Black Monday

**twotic** · 07-09-2015, 04:17 PM

Originally Posted by KW

I am saying that you should not assume that the reaction would be a positive one. The market may take the news that the Fed is no longer able to dictate its own interest rate policy for the benefit of its domestic economy, but is being dictated to by other central banks around the world looking to shore up their own economies - as not a great outcome.

Haha, I think you give the average Jo a bit too much credit. Central Bank Credibility is something I have only ever heard economists talk about. I understand what you are saying though. But you know, Central Banks actual cash rate vs their projected cash rates diverge all the time in reaction to market forces. If the FED believes market conditions have changed to the extent that they need to alter the forecast path of their cash rate then I suspect the likely outcome would be a bullish one as opposed to a bearish one (in the short term that is). Bigger picture though I suspect you and I are probably on the same wavelength. What % of your assets do you currently have in equities if you don't mind me asking?

**twotic** · 07-09-2015, 04:42 PM

Originally Posted by KW

I think the Fed is damned if they do and damned if they dont. They should raise rates - that signals that everything is on the right track in the economy for them to do so. Which it appears to be - albeit a very slow growing one. But the market loves the low interest rate environment as it keeps pumping the asset bubbles - which is not good for the long term, as all bubbles pop eventually. The wild card for the market is whether all the other stuff going on will have more impact on the market direction than the US interest rate.

I have about 40% still in equities - in AREITs only. I've exited all my growth stock positions (although note I only invest in Australia, and they are headed in to a recession, as well as suffering a stock market slump). I am holding about 20% in US$ which I want to use to buy US stocks - so I am waiting out this correction/bear market before doing so.

Yup, I agree.

I'm 100% out of equities (including kiwisaver) as of today. My situation dictates I need to minimise risk right now, but regardless I am taking the same position I did in 2007 which is get out and wait for it all to tumble. Might have started happening already, or might take another year or two, but I just can't envisage a situation where a crash is not inevitable in the near enough future - Time is on my side so I am happy to be patient and wait before entering again down the track.

**stevevai1983** · 07-09-2015, 04:59 PM

Originally Posted by skid

im not surprised they have bounced (by the Gov.)after all the celebrations--Its huge 1 or only 2 per year----All the chinese tourists were watching it on their computers at our hotel.
Guess the test will be when it gets back to the real reasons it happened in the first place---most markets will probably do better today(barring US which is on holiday)

Gov stated last night: they will not buy anymore shares unless it reaches "crisis" level again.
Today's bounced is not by Gov.
Majority Chinese investors are still very pessimistic about the near future.

Chinese market is far more complicated than NZ here.
We now have most blue chip stocks that are fair valued, some of them are even quite cheap.
However we have the rest average or crap companies that are still extremely over valued. Lots of stocks still have PE more than 100 or PB more than 10.

It's hard for value investor like me atm.
e.g I hold some top quality stocks that are fairly valued or cheap. However if the market crashes again, those stocks may become "cheaper"

**Beagle** · 07-09-2015, 05:57 PM

Originally Posted by BlackPeter

I agree - however I am not sure whether it is better to just let the Russians take whatever countries they please. As far as I remember - appeasement has been tried before, and it didn't work. Maybe time to invest into defense?

Yes...who can ever forget Hitler. I think sending the F22's sends a signal that needs to be sent both in terms of America's support for Nato and the implied threat of retaliation against the encroachment by the Russians into Ukraine.
There's so many things to worry about on a global basis its often hard to know what's most concerning ?
Its ironic you mention investing in defence. I actually looked into who makes the predator drones the other day, (I think there will be stunning exponential growth in demand for weaponised drones as war's by proxy evolve in different theatre's all over the world). General Atomics...here you are https://en.wikipedia.org/wiki/Genera..._MQ-1_Predator

I wouldn't mind betting they can't build these things fast enough but I don't have the stomach to invest in weapons manufacturers.

**Beagle** · 07-09-2015, 06:24 PM

The way Putin's heading they might be jumping out of the frying pan into the fire

Sometimes it's nice to be a long way away from all the trouble isn't it.
Now I'm sitting on a pile of cash, like you I'm not fretting this thing too much. Went for a good walk in the sun this afternoon, felt good to smell the roses so too speak.

**couta1** · 07-09-2015, 06:33 PM

Meanwhile retirement villages are still selling units, Air is still flying planes, power companies are still producing power etc etc and will continue to do so

**Beagle** · 07-09-2015, 06:44 PM

And Jaguar dealers are still selling the occasional Jaguar

...just not too me LOL

**couta1** · 07-09-2015, 07:13 PM

Originally Posted by Roger

And Jaguar dealers are still selling the occasional Jaguar

...just not too me LOL

No worries mate, I've got a modified job you can buy, no air con or other fancy stuff just 650 ponies of tyre shredding power, oh and I forgot to mention it does 4.5km per litre of gas.

**Hectorplains** · 07-09-2015, 07:28 PM

Originally Posted by Roger

Yes...who can ever forget Hitler. I think sending the F22's sends a signal that needs to be sent both in terms of America's support for Nato and the implied threat of retaliation against the encroachment by the Russians into Ukraine.
There's so many things to worry about on a global basis its often hard to know what's most concerning ?
Its ironic you mention investing in defence. I actually looked into who makes the predator drones the other day, (I think there will be stunning exponential growth in demand for weaponised drones as war's by proxy evolve in different theatre's all over the world). General Atomics...here you are https://en.wikipedia.org/wiki/Genera..._MQ-1_Predator

I wouldn't mind betting they can't build these things fast enough but I don't have the stomach to invest in weapons manufacturers.

Ah there it is! Godwin's law...