Black Monday

[limmy]

So what were the determinating factors, mimimoke that made you exit the markets at the right time?

[Lewylewylewy]

I don't think the market has much further to fall. The reason i say this is that it's falling on sentiment, fundamentals are still good. The us will announce something to curb the fear. Also, take a look at the nzx index and also the dow jones index. Both had irrational exuberance starting around Nov (sentiment up), now they're just dropping back down to the levels prior to that (sentiment down). It will stop dropping soon, then it will level out and creep up towards earnings season.

Seriously, Google each index and draw a line averaging the years increase without the November boom. You'll see what i mean. I think it'll drop a little below the end of the average line to represent the fear sentiment then stop dropping.

Hopefully I'm not proven wrong because it's to late to be selling out and i plan to make some cash on the drop of this year.

[minimoke]

So what were the determinating factors, mimimoke that made you exit the markets at the right time?

Hmm - there is no skill I'm afraid. For example.....

Back in the day my mates and i would lend each other money every payday and we'd buy a few more Equiticorp or Judgecorp or Brierley or gold corp. Great days. Just like the folks are having in the Cryptocurencies today. Anyhow, got home one morning after a slightly boozy night and copped a bit of grief from flatmate who owned the place. I go "bugger this - I'll buy my own. So I was heavily into Equiticorp at the time and put them on the block. Sold, bought house and a month or so late Equiticorp goes tits up along with everything else.

2000 was about thinking about a change in lifestyle. Property development came and numbers looked like good gain could be made. But I needed to fund it. So shares had to go on the block. Again not longer after the market looked a bit ugly.

If there is one lesson it might be to have an eye out for an opportunity and look at the numbers. Follow the numbers - they tend not to lie

[BlackPeter]

When the recession hit in 2009, can anybody remember how much % stocks in NZ fell - I'm a relative new investor of two months and I think I've started at the wrong time, especially if there will be another recession. In a space of less than a week, my profit went from 10% to 1.5%.

NZX50 went down from something like 4200 to 2500 - i.e. roughly 40% down.

[BlackPeter]

Still just blowing a bit of froth off the top, albeit big volatile swings this week, they're only just chinning the "correction" bar and far from a 'crash'. Interesting DOW 23860 has provided support twice, bounce once. If the 200 DMA breaks, current 22318, then likely fall all the way to a test of really strong long term support in the range 18500-18350.

Do the maths, for every 1000 points down in the DOW, what that means for the NZX, based on recent moves. Now look at the shares that you like and how they're affected, then finally decide whether riding out a Correction, a Crash or worse, a Bear is better than taking capital off the table and later on buying a whole lot more of the same share when the bottom is in.

Hands up who was actually involved in 87, or the Dot Bomb, or GFC, and what lessons you learnt and will apply now if it unfolds again? I share my lessons every time I mention tightly managing capital, trading momentum and using the charts to monitor sentiment and pick exits and entries.

Corrections are a fact of being in the market, riding out Crashes is optional, they are mean and can disproportionally affect shares held and doing nothing misses the leverage of selling and buying lower, but riding a Bear affects everything and can take years and years and years to recover from.

BAA

You are so right. The only problem is that it is so much easier to distinguish between corrections, crashes and bear markets with the benefit of hindsight.

If you sell too much too early, you can lose not just a lot of brokerage, but as well opportunity cost (for losing out the begin of the uptrend).

So - what to you think which of the three options it will be?

Just to clarify - I am not proposing to hold whatever comes, but people who are still holding shouldn't feel bad in my view.

Myself - I did increase my cash (some stop losses triggered) ... but still more than 80% invested (down from more than 90%). Do I believe this one is turning into a bear? Not really, but for sure it will pay to be careful.

[winner69]

In 2011 when there was a decent correction I was out of the country and mostly unaware of what was unfolding. All turned out OK

When the GFC of 2007/2008 impacted the markets I was essentially cashed up. The NZX had been weakening from beginning of the year and most of the shares I had at the time had stopped going up and had hit trailing stops and had already been disposed off. The few residual ones left the kennel in 2008

One of the shares that had stopped going up was FBU - what a trade though. Turned out a multi year trade all the way from $2 odd to $13 odd ....cool eh

In 2000 the NZX bypassed the dot com boom and was unaffected but did join the party when the world got excited again 2002. I never got tempted like by mates to these dot com wonders because I just that valuations were just stupid.

In 1987 I was fortunate that I recently bought a bigger house and didn’t have much in the market. Lost a little but not much

In the early 70s when the oil crisis stuffed the world and we had carless days and that sort of stuff I was too busy paying off a 27%pa mortgage to care too much about shares

My ‘investing’ strategy is clearly outlined at the beginning of a thread on investing in secular markets. It has stood the test of time and hopefully get me through this time.

[Lorne Ranger]

[QUOTE=BlackPeter;703282]You are so right. The only problem is that it is so much easier to distinguish between corrections, crashes and bear markets with the benefit of hindsight.

Yeah I sometimes feel, as a modest investor/trader, that Im almost certain to be one of the last to know when a real crash starts to happen. Big corporate traders have the share numbers to really move the market one way or another and the tools to tinker in real time - theres a sceptical part of me that suspects it's a mutual kind of agreement that keeps it all afloat and as soon as one major player starts selling out, the other major players follow and it's all over, and the smaller investor just gets sucked down with it. We're all just dancing on the edge of the abyss complaining about the view.

Whoa, fever dream. Too much sugar after 6

[Yoda]

Attachment 9477
Down from +5 to-4% in the month .....

I am happy to have sold a. 1/3.
Happy to buy back when things settle, ora good opportunity arises but was keen to get some ERD, and didn't have any cash, so a good excuse to move things around .
Thanks to all for sharing opinions.

[kiora]

I concur with your experience MM.We all make our own luck(or not)

[Valuegrowth]

Another category to watch in global markets is late stage winners.

http://awealthofcommonsense.com/2017...he-next-crash/

Stock Market Valuations Won’t Predict the Next Crash

https://www.investopedia.com/article...predicting.asp

Profit without predicting the market