, rather, an attempt to try to avoid a cascade of falling asset values and fire sales, which the run on the money market funds was already creating. but the equity funds had to sell assets, too. in fact, indeed it cascaded 50%. but they weren't runable. that's the point. -- neither are money market mutual funds as long as they act like mutual funds. the -- if you get 2% more if you put your money in. next question. my question is on mechanism. do you think -- can't hear you. is that on? try anyway. my question is the mechanism by which quantitative easing is set to work. your original statements back in what is called qe1, suggested that what you were doing was targeting higher inflation and that -- or avoiding deflation. and the impression that that generated is that higher inflation would generate a real fed fund rate and generate more stimulus. but your more recent statements suggest quantitative easing works through reducing interest rates, buying securities which reduce interest rates. which is the more important mechanism that you're attempting to use here, rising inflation or lowering interest rates? no. i think you're mentioning together goals and mechanism. the goal was to avoid deflation. so, one of our concerns, besides the weak recovery, at the time of qe2, was that inflation, as today, but even more so, was very soft and moving down. we were concerned about deflation risks. of course, deflation is not a zero one thing. even low inflation can create problems. so, we adopted the quantitative easing policy with the objective of raising the inflation rate to meet our target. and at the same time, by doing so, of course, we would lower real interest rates and help the real economy. so, that was the objective. the mechanism, and of course there's a lot of debate about how exactly this works and so on, but the mechanism we have focused on is based on sort of a tobin -- friedman kind of world in which there are perfect world so buying up assets has an effect on the assets. that's the mechanism i discussed today, which i talked about in jackson hole right before qe2 as well. that's the basic mechanism that we have argued.
Bernanke: Deflation a concern before QE
Fri 03 Jan 14 | 03:48 PM ET
At the American Economic Association in Philadelphia, outgoing Federal Reserve Chairman Ben Bernanke answers various questions including the run on the money market funds.
Topics:
Ben Bernanke | Deflation | Federal Reserve | Economy (U.S.)
wealth of any given oup in the same sense that intervening with various companies was not an attempt to protect the wealth at any given group. it was, rather, an attempt to try to avoid a cascade of falling asset values and fire sales, which the run on the money market funds was already creating. but the equity funds had to sell assets, too. in fact, indeed it cascaded 50%. but they weren't runable. that's the point. -- neither are money market mutual funds as long as they act like mutual funds. the -- if you get 2% more if you put your money in. next question. my question is on mechanism. do you think -- can't hear you. is that on? try anyway. my question is the mechanism by which quantitative easing is set to work. your original statements back in what is called qe1, suggested that what you were doing was targeting higher inflation and that -- or avoiding deflation. and the impression that that generated is that higher inflation would generate a real fed fund rate and generate more stimulus. but your more recent statements suggest quantitative easing works through reducing interest rates, buying securities which reduce interest rates. which is the more important mechanism that you're attempting to use here, rising inflation or lowering interest rates? no. i think you're mentioning together goals and mechanism. the goal was to avoid deflation. so, one of our concerns, besides the weak recovery, at the time of qe2, was that inflation, as today, but even more so, was very soft and moving down. we were about deflation risks. of course, deflation is not a zero one thing. even low inflation can create problems. so, we adopted the quantitative easing policy with the objective of raising the inflation rate to meet our target. and at the same time, by doing so, of course, we would lower real interest rates and help the real economy. so, that was the objective. the mechanism, and of course there's a lot of debate about how exactly this works and so on, but the mechanism we have focused on is based on sort of a tobin -- friedman kind of world in which there are perfect world so buying up assets has an effe on the assets. that's the mechanism i discussed today, which i talked about in jackson hole right before qe2 as well. that's the basic mechanism that we have argued.
this issue of one of the key ideas in a financial crisis is what's called a fire sale. the idea when large numbers of people are forced to sell assets at a given moment, it will drive down prices well below the sustainable price level because not enough liquidity, not enough buyers in the very short run. that will feedback -- reduce the net wealth of other a holders who in turn will be forced to sell and you get into a vicious cycle. the money markt funds that were in a run were pulling cash out of, first, repo market, which finances a lot of assets held by broker/dealers and others, and the commercial pay for market which funds both financial and nonfinancial in the short ternl. it wasn't an issue at all of protecting the wealth of any given oup in the same sense that intervening with various companies was not an attempt to protect the wealth at any given group. it was, rather, an attempt to try to avoid a cascade of falling asset values and fire sales, which the run on the money market funds was already creating. but the equity funds had to sell assets, too. in fact, indeed it cascaded 50%. but they weren't runable. that's the point. -- neither are money market mutual funds as long as they act like mutual funds. the -- if you get 2% more if you put your money in. next question. my question is on mechanism. do you think -- can't hear you. is that on? try anyway. my question is the mechanism by which quantitative easing is set to work. your original statements back in what is called qe1, suggested that what you were doing was targeting higher inflation and that -- or avoiding deflation. and the impression that that generated is that higher inflation would generate a real fed fund rate and generate more stimulus. but your more recent statements suggest quantitative easing works through reducing interest rates, buying securities which reduce interest rates. which is the more important mechanism that you're attempting to use here, rising inflation or lowering interest rates? no. i think you're mentioning together goals and mechanism. the goal was to avoid deflation. so, one of our concerns, besides the weak recovery, at the time of qe2, was that inflation, as today, but even more so, was very soft and moving down. we were concerned about deflation risks. of course, deflation is not a zero one thing. even low inflation can create problems. so, we adopted the quantitative easing policy with the objective of raising the inflation rate to meet our target. and at the same time, by doing so, of course, we would lower real interest rates and help the real economy. so, that was the objective. the mechanism, and of course there's a lot of debate about how exactly this works and so on, but the mechanism we have focused on is based on sort of a tobin -- friedman kind of world in which there are perfect world so buying up assets has an effe on the assets. that's the mechanism i discussed today, which i talked about in jackson hole right before qe2 as well. that's the basic mechanism that we have argued.
Bernanke: Deflation a concern before QE
I’m positive too Hoop, watching cautiously as always.
It will be interesting to see how historians portray Bernanke, whether he will be the man who saved the US from that great deflationary recession/depression or whether they will stone him for adding to inter-generational debt, time will tell I guess. It may well come down to the longevity of economic growth over the next year or two.
As a long term investor I do remind myself of the risk especially given the unique NZ circumstance that we have for incentives in long term investment through tax leniency. It tends to keep’s investors in the market, good for some, but it’s the retail investors that get burned at the end.
All the more reason for fundamental analysis and for consciously planning an exit plan based on research and one’s risk tolerance for when the time is neigh.
winner69
16-02-2014, 01:31 PM
Hoop - ever heard of a domed house pattern? Not doomed!
Apparently one forming on the S&P500 at the moment
winner69
16-02-2014, 03:45 PM
This guy reckons US economy a bit broken still and the moneymen making sure they not going to be caught short
Won't hear this sort of stuff on CNBC or the NY Times ...but moosie a lot of numbers quoted so be have basis of a decent argument
.Foreclosure Filings Jump as Investors Eye Exits
http://www.informationclearinghouse.info/article37651.htm
Bjauck
16-02-2014, 07:46 PM
A bit of a retort to that:
http://economix.blogs.nytimes.com/2014/01/30/why-the-homeownership-rate-is-misleading/?_php=true&_type=blogs&_r=0
I really hope that NZ does not suffer too much when "OCR-Shock" starts to hit home, but the things I see in my age-bracket (25-30) re homes and loans suggests there is going to be a bit of suffering, starting in March...
Let's hope for a soft landing. For many in your age bracket, in order to leverage themselves into housing (esp. in Auckland), either have to take on a shed-load of debt, or rely on parents, many of whom have become rich through investing in properties thereby making them so expensive relative to household incomes. If these "youngsters" wait for long enough (ten plus years?) for the time when their boomer parents move into retirement accommodation and/or divest themselves of the hassle of investment housing, there may well develop a buyers market and a drop in house prices.
The corollary to this may be a surge in investing on the capital markets as boomers look for other places to park their assets as they move out of investments in housing, both rental and big primary residences.
winner69
16-02-2014, 08:59 PM
Hoop (and others) - you will love this chart
Came from here
http://www.businessinsider.com.au/gmo-james-montier-annotated-cape-chart-2014-2
Article contains a bit of wisdom from Ben Graham so it must be a pretty good story
It is also worth noting that in order for mean-reversion-based strategies to work, it is not required that the mean be realised for long periods of time, but that markets continue to behave as they always have, swinging pendulum like between the depths of despair and irrational exuberance, or, from risk-on to risk-off. As long as markets display such bipolar disorder and switch from periods of mania to periods of depression, then mean reversion should continue to merit worth as an investment strategy.
History is littered with the remains of proclaimed, but unfulfilled, new eras. Exhibit 6 shows the long-run history for the Graham and Dodd P/E for the U.S. market. Over this time, we have witnessed some quite remarkable, and quite appalling, things — the deaths of empires, the births of nations, waves of globalization, periods of deregulation, periods of re-regulation, World Wars, revolutions, plagues, and huge technological and medical advances — and yet one thing has remained true throughout history: none of these events mattered from the perspective of value!
As Ben Graham wrote, “Let me conclude with one of my favourite clichés — the French saying: ‘The more it changes the more it’s the same thing.’ I have always thought this motto applied to the stock market better than anywhere else. Now the really important part of this proverb is the phrase ‘the more it changes.’ The economic world has changed radically and it will change even more. Most people think now that the essential nature of the stock market has been undergoing a corresponding change. But if my cliché is sound — and a cliché’s only excuse, I suppose, is that it is sound — then the stock market will continue to be essentially what it always was in the past — a place where a big bull market is inevitably followed by a big bear market. In other words, a place where today’s free lunches are paid for doubly tomorrow. In the light of experience, I think the present level of the stock market is an extremely dangerous one.”
Hadn’t updated the big picture plots for six months so here they are.
None of my top ten fundamental ‘get out’ indicators are yet firing, but that’s not to say a black swan couldn’t make them do so.
kind regards, Mac
6649
6650
Thanks Christian for a well-structured article and viewpoint, agree with all that;
http://www.harbourasset.co.nz/wp-content/uploads/2015/05/Harbour-Investment-Horizons-Navigating-the-removal-of-US-Fed-stimulus-Final.pdf
Leftfield
09-05-2015, 07:48 AM
Thanks Christian for a well-structured article and viewpoint, agree with all that;
http://www.harbourasset.co.nz/wp-content/uploads/2015/05/Harbour-Investment-Horizons-Navigating-the-removal-of-US-Fed-stimulus-Final.pdf
Thanks Mac for posting that. UK election results and Wall St on Friday look encouraging for the week ahead at least! Just got to keep an eye on Greece.
Bjauck
09-05-2015, 08:30 AM
Thanks Mac for posting that. UK election results and Wall St on Friday look encouraging for the week ahead at least! Just got to keep an eye on Greece.
UK election results may provide a "relief" rally to an extent for a week or so. A majority Conservative government looks good on paper (from the perspective of the city people.) However you have a potential UK "Jockalypse" (potential future PM BoJo's phrase!) with the Scottish Nationalists' almost clean sweep of Scottish seats. In addition the Conservatives have promised a referendum on leaving the Europe Union, which the City of London does not like. So a week's honeymoon after the uk election followed by years of bickering!
Also Europe has to contend with potential disintegration of the UK (and Spain - as Catalonia may be emboldened by an independent Scotland), a possible Euro Grexit, and a resurgent Russia (further emboldened by the possibility that the key UK nuclear defence power may be threatened by the Scottish Nationalists).
Also the financial tax introduced by Cameron may well see banks relocate out of the City of London. HSBC, the biggest bank, is apparently already seriously considering returning its HQ to Hong Kong/China.
When they start using a country the size of NZ as a model for successfully increasing interest rates (to maybe use in an economy the size of USA) I get concerned.
We are in the 4th longest Bull market in history(mainly because there are not many other choices to invest for most countries)
Naturally stocks are overvalued but as time goes on we get used to it and come to think of it as fair value.(we get lulled into the reality that has been created)
This scenario can continue on for who knows how long but the wave that will surly crash (or correct)just gets bigger--there are just to many things that can go wrong and sooner or later one of them will in this era of postponing problems,rather than solving them.
I feel sorry for the grandma and grandpa in the USA who are getting nothing for there retirement savings except the prospect of a big gamble.
Cricketfan
09-05-2015, 05:09 PM
With all this talk of a crash/correction coming soon, are you guys cashing out or taking the risk and holding? What would be the advice for a relative newcomer like me (I started investing about 1-2 years ago) - am I in danger of having bought near the peak of the bull cycle and risk losing capital in the near future?
With all this talk of a crash/correction coming soon, are you guys cashing out or taking the risk and holding? What would be the advice for a relative newcomer like me (I started investing about 1-2 years ago) - am I in danger of having bought near the peak of the bull cycle and risk losing capital in the near future?
It's true what they say Cricketfan, there's no reward without risk, and absolutely you should make your own decisions based upon your own financial position and stage in life.
It sounds like you feel a need to better understand the risk in that equation.
Wouldn't recommend taking on board any opinions you may read on the internet including this forum, but there is some information and analysis here that can be useful if it’s referenced.
There are also a minority of folk on this forum who like scare monger newies into selling anything and everything in an attempt to make a cynical quick buck, watch out for them, some are more subtle than others, and they especially come out to dance about during corrections.
The best advice is to DYOR, it’s a big cliché on this forum, but it’s the best one can do.
My advice is to start with the economic fundamentals that drive economies through cycles, that at least provides an understanding of why things happen, and to some extent the timing also, although a black swan even can happen at any time.
Global markets tend to be synchronised, led by the larger markets, the NZ market can falter independently but generally it follows the US, and most FA’s tend to research the US economy when it comes to assesing the cyclical timing here.
There are some visual correlations like unemployment rates and interest rates that can be plotted, have a look earlier on the thread, but most fundamental indicators are less tangible when it comes to seeing where the cycle is at a glance and there are economists that make a living at it. Not that they always agree either.
Read also the Harbour Asset Management post, which provides a well wordsmithed and fair summary also.
Another consideration that FA's are divided over at present is whether this cyclical bull market has become a secular bull market, some of us research that matter quite a lot, and it is an interesting study if you have the time.
My view is that there is still insufficient reasoning to yet allow a formative decision, and that we will get a better feel once the trajectory of the US federal funds rate is determined over the next six to twelve months or so.
couta1
09-05-2015, 05:49 PM
With all this talk of a crash/correction coming soon, are you guys cashing out or taking the risk and holding? What would be the advice for a relative newcomer like me (I started investing about 1-2 years ago) - am I in danger of having bought near the peak of the bull cycle and risk losing capital in the near future?
Most long term investors the majority of which probably don't even know this forum exists or don't read it would be happy to ride the ups,downs and sideways movements out over a ten year timeframe and still double their money and collect dividends along the way, in fact there are many testimonies to that in the investing world.
A very high level two pager for those with lives other than economic fundamentals;
http://funds.rbcgam.com/pdf/Understanding_Economic.pdf
Understanding the position within the cycle at any time can allow for an assessment of present day risk.
Cricketfan
09-05-2015, 10:36 PM
Thanks for the info guys. Very helpful.
jetski1999
10-05-2015, 10:50 AM
Totally agree Number one rule DYOR
number two set your own parameters, i.e ten year time frame, invest X dollars,
number three don't panic if you have DYOR over the long term you will be fine
and last trust your instincts if your not happy with a new management or direction of a company sell out and move on don't hang in there in the hope it will get better
It's a good time to remember one of Warren Buffett's classic rules (http://www.cnbc.com/id/27230391): "Be fearful when others are greedy, and be greedy when others are fearful."
I watch CNBC it gives me some idea as to where we are heading,
share trading is a global thing so outside influences affect us
if you are looking to buy on down dips you can normally pick a good time as the NZ50 and ASX200 generally follow the nasdaq and S&P 500. I,e if they have a big drop overnight ours and aussie will start down for the day so may fall to your buy in price point
Joshuatree
10-05-2015, 11:28 AM
Good time to do some housework. Review all your stocks and charts.Cull out your weaker stocks that haven't measured up; whether regulatory change;sector weakness e.g. M/S; poor management; have dropped below M/A e.g. 60/180/200. Look hard at the stocks left reweight, take some profits maybe depending on PE etc. Check Dividend yield history. Read lots but be very aware of all the agendas, noise , talking BIG heads out there. Have some early indicator stocks on your watch list that can warn you before the whole mkt drops. Smaller cap and riskier stocks drop first. Have the cash you're comfortable with if a black swan event happens happens. I always have more cash then i think i will need;(over 30% atm). Some remain fully invested in the stocks they have done due diligence in knowing/ believing they will rebound ..
jetski1999
10-05-2015, 11:53 AM
Read lots but be very aware of all the agendas, noise , talking BIG heads out there
case and point make up your own mind on your own research
http://www.cnbc.com/id/102660294
robbo24
10-05-2015, 12:16 PM
A very high level two pager for those with lives other than economic fundamentals;
http://funds.rbcgam.com/pdf/Understanding_Economic.pdf
Understanding the position within the cycle at any time can allow for an assessment of present day risk.
This is from 2009... I wonder what the updated version says after round after round after round of QE :D
Ha, yeah, it is an economic cycle so it is timeless literature Robbo, although the level of QE is interesting as you say, but for secular reasons as much as cyclical,
FA's who say we are not in a secular bull cycle do so because historically PE ratios typically must have gone down to around 12 before a secular bull cycle is typically initiated.
FA's who say that we are already in a secular bull cycle do so because they say that without the unprecedented level of QE applied, PE ratios would probably have gone down to 12.
Warren Buffet just last week offered a view which I tempted to consider at this point, in that the share market at present may seem cheap looking back in a few years if interest rates stay low for a long period.
We are seeing levels of low inflation and deflationary forces not seen in the Western world since the 1930's depression, and although the US, well and perhaps NZ, are the first out the gate with a cyclical recovery, global inflation is very low and may be for some time yet.
It is the trajectory of US federal funds rate over the next 6 to 12 months that will determine an outcome to the secular bull debate. Both US and global inflationary pressures will have a great bearing on what the FED ultimately do.
Mista_Trix
10-05-2015, 02:09 PM
My biggest piece of advice to you Cricketfan, and I hope you take it onboard, is to never ever buy or sell based on 'advice' or posts you have seen on here. Some of these people sound may sound intelligent and knowledgable, but some of the stuff is utter rubbish. It's useful for leads you may have otherwise missed, pointing your nose in the right direction, testing your theories and trying to help others. But you must then go and research for yourself prior to making any decisions. Never act solely on here...
I don't know if I straight out agree with that. I got saved a lot of heartache by some people on here who were speaking out against the trend when both DIL and PEB were correcting into a downturn - it went on to save me a lot of heartache and money!! There are some people on here with an agenda, but I think there's a lot of well meaning as well. The DYOR includes identifying who is doing what why.
Sometimes the seniors do know what they are talking about, and if you can find the ones who are well intentioned you'll learn a lot.
jetski1999
10-05-2015, 02:30 PM
I got saved a lot of heartache by some people on here who were speaking out
agree to a point, it has pointed out shares I had never heard of and on the same token some not so good directors and CEO.s. being appointed.
but I have then just researched more and made sure when I make a decision its all mine so the blame lies with me if I get it wrong.
one of my many rules is if l invest in a company I like to use my eyes and ears and experiences to get a feel, figures only tell what has happened not what may happen going forward.
i.e holder of briscoes, so when I shop in there or rebels take note of how busy, how empty are the selves after a big sale, the service I get.
macduffy
10-05-2015, 02:37 PM
Who was it who first said " A bull market climbs a wall of worry"?
But then, maybe that's just another old market saying - true some of the time!
;)
Oh yeah, found the link again, Warren from last Monday;
http://www.cnbc.com/id/102644439
jetski1999
10-05-2015, 03:19 PM
I watched it live when he was on, what was interesting was he said he was wrong re interest rates inflation and QE, but he also said we having never been through this before and we wont know until we are able to look back and say yep that worked or this is what happened because of it.
macduffy
10-05-2015, 03:21 PM
Oh yeah, found the link again, Warren from last Monday;
http://www.cnbc.com/id/102644439
Thanks, MAC. He's always worth listening to!
Joshuatree
10-05-2015, 05:27 PM
BTW redbacka on another hot forum does a sunday roundup of the mkts each week; well worth a look; pretty bearish conclusion.
I think so too, not just because he is arguably the world’s top investor, but simply because he has a down to earth way of summarising quite aptly.
Agree too Jetski, we may not know for sure until we look back, like anything and everything in life I guess, although there are fundamental trends and indicators which assist in assessing probabilistic outcomes, and one must try to be a sophisticated investor.
Interest rates are all important over the next couple of years, and over the last 15 years the FED has tried to provide a consistent direction, an incline or trajectory if you like for the federal funds rate for a few years at a time.
Looking forward;
It may well be that a steep incline, when rates do start to rise, may err many toward a view that a cyclical share market bull cycle top is likely within the next couple of years.
A gentle incline, when rates start to rise, or a significant delay in rates rising, may err many to a view that as a secular bull cycle has been confirmed.
I’m content to sit on the fence for now, to wait and watch, but acknowledge that very global low inflation, even deflation in some parts, is suggestive at this time anyway toward the latter being a at least a plausible outcome.
Ha, yeah, it is an economic cycle so it is timeless literature Robbo, although the level of QE is interesting as you say, but for secular reasons as much as cyclical,
FA's who say we are not in a secular bull cycle do so because historically PE ratios typically must have gone down to around 12 before a secular bull cycle is typically initiated.
FA's who say that we are already in a secular bull cycle do so because they say that without the unprecedented level of QE applied, PE ratios would probably have gone down to 12.
Warren Buffet just last week offered a view which I tempted to consider at this point, in that the share market at present may seem cheap looking back in a few years if interest rates stay low for a long period.
We are seeing levels of low inflation and deflationary forces not seen in the Western world since the 1930's depression, and although the US, well and perhaps NZ, are the first out the gate with a cyclical recovery, global inflation is very low and may be for some time yet.
It is the trajectory of US federal funds rate over the next 6 to 12 months that will determine an outcome to the secular bull debate. Both US and global inflationary pressures will have a great bearing on what the FED ultimately do.
Warren may well be right about that if there is nowhere else to get any sort of return on investments--but when we observe that line on the chart (Sharmarket)constantly going up into uncharted territory -It would be prudent to remember what the props are that are holding it up--Sooner or later they will weaken--Interest rates cant stay at pretty much zero forever--This is an experiment that hasnt had a conclusion yet,but my feeling is that investors are getting increasingly worried out there and as time goes on it will take lass and less to cause the slide. If we are lucky it will be a correction,if not then blood will flow.(or in hindsite the bubble bursts)
I thinks its a time when investors have to keep a close eye on their shares ,which basically means ''botton drawer'' shares we forget about are down rite dangerous.
Those who are not worried because the shares they own (and love) have what they consider good fundamentals should IMO still keep a close eye on outside factors that could drag them down in the avalanche if it occurs.
Thats why this thread is very relevant--No matter what one believes,-it at least keeps them in touch with at least thinking about it.
I would be much more concerned with deflation rather in inflation---Its a black hole that can suck the life out of all assets except cash in the hand (not digets in the bank)
PS agree with mister trix about the value of some seasoned investors who alert to warning signs when some shares are getting dangerous--Doesnt take long to see who is worth their salt,especially going back and reading about past events---DIL was a real eye opener to me--what I learned helped with other shares after.
Saw this on the Chris Lee website last week. Food for thought as well.
"Market News 4 May 2015
I think there is a message for investors in the progressive sale of assets by very successful businessman Graeme Hart."
macduffy
11-05-2015, 02:25 PM
Saw this on the Chris Lee website last week. Food for thought as well.
"Market News 4 May 2015
I think there is a message for investors in the progressive sale of assets by very successful businessman Graeme Hart."
Maybe - except that Graeme Hart has been selling assets for years. That's how he operates.
You gotta wonder just how long this can go on
http://www.aljazeera.com/news/2015/05/150511192445041.html
winner69
15-05-2015, 03:18 AM
I think so too, not just because he is arguably the world’s top investor, but simply because he has a down to earth way of summarising quite aptly.
Agree too Jetski, we may not know for sure until we look back, like anything and everything in life I guess, although there are fundamental trends and indicators which assist in assessing probabilistic outcomes, and one must try to be a sophisticated investor.
Interest rates are all important over the next couple of years, and over the last 15 years the FED has tried to provide a consistent direction, an incline or trajectory if you like for the federal funds rate for a few years at a time.
Looking forward;
It may well be that a steep incline, when rates do start to rise, may err many toward a view that a cyclical share market bull cycle top is likely within the next couple of years.
A gentle incline, when rates start to rise, or a significant delay in rates rising, may err many to a view that as a secular bull cycle has been confirmed.
I’m content to sit on the fence for now, to wait and watch, but acknowledge that very global low inflation, even deflation in some parts, is suggestive at this time anyway toward the latter being a at least a plausible outcome.
QE has done little to drive economic growth in the US, or made the average worker better off. Trickle down has not worked, never does. QE has inflated asset values to (extremes) high levels and allowed the money men to hock off more of their toxic debt.
Yellen doing a great job in keeping this rort going. Her brief is no market turmoil until after the Presidential election, that's what a powerful few demand.
So no rate rises, despite the word games being played, until well into 2016
For now this bull cycle (or whatever you want to call it) isn't over ....but heck there could be interesting times come late next year and into 2017
elZorro
15-05-2015, 07:38 AM
QE has done little to drive economic growth in the US, or made the average worker better off. Trickle down has not worked, never does. QE has inflated asset values to (extremes) high levels and allowed the money men to hock off more of their toxic debt.
Yellen doing a great job in keeping this rort going. Her brief is no market turmoil until after the Presidential election, that's what a powerful few demand.
So no rate rises, despite the word games being played, until well into 2016
For now this bull cycle (or whatever you want to call it) isn't over ....but heck there could be interesting times come late next year and into 2017
Which would be interesting timing for our elections, W69. Three terms in, three terms out.
QE has done little to drive economic growth in the US, or made the average worker better off. Trickle down has not worked, never does. QE has inflated asset values to (extremes) high levels and allowed the money men to hock off more of their toxic debt.
Yellen doing a great job in keeping this rort going. Her brief is no market turmoil until after the Presidential election, that's what a powerful few demand.
So no rate rises, despite the word games being played, until well into 2016
For now this bull cycle (or whatever you want to call it) isn't over ....but heck there could be interesting times come late next year and into 2017
That certainly swings the odds in the bulls favor--but outside forces can have a way of upsetting the apple cart--I dont think Im the only one who is wondering how long this charade can last--there are alot of other players besides wall street and its corporate gov.,but they seem to be providing the momentum atm with the obsession with interest rates.
couta1
15-05-2015, 12:23 PM
That certainly swings the odds in the bulls favor--but outside forces can have a way of upsetting the apple cart--I dont think Im the only one who is wondering how long this charade can last--there are alot of other players besides wall street and its corporate gov.,but they seem to be providing the momentum atm with the obsession with interest rates.
The current NZX looks anything but bullish at the moment perhaps its suffering from SAD but if you do a bit of study your find that many stocks are 15-20% off their recent highs so correction mode activated.
We are in the red, for the first time (that I have noticed at least) this year:
All stocks -0.09%
Contestants 2.14%
Brokers 4.33%
https://www.stocktastic.co.nz/stocks
This includes dividends!
The current NZX looks anything but bullish at the moment perhaps its suffering from SAD but if you do a bit of study your find that many stocks are 15-20% off their recent highs so correction mode activated.
I think it seems that way because the most popular to post about are growth stocks and most have not done so well this year.
couta1
15-05-2015, 03:05 PM
I think it seems that way because the most popular to post about are growth stocks and most have not done so well this year.
No actually Skid I'm talking about blue chip stocks like SPK,GNE,MRP to name a few.
noodles
15-05-2015, 03:34 PM
No actually Skid I'm talking about blue chip stocks like SPK,GNE,MRP to name a few.
SPK,GNE,MRP were (and still are) all priced like growth stocks.
couta1
15-05-2015, 03:45 PM
SPK,GNE,MRP were (and still are) all priced like growth stocks.
Tui anyone? But we digress from my main point in that a 15-20% correction is not bullish but rather bearish(Not the Tui kind)
Beagle
15-05-2015, 04:11 PM
I went to the boat show yesterday and came very close to buying a flash boat...I was thinking I might as well have some fun while I lose my money.
The pending major CHH IPO will suck a LOT of whatever wind, if any, is left out of the market soon. A decent sized portfolio allocation to cash looks like a prudent move right at the minute.
NZ Inc isn't in good shape, certainly not anywhere near as good as the pollies would have us believe. $7b hole from dairy is not good. Chch rebuild is temporary boost to GDP, what if dairy doesn't recover ?
I struggle too see how the NZX50 will get above 6,000 this year, what catalyst would there be for that with most stocks already very fully priced.
Translation...if you're not in good dividend paying stocks on a sensible PE it'll be easy to get caught in a sideways market with minimal, if any, returns this year.
Expensive PE30+ stocks and no PE stocks because there's no earnings look vulnerable to any pullback to me.
PE expansion has been massive in the last 3 years, can't go on, real NZX50 EPS growth or the market goes nowhere as a whole or possibly downwards.
I recently trimmed my portfolio positions to the point where for risk mitigation purposes I won't have more than 10% of my portfolio value in any particular stock in any circumstances no matter what my level of conviction with the company. Happy to sit on the cash and in no hurry to reinvest at present. Gotta stay away from boat and car dealers this winter :)
Sell in May and go away appears to have some merit this year.
winner69
19-05-2015, 08:34 AM
S&P pushed toa new high overnight.
Everybody says Fed won't have rate hikes fr a while, US economy still in a sad way
Even over here bank commentators and their myopic view of things (and hidden agendas) are calling for rate cuts.
Meanwhile markets keep going up, bull cycle not over yet
Makes for some difficult decisions on where to park investments--We had the advantage of having a bit more of a return on savings but if rates are cut then..--The bull cycle train could carry on for a while,or come to an abrupt derailment--its hard to predict short term in times like these (everythings great over there in the US---except the economy:)--The stakes just seem alot higher in this phase of whats happening--Is the US stock market overvalued, or still room to carry on since there is not much alternative places to invest?
(there are alot of big retail reports coming up this week)-we will see if the concern about Americans not going out and spending is justified.
Ive become the smart cautious investor (out of alot of my shares) or the stupid coward--time will tell--Theres always risk--Ive chosen the risk of lost opportunity over the risk of loosing what profits I had (for the time being)
Over here--OZ is not doing so well,...and here those falling dairy prices are a bit of a worry--if it stalls the NZ economy we may see that cut,but then there is that big bad Auckland housing market which is starting to resemble a runaway train)--interest rate cuts certainly wouldnt help that.
It only takes 1 point on the S&P to reach and all time high
I look on the news and it says ''US stock market at all time high''
under that it says --''which stock market is scarier, US or China''
Billy Boy
19-05-2015, 10:26 AM
Rodger & W69
Interesting to hear you's talk like this. I generally agree as most of my indicators have developed the droops
or are running very flat. The bull market is'int over yet, but I think the pot is coming to the boil.
Watch Gold !!
BB
couta1
19-05-2015, 11:04 AM
When the Ryman share price doesn't rally coming into its results announcement that's a good indicator to me that our market is very much off the boil. ( I'm talking about its normal 50 cent kinda rally)
Billy Boy
19-05-2015, 12:18 PM
Is Greece dead in the water ?? far from it.
http://rt.com/business/257701-greece-russia-brics-invitation/
This could have very serious results for the "Bull Market"
BB
posts per day on sharetrader slowing .... bull cycle definately coming to close
Baa_Baa
19-05-2015, 09:51 PM
Is Greece dead in the water ?? far from it.
http://rt.com/business/257701-greece-russia-brics-invitation/
This could have very serious results for the "Bull Market"
BB
Why Greece? Why .. would Russia, China, India and South Africa, invite Greece, into a bank that Bill Gates and Warren Buffet could form if they wanted to and have change? A 100n bank, to challenge the WB and IMF. Can you see Merkel and Obama ROTFL?
Baa_Baa
19-05-2015, 10:04 PM
posts per day on sharetrader slowing .... bull cycle definately coming to close
Sell in May and ... (fill the gap). Who hasn't seen this countless times before?
Apathy
19-05-2015, 10:51 PM
I went to the boat show yesterday and came very close to buying a flash boat...I was thinking I might as well have some fun while I lose my money.
The pending major CHH IPO will suck a LOT of whatever wind, if any, is left out of the market soon. A decent sized portfolio allocation to cash looks like a prudent move right at the minute.
NZ Inc isn't in good shape, certainly not anywhere near as good as the pollies would have us believe. $7b hole from dairy is not good. Chch rebuild is temporary boost to GDP, what if dairy doesn't recover ?
I struggle too see how the NZX50 will get above 6,000 this year, what catalyst would there be for that with most stocks already very fully priced.
Translation...if you're not in good dividend paying stocks on a sensible PE it'll be easy to get caught in a sideways market with minimal, if any, returns this year.
Expensive PE30+ stocks and no PE stocks because there's no earnings look vulnerable to any pullback to me.
PE expansion has been massive in the last 3 years, can't go on, real NZX50 EPS growth or the market goes nowhere as a whole or possibly downwards.
I recently trimmed my portfolio positions to the point where for risk mitigation purposes I won't have more than 10% of my portfolio value in any particular stock in any circumstances no matter what my level of conviction with the company. Happy to sit on the cash and in no hurry to reinvest at present. Gotta stay away from boat and car dealers this winter :)
Sell in May and go away appears to have some merit this year.
Hard to disagree - NZ Inc is in trouble, Dairy isn't recovering anytime soon and the impending correction of the dollar isn't going to have the normal benefit to manufacturing exporters as they are gone. Will chase inflation up though.
Only thing that may help the NZX - lot of cash coming in from Super funds that has to go somewhere...
noodles
20-05-2015, 12:11 AM
Hard to disagree - NZ Inc is in trouble, Dairy isn't recovering anytime soon and the impending correction of the dollar isn't going to have the normal benefit to manufacturing exporters as they are gone.
There are a few NZX companies that will hoping for a weaker kiwi and should prosper if NZ inc becomes sick.
SEK, SCL, CVT, AWK, DGL
All good kiwi "manufacturers"
Joshuatree
20-05-2015, 12:25 AM
and the Gentailers would be reasonably defensive ; assuming Tiwai draws the same or similar power.
kiora
20-05-2015, 02:55 AM
Some ideas
https://au.finance.yahoo.com/news/goldman-markets-going-nowhere-182920889.html
Apathy
20-05-2015, 09:21 AM
There are a few NZX companies that will hoping for a weaker kiwi and should prosper if NZ inc becomes sick.
SEK, SCL, CVT, AWK, DGL
All good kiwi "manufacturers"
True - but overall they really aren't manufacturers as such - predominantly primary produce and you can probably add a few more players from meat/fish/wine to the list as well as those involved in inbound tourism. Maybe retail benefits from reduction in online shopping offshore... but there are a fair few businesses from traditional manufacturing that have moved offshore and it will be interesting to see how that weighs on economy. Unemployment % is ok - actual numbers are actually quite high and that is even with the rebuild down south soaking up a lot.
Billy Boy
20-05-2015, 10:17 AM
Why Greece? Why .. would Russia, China, India and South Africa, invite Greece, into a bank that Bill Gates and Warren Buffet could form if they wanted to and have change? A 100n bank, to challenge the WB and IMF. Can you see Merkel and Obama ROTFL?
Did you read and understand the link ????
BB
Billy Boy
20-05-2015, 04:02 PM
Here's another take on things
"We tend to get the impression that Greece has no options, is a basket case and largely irrelevant to the rest of the world.
Nothing could be further from the truth, and their invitation to join the BRICS Development Bank on Monday suggests something very different.
· Greece may have near term challenges, however they are an important geo political pivot between Russia/Eurasia and Europe via the Black Sea and Mediterranean. From a strategic perspective they have a deep water port and can deliver Russian oil and gas via pipelines to Europe. For this reason the BRICS nations have offered them an olive branch and will likely be there to support if they were to be cast aside or decide they have had enough of Europe.
· Europe is desperate to keep Greece within the Euro and will likely go to any lengths to do so, because a default on their debt has enormous implications for the sovereign bond collateral of the European (and global) banking system. This collateral is the backbone of the global credit and derivatives markets that could seize up very rapidly if challenged. A default by Greece also could trigger a similar default for Spain, Portugal and Italy and an eventual breakup of the Euro and breakdown of the US dollar reserve system that is being challenged by Asia whatever the outcome of these Euro negotiations. Greece staying within the Euro delays the inevitable, as does Quantitative Easing (QE) and zero interest rate policies (ZIRP).
Some ideas
https://au.finance.yahoo.com/news/goldman-markets-going-nowhere-182920889.html
Yep-the rest of the world is not in such great shape either--they say either a correction or a long time going sideways.
Here's another take on things
"We tend to get the impression that Greece has no options, is a basket case and largely irrelevant to the rest of the world.
Nothing could be further from the truth, and their invitation to join the BRICS Development Bank on Monday suggests something very different.
· Greece may have near term challenges, however they are an important geo political pivot between Russia/Eurasia and Europe via the Black Sea and Mediterranean. From a strategic perspective they have a deep water port and can deliver Russian oil and gas via pipelines to Europe. For this reason the BRICS nations have offered them an olive branch and will likely be there to support if they were to be cast aside or decide they have had enough of Europe.
· Europe is desperate to keep Greece within the Euro and will likely go to any lengths to do so, because a default on their debt has enormous implications for the sovereign bond collateral of the European (and global) banking system. This collateral is the backbone of the global credit and derivatives markets that could seize up very rapidly if challenged. A default by Greece also could trigger a similar default for Spain, Portugal and Italy and an eventual breakup of the Euro and breakdown of the US dollar reserve system that is being challenged by Asia whatever the outcome of these Euro negotiations. Greece staying within the Euro delays the inevitable, as does Quantitative Easing (QE) and zero interest rate policies (ZIRP).
The EU definitely wants Greece to stay for reasons you have pointed out--But Greece may be slowly realizing that they would be better off to go ahead and jump--To go back to their own currency that can be devalued to make their exports cheaper (instead of just running out of Europeon money) You can never run out of your own currency--it just goes down in value.---They may just say God d_mnit,we're Greek and proud of it--If we are going to be beaten down ,its going to be on our own terms.
Is this the case with us as well?
http://money.cnn.com/2015/05/19/news/economy/australia-no-recession-24-years-china-commodities/index.html
winner69
20-05-2015, 05:41 PM
Is this the case with us as well?
http://money.cnn.com/2015/05/19/news/economy/australia-no-recession-24-years-china-commodities/index.html
Think NZ has had 3 since 1991 ....we not the lucky country
91/ 97-98 / 07-09
Think NZ has had 3 since 1991 ....we not the lucky country
91/ 97-98 / 07-09
BUT..we are dependent on resources (mostly dairy now) and are becoming much more dependent on China (and Australia--which is dependent on ..well..you get the picture)
We really need more value added products
macduffy
21-05-2015, 08:36 AM
True - up to the point where no-one trusts it or uses it, eg. Zimbabwe, where USD is the de facto currency of choice.
As for bull markets, it's a strange world where disappointing economic numbers cause markets to rise as investors bet that central banks won't have the nerve to stop priming the pump - at least, not yet!
Heres the equation----(economy down=fed wont increase interest rates)==sharemarket up (more lose money) unfortunately this equation does not = infinity
When you look around the economic landscape it is hard to see past the gigantic elephant in the room with you
Its hard not to get the feeling the players are just trying to push things just that little bit farther before things suddenly come unraveled
We are like frogs that have just about come to a boil
macduffy
21-05-2015, 08:59 AM
Heres the equation----(economy down=fed wont increase interest rates)==sharemarket up (more lose money) unfortunately this equation does not = infinity
When you look around the economic landscape it is hard to see past the gigantic elephant in the room with you
Its hard not to get the feeling the players are just trying to push things just that little bit farther before things suddenly come unraveled
We are like frogs that have just about come to a boil
Exactly! Is that the smart frogs I see jumping out of the water?
;)
couta1
21-05-2015, 04:29 PM
Exactly! Is that the smart frogs I see jumping out of the water?
;)
Maybe the smart frogs have seen it all before and being long term kinda frogs are quite happy to stay in the water and catch a bit of surfing on the waves created by all those panic type frogs jumping out:cool:
macduffy
21-05-2015, 07:57 PM
Maybe the smart frogs have seen it all before and being long term kinda frogs are quite happy to stay in the water and catch a bit of surfing on the waves created by all those panic type frogs jumping out:cool:
I doubt there's many longer term frogs than this one! But having been boiled before, I have taken the precaution of selling off a few of the pricier bits of my portfolio.
Onion
21-05-2015, 10:34 PM
I doubt there's many longer term frogs than this one! But having been boiled before, I have taken the precaution of selling off a few of the pricier bits of my portfolio.
What proportion of your investments are still in shares? And where are you shifting it to?
macduffy
22-05-2015, 08:53 AM
What proportion of your investments are still in shares? And where are you shifting it to?
As a longterm enthusiast for equities I don't hold entirely with the financial planners' doctrine of increasing the proportion of fixed interest at the expense of equities as one ages. Yes, safety of capital is important but so is maintaining, or increasing, income. So I make only minor concessions to aging and currently sit around 60% equities, 20% bonds and term deposits and 20% cash. Any further share sales will remain in cash meanwhile until something becomes too tempting not to buy!
But DYOR, of course.
kiora
22-05-2015, 01:19 PM
As a longterm enthusiast for equities I don't hold entirely with the financial planners' doctrine of increasing the proportion of fixed interest at the expense of equities as one ages. Yes, safety of capital is important but so is maintaining, or increasing, income. So I make only minor concessions to aging and currently sit around 60% equities, 20% bonds and term deposits and 20% cash. Any further share sales will remain in cash meanwhile until something becomes too tempting not to buy!
But DYOR, of course.
Entirely agree MacDuff
No point on retiring on so called "safe" investments that are going to be eroded into as retirement progresses
My portfolio is more extreme than yours with 100 % shares,property and private equity with no bonds & term deposits.I have a revolving credit facility for cash flow that fluctuates with investments maturing or paid out.
Happy and lucrative investing :)
winner69
23-05-2015, 08:49 AM
Janet doing exactly as she has been told to do, good girl Janet
"Yellen however emphasised that the rate-hiking process will be gradual, and it will likely be “several years” before the Fed gets interest rates to where it expects them to be over the long term"
http://www.businessinsider.com.au/closing-bell-may-22-2015-5
As one pundit said the increases will be so small nobody will notice.
Beagle
23-05-2015, 09:43 AM
As a longterm enthusiast for equities I don't hold entirely with the financial planners' doctrine of increasing the proportion of fixed interest at the expense of equities as one ages. Yes, safety of capital is important but so is maintaining, or increasing, income. So I make only minor concessions to aging and currently sit around 60% equities, 20% bonds and term deposits and 20% cash. Any further share sales will remain in cash meanwhile until something becomes too tempting not to buy!
But DYOR, of course.
FWIW that looks like a sensible asset allocation to me, approximately about where I'm at too :)
Maybe the smart frogs have seen it all before and being long term kinda frogs are quite happy to stay in the water and catch a bit of surfing on the waves created by all those panic type frogs jumping out:cool:
how could they have seen it all before when they have blind folds on
Entirely agree MacDuff
No point on retiring on so called "safe" investments that are going to be eroded into as retirement progresses
My portfolio is more extreme than yours with 100 % shares,property and private equity with no bonds & term deposits.I have a revolving credit facility for cash flow that fluctuates with investments maturing or paid out.
Happy and lucrative investing :)
Certainly the ''safe''assets like cash get eroded into as time goes on but this is not necessarily a permanent plan.
In this case ,for those who feel that things cannot carry on like this ,the share market at all time highs--the US economy still showing worrying signs that all is not well--the bubble(?)created by all that easy money from QE that has mostly gone into the share market--the fact that interest rates at effectively at zero cannot last forever and when they do go up,what will happen to that bubble that they have let inflate for all this time--for those people -perhaps retreating to saftey until the dust has settled is ,in fact the perfect way to keep those assets from eroding -----Is not making as much money worse than losing that money? Just how many crumbs are left on this piece of bread we call assets--at some point the risk vs reward becomes to great.
All things to consider especially if your getting on.
Ive been hearing more and more statements of uncertainty from financial spokesmen.
Ive pared right down on my shares for better or worse--I would certainly keep a close eye on shares if your still heavily in--Even though things could carry on for another year (conceivably) its at a point (I believe) that you need to stay in touch
kiora
23-05-2015, 03:00 PM
Certainly the ''safe''assets like cash get eroded into as time goes on but this is not necessarily a permanent plan.
In this case ,for those who feel that things cannot carry on like this ,the share market at all time highs--the US economy still showing worrying signs that all is not well--the bubble(?)created by all that easy money from QE that has mostly gone into the share market--the fact that interest rates at effectively at zero cannot last forever and when they do go up,what will happen to that bubble that they have let inflate for all this time--for those people -perhaps retreating to saftey until the dust has settled is ,in fact the perfect way to keep those assets from eroding -----Is not making as much money worse than losing that money? Just how many crumbs are left on this piece of bread we call assets--at some point the risk vs reward becomes to great.
All things to consider especially if your getting on.
Ive been hearing more and more statements of uncertainty from financial spokesmen.
Ive pared right down on my shares for better or worse--I would certainly keep a close eye on shares if your still heavily in--Even though things could carry on for another year (conceivably) its at a point (I believe) that you need to stay in touch
Yes Skid ,definitely need to stay in touch with what's going on especially if fully invested.
My assertions are;
There is a tidal wave of money to invest derived from China.
"However, we have all learned that nothing major happens in China without government approval. The rise in the sharemarket is part of a much bigger plan. Leaving aside healthy and major corrections, if the Shanghai Index is a bubble, China’s grand plan is in tatters. That’s not likely."
http://www.businessspectator.com.au/article/2015/4/16/china/chinas-stock-revolution-transforming-global-capital-markets
What I suggest is likely to happen over the next few years is very slow increase in interest rates leading to an increase in takeovers this year and greater volatility
What I,m suggesting,if you think the Auckland housing market is a bubble wait until the share market's here & overseas start to inflate from the wave of Chinese investment funds seeking somewhere to park due changes in their investment rules
Stock indexes continue to go up long term,sometimes we need to ignore short term volatility rather than trade the volatile periods otherwise we could find we are owned by another sovereign nation, more so than we are now.
Billy Boy
23-05-2015, 04:57 PM
http://www.interest.co.nz/bonds/75629/squirrels-john-bolton-reports-back-san-diego-whats-keeping-us-financial-markets
What will be the trigger ????
BB
kiora
23-05-2015, 05:48 PM
http://www.interest.co.nz/bonds/75629/squirrels-john-bolton-reports-back-san-diego-whats-keeping-us-financial-markets
What will be the trigger ????
BB
When will it trigger and by how much ?
What is your strategy for now?
What if the trend is as Goldman Sachs predicts
http://www.businessinsider.com.au/goldman-sachs-2015-sp-500-target-2100-2014-11
Oh s@$%t
Looks like GS has the most positive prediction of a meager 5% increase in the stock market--thats the most positive
Yes Skid ,definitely need to stay in touch with what's going on especially if fully invested.
My assertions are;
There is a tidal wave of money to invest derived from China.
"However, we have all learned that nothing major happens in China without government approval. The rise in the sharemarket is part of a much bigger plan. Leaving aside healthy and major corrections, if the Shanghai Index is a bubble, China’s grand plan is in tatters. That’s not likely."
http://www.businessspectator.com.au/article/2015/4/16/china/chinas-stock-revolution-transforming-global-capital-markets
What I suggest is likely to happen over the next few years is very slow increase in interest rates leading to an increase in takeovers this year and greater volatility
What I,m suggesting,if you think the Auckland housing market is a bubble wait until the share market's here & overseas start to inflate from the wave of Chinese investment funds seeking somewhere to park due changes in their investment rules
Stock indexes continue to go up long term,sometimes we need to ignore short term volatility rather than trade the volatile periods otherwise we could find we are owned by another sovereign nation, more so than we are now.
That last sentence is always a worry--In terms of shares they really need to try to minimize actual takeovers--but it is a worry (Its a bit like the rural folks who need jobs to support families -but the only way to do that is to destroy their environment.
Real estate (especially large chunks) is a far greater worry to me--i believe there should be some restrictions on size)
They have made some small changes in the purchase of housing (at least they need an IRD number now) I think they should have to be permanent residents and need to have a look at tightening the requirements -or charge a tax on foreign ownership.
The fact that the Auckland housing market is pricing normal Kiwis out leaves not much room for avoiding foreign ownership-something will have to give. (Its my bread and butter but I would happily take a drop in values to keep that from happening)
Billy Boy
24-05-2015, 01:18 PM
When will it trigger and by how much ?
What is your strategy for now?
What if the trend is as Goldman Sachs predicts
http://www.businessinsider.com.au/goldman-sachs-2015-sp-500-target-2100-2014-11
Oh s@$%t
Good Q.'s
1. I recently Posted June on the info available at the time. One of my indicators was the Fed lifting interesting rate's. It seams they may delay this for a few months, watch this space as it will have quite an effect.
Also the China factor. They are moving away from spending on infrastructure into more manufacturing etc.. hence the big crackdown on corruption etc.. also remember China has been "QE'ing for some time now and are winding it back. Greece :- has gotta a lotta dosh to find by the end of June and the bank runs are starting.
My strategy for now. (right now)
Slowly slide out of equities (hold growth coy's, ditch divvy Coy's) in general... take profit's !!
3. I don't all together agree, volatile ?? ... think in terms of Brittle. Hence (1) cause ??
BB:)
My stratgey--Ive taken my profits and am heading for Southeast Asia for a good chunk of the winter--Hell you only live once.:)
Stranger_Danger
24-05-2015, 02:16 PM
Looks like GS has the most positive prediction of a meager 5% increase in the stock market--thats the most positive
That is the number one thing that worries me.
I'm definitely a bit bearish (though, more in theory than practice, that sell button is proving harder to hit!) but when all the experts seem to be on the same side of the boat, well, in my experience, markets generally do the exact opposite.
kiora
24-05-2015, 02:29 PM
My stratgey--Ive taken my profits and am heading for Southeast Asia for a good chunk of the winter--Hell you only live once.:)
Good call skid :)
Surfing ? Try Mentawais
https://www.youtube.com/watch?v=r_iGk9JcBWQ
Good call skid :)
Surfing ? Try Mentawais
https://www.youtube.com/watch?v=r_iGk9JcBWQ---Looks nice and
Air Asia even flies to Padang
Cheers
kiora
25-05-2015, 04:19 AM
---Looks nice and
Air Asia even flies to Padang
Cheers
Yes from KL to Padang ? only but take plenty of warm cloths on board because they keep cabin freezing then hire out blankets :)
kiora
25-05-2015, 06:40 AM
When will it trigger and by how much ?
What is your strategy for now?
What if the trend is as Goldman Sachs predicts
http://www.businessinsider.com.au/goldman-sachs-2015-sp-500-target-2100-2014-11
Oh s@$%t
"Hong Kong's stock exchange also linked up with Shanghai's last year, unleashing mainland investment that has driven Hong Kong share prices to record levels."
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11436246
Yes from KL to Padang ? only but take plenty of warm cloths on board because they keep cabin freezing then hire out blankets :)
I know what you mean!--I dont think Ive ever been so cold in my life as I was on a bus in the tropics(Cambodia)--never could figure that one out (except for the blanket hire on AA:)---Its hard to even get water on their long haul flts--but they are great for cheap short flights
"Hong Kong's stock exchange also linked up with Shanghai's last year, unleashing mainland investment that has driven Hong Kong share prices to record levels."
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11436246
One thing is for sure China certainly has a rising middle class.--while we are on the subject of both China and travel--one year in Northern Thailand (Chiang Mai)there were suddenly hoards of Chinese every where---the next ,it was back to normal(apparently the gov put a tariff on travel to get them to spend their dosh at home)
http://www.marketwatch.com/story/shanghai-stocks-dip-into-correction-territory-2015-05-29
Shanghai stock market dropped 6.5% on Thurs (now 3rd largest in the world) Ay Carumba!
it leveled off on Fri but investors are nervous (and so am I ,in this little country that depends so much on China)
kiora
31-05-2015, 05:24 PM
"Hong Kong's stock exchange also linked up with Shanghai's last year, unleashing mainland investment that has driven Hong Kong share prices to record levels."
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11436246
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11456689
kiora
01-06-2015, 07:55 PM
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11456689
They don't do things by halves
cf 2007 when central bank increased interest rates this time they are lowering them
https://au.pfinance.yahoo.com/education/investing/article/-/28300022/china-550-billion-stock-wipeout/
Joshuatree
01-06-2015, 08:20 PM
I posted this on the ARI thread too.
"China accounted for 85% of world growth in 2012 , 54% in 13, 30% in 14 and est 24% this year.
"Between 2011 -13 China made more cement than the USA did in the 20th century" nz herald methinks
Nasi Goreng
29-06-2015, 10:13 AM
S&P 500 futures down 2%, Euro is tanking, US treasuries are highest in weeks and SPK trades 1c down lol. What are your projections for the days end for whatever markets you are long.
I am holding DAX index and while I've made a gain this morning on EUD/USD, it may be eclipsed tonight when German market opens.
couta1
29-06-2015, 10:16 AM
Think Greece for Macro effect:eek2:
bull....
29-06-2015, 10:29 AM
drop below 5700 could spell correction time nzx?
Nasi Goreng
29-06-2015, 11:30 AM
If ASX200 closes below 5400, that will be a correction from recent highs which were right on 6000. It will be interesting to watch the miners today with weaker AUD, interest rate decrease in China vs global sentiment. They got battered toward the end of last week so there could be some bargain hunters if they drop further on the open.
I agree that a close below 5700 could spell trouble for NZX.
drop below 5700 could spell correction time nzx?
Bull we have been in a correction since 18th March...At present the NZ stockmarket has lost about -5% of its capital..Looking at the NZX50 index chart it is not noticeable due to the dividends and weightings (smoke and mirrors)..but believe me there is a correction going on. There are lesser and lesser stocks holding the NZX50 index up and increasing stocks numbers are starting to bust their MA200 lines (one bear cycle measurement)...
Is NZ stockmarket reversing into a Bear market cycle?...The start is too hard to predict as this medium term downtrend could also a healthy bull market correction...
My post is most suited to another thread so read my expanded post HERE (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page26)
bull....
29-06-2015, 01:24 PM
Hi hoop yes see what your saying about march and some nzx indices like mid, small caps and the nzx20 probably have been in correction since then.
but nzx10 and 50 I would say no as they bounced back in may while the other ones didn't so had a bit of a divergence going on I reckon probably funds sticking to big caps mainly.
Anyway I see if they go thru 5700 they may well join the other indices as would have failed to make a new high from march and now would be threatning a new low below previous low in may.
workingdad
29-06-2015, 01:39 PM
Bull we have been in a correction since 18th March...At present the NZ stockmarket has lost about -5% of its capital..Looking at the NZX50 index chart it is not noticeable due to the dividends and weightings (smoke and mirrors)..but believe me there is a correction going on. There are lesser and lesser stocks holding the NZX50 index up and increasing stocks numbers are starting to bust their MA200 lines (one bear cycle measurement)...
Is NZ stockmarket reversing into a Bear market cycle?...The start is too hard to predict as this medium term downtrend could also a healthy bull market correction...
My post is most suited to another thread so read my expanded post HERE (http://www.sharetrader.co.nz/showthread.php?5171-Investing-strategies-and-secular-bear-markets/page26)
Excellent post thank you Hoop.
I am pretty new to this, started investing 2 years ago so had some good gains and some learning curves, all in all done pretty well and I have thought for the last few weeks things arent looking as rosy as they were, not just the collective value of the NZX50 but the behaviour of investors dumping so many shares on just a snippet of information or response to a newspaper article, so much overselling going on and what seemed like a generalised sell off spread over days of otherwise solid stocks and limited response to positive announcements, throw in the greece factor and its an eye opener.
My take as a newbie was two fold, some opportunity for good bargains but I actually sold half my holdings to hedge my bets a bit and probably should have done this two months ago but not complaining, still in the black :), I am watching closely and had plans to take advantage of some bargains in the next couple of days awaiting the Tiwai announcement. I would have bought in more in the last week or so but just havent seen the prices settle enough to click on the buy button just yet....
Appreciate the insight from an experianced viewpoint
couta1
30-06-2015, 08:17 AM
I'm really hoping Greece defaults and exits the Eurozone a bit more short term pain to endure for far more long term market gains, this country is a bottomless money hole with citizens who don't want to address their lifestyles.
Master98
30-06-2015, 08:31 AM
I'm really hoping Greece defaults and exits the Eurozone a bit more short term pain to endure for far more long term market gains, this country is a bottomless money hole with citizens who don't want to address their lifestyles.
agree with you re greece drama.
winner69
30-06-2015, 08:35 AM
Hoop -
I assume many NZ investors on ST have not experienced a bear cycle yet...If you feel pain at the moment with -5% then imagine the start of a bear cycle with another -15% .
Hoop, I Believe this is the case. Half cycles are fun when it's the up leg but the other half of the cycle cycle is a different case eh. Seems so long ago that last correction, let alone the crash before that.
Could be interesting times ahead .....be careful
warthog
30-06-2015, 09:13 AM
I'm really hoping Greece defaults and exits the Eurozone a bit more short term pain to endure for far more long term market gains, this country is a bottomless money hole with citizens who don't want to address their lifestyles.
With respect, this is parallel universe stuff. Do you have any comprehension of what is involved in a Greek exit from Europe? You seem to think that it's just about reprinting a few letterheads and business cards, and dusting off the old Drachma printing plates.
Greek "issues" pale in comparison to the high-level corruption, rorting of agricultural subsidies, etc. of Europe as a whole.
Just France is one hugely corrupt juggernaut on its own.
This is more about erosion of sovereignty and centralisation of control/power by industrialised Europe. The northern European countries (for example, Denmark, Sweden, UK) pick and choose which areas of European "cooperation" to suit themselves, opting out of the Euro, maintaining their own central bank control over interest rates (and therefore their economies) for example. One can understand why, of course, but it is a bit rich of Germany and France, having rigged Europe to suit their own interests, to expect to be creditors of anyone without risk of default
Of course, the IMF has its own agenda, which is basically US global fiscal policy. Jack Lew earlier this year told the US Financial Services Committee "Our investments in these institutions promote our strategic interests and international stability, … Every dollar of our participation leverages four more from other member countries.”
The same goes for the World Bank.
Have you been to Greece couta1? Know any Greeks? Sounds like you have a blinkered and hackneyed perspective.
The hog thinks that this whole Greece charade imploding now is very good news for those who have been driving stock and housing market bubbles around the world.
In short, everybody is talking about Greece, and as usual, few are critically examining how markets have become (for the most part) overvalued to the extent they are.
This isn't to say that everything is overvalued, of course.
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