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Thread: Black Monday

  1. #4711
    ShareTrader Legend bull....'s Avatar
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    the big bounce didnt last long just gone negative dow as i write. im picking big ranges will develop once the correction over and these ranges wont conclude in a direction until next yr.

    aus looks ugly as for monday be surprised if nz is not down as well. i noticed the strong buying was very narrow in nz to push the indexs up sort of created a false impression really.

    A large chunk of nz companies have probably passed peak earnings as the economy comes of the boil , the saving grace for the rally really was the us markets for nzx as they were following each other quite closely. a lot of hot money was flowing in because of out performance.

    anyway as i say im moving a large chunk to cash i have had a exceptional 10yrs i dont need to be greedy , also as im still resonably young im paying off my mortgage and other debt and whats left will be my play money. Im going for an extended holiday shortly from the markets except for a few div income stocks which i dont really care if they go down.
    one step ahead of the herd

  2. #4712
    percy
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    Yes the last few years have been very kind to us.
    This week I sold BIN in Aussie.Bin good to me,however I lacked total conviction, so sold.
    Most of my NZ portfolio is made up of companies paying increasing fully imputed divies,so no changes need to be made.
    Already had the portfolio "well positioned" for what ever the markets decided to do.

  3. #4713
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    Quote Originally Posted by percy View Post
    Yes the last few years have been very kind to us.
    This week I sold BIN in Aussie.Bin good to me,however I lacked total conviction, so sold.
    Most of my NZ portfolio is made up of companies paying increasing fully imputed divies,so no changes need to be made.
    Already had the portfolio "well positioned" for what ever the markets decided to do.
    Time in the market more important than timing the market, like you I have a selection of excellent divvy paying stocks plus defensive growth stocks like OCA, this week was a timely reminder not to be overweight in high PE growth stocks like A2 at this late stage of the bull cycle as those stocks will bare the brunt of any prolonged correction. PS-You spoke too soon bull, US finished nicely in the blue so expecting the same on the NZX come Monday.

  4. #4714
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    Quote Originally Posted by couta1 View Post
    Time in the market more important than timing the market, like you I have a selection of excellent divvy paying stocks plus defensive growth stocks like OCA, this week was a timely reminder not to be overweight in high PE growth stocks like A2 at this late stage of the bull cycle as those stocks will bare the brunt of any prolonged correction. PS-You spoke too soon bull, US finished nicely in the blue so expecting the same on the NZX come Monday.
    Most analysts were predicting a bounce in the short term...but are generally concerned about the medium to long term.(still probably good to keep an eye out for the dead cat scenario.
    They need those interest hikes against inflation and as a buffer for if/when things go south...if they cant get away with them without carnage then there will be serious trouble coming when it does go pear shaped---That buy and hold has proved to be a decent strategy in terms of a spread of blue chips that more or less represent the market....individual shares are a different story,depending on how much they vary from the theme....Im sure the folks down at PEB can attest to that
    Last edited by skid; 13-10-2018 at 08:49 AM.

  5. #4715
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    Those trillions in ETF's are another elephant in the room, should there be a move for the exit.
    How are you going skid? interested in what you've been doing investment wise? You've been very cautious over the years, arguably over conservative in this long bull mkt. Whats your take and are you all out of the mkt ? cheers JT

  6. #4716
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    Okay, people chewing over their portfolio all weekend, licking wounds and/or sighing with relief. Whatever happens next week, happens but people will be looking to re-evaluate their exposure and their ability to sleep in tricky times. Many will be looking for more stable pocket water in a swollen river. Hey, makes OCA look pretty good.

  7. #4717
    ShareTrader Legend Beagle's Avatar
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    Rising interest rates in the U.S. may be a sign of things to come. PE contraction for high PE companies a real possibility if we see the 10 year rate expand due to inflationary considerations. We have had a exceptional run in this bull market for nearly 10 years. Going forward I think a more defensive / value approach is warranted. I will leave high forward PE stocks for others to enjoy in terms of their risk-reward equation.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  8. #4718
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    Quote Originally Posted by Beagle View Post
    Rising interest rates in the U.S. may be a sign of things to come. PE contraction for high PE companies a real possibility if we see the 10 year rate expand due to inflationary considerations. We have had a exceptional run in this bull market for nearly 10 years. Going forward I think a more defensive / value approach is warranted. I will leave high forward PE stocks for others to enjoy in terms of their risk-reward equation.
    From my own research [Not that I'm qualified to make these calls or anything] I would say that every single Market crash has seen the reserve bank raising interest rates aggressively prior. The problem isn't that they shouldn't raise interest rates. It is just that there is a very fine line between where they need to be to keep inflation in check and overshooting the mark so to speak. Should they raise too slowly then Inflation grows rapidly and people loose confidence in currency [very bad]. Raise too fast and people/companies with a lot of debt default and the market crashes. Hit the mark and the markets keep humming along but not at the same pace as I understand it, minimal defaults, and everyone is out spending as they normally do which keeps the system ticking over.

    According to Ray Dalio, we are very close to the end of the cycle. Be defensive, cash is king if unsure, And keep calm!. (Read his book, It is free and explains a lot)

    https://www.cnbc.com/2018/09/11/bill...mic-cycle.html

  9. #4719
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    From what I've been reading over the weekend, what happened to the markets last week falls easily within the bounds of 'normal volatility' & not the start of something more worrying.
    There's no recession coming, either in the US or here, and anything which anyone could possibly claim to have triggered this (e.g. slightly raised interest rates) has been known about & anticipated for so long, it's already been factored in to the general equation/prices.
    In other words, nothings happened last week which has taken 'the market' by surprise, so any loss of confidence is likely to be artificial (whipped up by media hyperbole, herd reinforcement, algorithms etc etc) & therefore short lived.
    In the US, if we take the FANG's (Facebook, Amazon,Netflix & Google ) out of the equation, average US company earnings are at a PE of around 13 with forecast projected earnings growth of around 20% next year, maybe a little less the following year, which sounds fine to me. Trump's going to meet with China's Xi Jinping next month & likely hammer out a trade deal which will be v positive.
    Here, obviously a few stocks with high PE's like A2 which are so difficult to put a value on are going to swing wildly, but I could just as well imagine it being back at $13 before Christmas. Many others have conservative PE's & are making good profits.
    Anyway just thought i'ld add a few thoughts to the mix at the end of the weekend.

    PS & good luck everyone for the coming week
    Last edited by Blue Skies; 14-10-2018 at 09:45 PM.

  10. #4720
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    Quote Originally Posted by Blue Skies View Post
    From what I've been reading over the weekend, what happened to the markets last week falls easily within the bounds of 'normal volatility' & not the start of something more worrying.
    There's no recession coming, either in the US or here, and anything which anyone could possibly claim to have triggered this (e.g. slightly raised interest rates) has been known about & anticipated for so long, it's already been factored in to the general equation/prices.
    In other words, nothings happened last week which has taken 'the market' by surprise, so any loss of confidence is likely to be artificial (whipped up by media hyperbole, herd reinforcement, algorithms etc etc) & therefore short lived.
    In the US, if we take the FANG's (Facebook, Amazon,Netflix & Google ) out of the equation, average US company earnings are at a PE of around 13 with forecast projected earnings growth of around 20% next year, maybe a little less the following year, which sounds fine to me. Trump's going to meet with China's Xi Jinping next month & likely hammer out a trade deal which will be v positive.
    Here, obviously a few stocks with high PE's like A2 which are so difficult to put a value on are going to swing wildly, but I could just as well imagine it being back at $13 before Christmas. Many others have conservative PE's & are making good profits.
    Anyway just thought i'ld add a few thoughts to the mix at the end of the weekend.

    PS & good luck everyone for the coming week
    conservative PE are the way forward, had cashed up in September half my FANGs portflio and really found I was too attached to them as they have been so good to me..currently happy to have the cash set aside. Expected October volatility as per usual in the northern parts, no really surprise is it? London is getting a tad cold and my last visit in early December to the US will see only decent weather in LA. It’s winter for the money people of the world...

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