Black Monday

[skid]

i understand your sentiments.The NZ share market has not had that 10% correction so why get twitchy?--Well because the US and other overseas stock markets have had that 10% correction and we live in a world of globalization.So while it has'nt happened here ,it is a good time to exercise caution.
There is more than one way to do this and it doesnt necessarily mean selling everything--But you should be monitoring if you take it seriously.
In the end NZ is just a tiny little market that couldnt compete with Los Angles county so a stupid decision somewhere in another part of the world can ,unfortunately have a major affect on us.
you can adopt the opposite approach and buy up,hoping for a bargain but at this stage many would say that you are playing longer odds than waiting for things to settle overseas.
IMO everything operates within a framework -so you may have a good share that operates in the NZ share market worth just over 18,000,000---Whats to say you wont end up owning a good share in a NZ share market worth 15,000,000(because of dumb things happening overseas)--My guess is that the SP would have gone down,even though it rates just as good compared to the rest of the share market and is still a good company doing good things.
If bad things happen overseas I think its not realistic to not think at some stage NZ wont play follow the leader (When the US sneezes..and all that...)

This idea works for things like property as well--if the total property market is worth 10-20% less,and your property is still worth the same % of that total (lets say its a good property in a good suburb) its still going to be worth less,because the whole playing field has shifted because to much money has been wiped out of the whole market--even with a housing shortage

[Daytr]

Obviously fine not to agree, however if debt had just grown in line with GDP, it probably wouldn't be a problem, however it hasn't its soared in relation to GDP and that's an issue and a relatively new thing. Just look at a few charts of Japanese or US debt to GDP ratios over the last 50 years & the last 10 years stand out. The problem then is that to raise interest rates you also raise the cost of government borrowing and someone like Japan simply cannot afford to do it. The US isn't far away from that either. However US does have luxury of immigration and some growth.
Of course it can go on, however if the system is working there will be credit down grades & there will be less risk premium applied to more risky debt & we are already seeing that in the junk bond market. This is precisely what caused the credit crunch, the under pricing of risk.

Daytr,in short I can not agree with you.
I am 74 now and if there is one statement I have heard down the decades,it is that we [govts] just can not go on borrowing and all hell will break loose when it has to be paid back. For twenty or thirty years I did believe it but not anymore. The facts as we live it seem to be that numbers are without limit so so can money be. Have the US not raised there debt ceiling about 40 times and another one is to be decided in the next few weeks.
Well if it is to end then something different to the last 100 years will have to surface to change the equation,because as crazy as it sounds the present system works [somehow] so will probably keep on working. Which in facts means that for another 74 years the debt limit will keep on being raised and thousands of comments will be made that this just can not go on,but it will.
Cheers and I would not lose sleep over it.

[BlackCross]

The NZ share market has not had that 10% correction .......

For a lot of international investors, or funds, the NZX correction has already been over 20% :o(

[couta1]

Skid there will never be a time when bad things aren't happening either overseas or here either environmentally or economically or both that's the nature of the world we live in. Often times you just have to get amongst it and ride out the storms of life and that includes the market storms. Character is enhanced by learning to endure not so favourable times not by sitting on the sidelines and that applies to all areas of life not just the share market.

[fiasco]

Skid there will never be a time when bad things aren't happening either overseas or here either environmentally or economically or both that's the nature of the world we live in. Often times you just have to get amongst it and ride out the storms of life and that includes the market storms. Character is enhanced by learning to endure not so favourable times not by sitting on the sidelines and that applies to all areas of life not just the share market.

Not entirely convinced. There was an opinion piece I was reading in Juno on a flight this morning, in which the analyst was indicating, in time of uncertainty, it's safe to hold cash (many have indicated the same opinion), and investors must realise when to minimise their lose, during uncertainty. You could ride it out, but why suffer further incremental losses if you can minimise the damage and re-enter at a cheaper price once an uptrend has been signaled.

The comment around Character I think is rather subjective. Character could also be enhanced by discipline, by having an appropriate exit strategy, especially during a downturn.

[skid]

It depends on whether your talking a gamblers character or logical character---If your implying that being a gambler is the way to enhance character then I would have to disagree--you have simply mixed admirable attributes to a ridiculous situation in your post.
I would have thought you would have started to learn by now.
Im always puzzled how you can be carrying such large losses and still expect people to take your advice seriously. Ignoring the market is not a strategy. ( I had to chuckle as to whether you caught the symbolism of your down hill skiing comment)

[couta1]

It depends on whether your talking a gamblers character or logical character---If your implying that being a gambler is the way to enhance character then I would have to disagree--you have simply mixed admirable attributes to a ridiculous situation in your post.
I would have thought you would have started to learn by now.
Im always puzzled how you can be carrying such large losses and still expect people to take your advice seriously. Ignoring the market is not a strategy. ( I had to chuckle as to whether you caught the symbolism of your down hill skiing comment)

Its really quite simple Skid, mistakes made historically can take a long time to work through, you can either sell and realise those big paper losses or continue to hold and see what eventuates on a longer term basis which is the route I have chosen to take. I have learnt a lot but the sowing and reaping principle runs its course, theres no quick fix either way, sure going forward things can be done differently but just because I've chosen to ride things out has nothing to do with not learning. PS-Just off to tune my skis ready for a day on the mountain tomorrow

[kiora]

i understand your sentiments.The NZ share market has not had that 10% correction so why get twitchy?--Well because the US and other overseas stock markets have had that 10% correction and we live in a world of globalization.So while it has'nt happened here ,it is a good time to exercise caution.
There is more than one way to do this and it doesnt necessarily mean selling everything--But you should be monitoring if you take it seriously.
In the end NZ is just a tiny little market that couldnt compete with Los Angles county so a stupid decision somewhere in another part of the world can ,unfortunately have a major affect on us.
you can adopt the opposite approach and buy up,hoping for a bargain but at this stage many would say that you are playing longer odds than waiting for things to settle overseas.
IMO everything operates within a framework -so you may have a good share that operates in the NZ share market worth just over 18,000,000---Whats to say you wont end up owning a good share in a NZ share market worth 15,000,000(because of dumb things happening overseas)--My guess is that the SP would have gone down,even though it rates just as good compared to the rest of the share market and is still a good company doing good things.
If bad things happen overseas I think its not realistic to not think at some stage NZ wont play follow the leader (When the US sneezes..and all that...)

This idea works for things like property as well--if the total property market is worth 10-20% less,and your property is still worth the same % of that total (lets say its a good property in a good suburb) its still going to be worth less,because the whole playing field has shifted because to much money has been wiped out of the whole market--even with a housing shortage

Hi Skid
I agree on reviewing the portfolio regularly and sticking to your own "rules regarding when to sell' I have been complacent often.My portfolio value retreated 5 % from its peak but has since recovered to the value it was at its peak.Thinking about volatility and I would suggest the 10 % is too low.I would suggest more like 15%-20% before it is worth trading to allow for the lag before you sell on a dropping share price and lag before buy signals are triggered.I must admit my trading ability is probably crap anyway.Recently after reviewing my portfolio I was ready to sell SKL but luckily hesitated & I traded out of 2 shares that have since rebounded 10%.Luckily into another share that has gone up 15%

[skid]

Its really quite simple Skid, mistakes made historically can take a long time to work through, you can either sell and realise those big paper losses or continue to hold and see what eventuates on a longer term basis which is the route I have chosen to take. I have learnt a lot but the sowing and reaping principle runs its course, theres no quick fix either way, sure going forward things can be done differently but just because I've chosen to ride things out has nothing to do with not learning. PS-Just off to tune my skis ready for a day on the mountain tomorrow

Choosing to ride things out is very different than encouraging those on the sidelines to jump in--You have done your damage ,now you are trying to manage losses--your strategy is to ride it out--(do nothing?)--I would suggest it takes more courage to sell and move on (like you did with XRO) (where is it now ,somewhere in the $15 range)but everyone has their strategy--Im not suggesting everyone sell out completely--but to keep a close eye--my post was simply a response to your post-
Your paper losses are the same as real losses,because they represent money you cannot put to a potentially better cause--

Things have been looking overbought (in the US etc.) for a good while now--it has just taken the Chinese devaluation to bring it to the attention of many.
I dont need to be IN the sharemarket--I can sit and learn from the sidelines---I dont need to be in the middle of the action all the time(Ill leave that to the action heroes in the movies)

[skid]

Hi Skid
I agree on reviewing the portfolio regularly and sticking to your own "rules regarding when to sell' I have been complacent often.My portfolio value retreated 5 % from its peak but has since recovered to the value it was at its peak.Thinking about volatility and I would suggest the 10 % is too low.I would suggest more like 15%-20% before it is worth trading to allow for the lag before you sell on a dropping share price and lag before buy signals are triggered.I must admit my trading ability is probably crap anyway.Recently after reviewing my portfolio I was ready to sell SKL but luckily hesitated & I traded out of 2 shares that have rebounded 10%.Luckily into another share that has gone up 15%

Yep -keeping in touch is good--(congrates on the 5% profit)