Is a Bear Market starting to play out on the NZX ?

[martinchnz1]

If only it were easy to create short positions. Stocks surpassing PE of 40 amidst all of this. Noobs want to join the last hint of a bull before being really shown to stay out of the stock market.

[dobby41]

If only it were easy to create short positions. Stocks surpassing PE of 40 amidst all of this. Noobs want to join the last hint of a bull before being really shown to stay out of the stock market.

And that would be a historical earnings wouldn't it?
Who knows what the future earnings will be.

[Beagle]

Have to confess I have really been scratching my head quite a lot about the way the market has bounced back ?
Excellent article by Mark lister explains this and suggests a pause on buying is warranted
https://www.nzherald.co.nz/business/...ectid=12324373
Yes the NZX50 has bounced back strongly and is now down only 17% from its peak in February but take out the strong performance of the two top stocks ATM and FPH and the other 48 companies in the NZX50 are down 27.3%

[Cyclical]

Have to confess I have really been scratching my head quite a lot about the way the market has bounced back ?
Excellent article by Mark lister explains this and suggests a pause on buying is warranted
https://www.nzherald.co.nz/business/...ectid=12324373
Yes the NZX50 has bounced back strongly and is now down only 17% from its peak in February but take out the strong performance of the two top stocks ATM and FPH and the other 48 companies in the NZX50 are down 27.3%

Good article. The closing paragraph sums it up my own sentiment:

"As for me, I've been in the buy camp these past few weeks. However, after this rebound I'd be happy to pause for now and sit tight. While opportunities undeniably exist for long-term investors, it does feel like things might have got just a little bit ahead of themselves."

[Beagle]

Another useful reality check for anyone who thinks this virus or its economic effects will be an easy beat. https://www.nzherald.co.nz/world/new...ectid=12324356

[winner69]

Have to confess I have really been scratching my head quite a lot about the way the market has bounced back ?
Excellent article by Mark lister explains this and suggests a pause on buying is warranted
https://www.nzherald.co.nz/business/...ectid=12324373
Yes the NZX50 has bounced back strongly and is now down only 17% from its peak in February buttake out the strong performance of the two top stocks ATM and FPH and the other 48 companies in the NZX50 are down 27.3%

Interesting about the 48 being down 27%

So you essentially got your bear market

Wonder if the 48 will go to 48% down

[Beagle]

Interesting about the 48 being down 27%

So you essentially got your bear market

Wonder if the 48 will go to 48% down

Sure is. Pretty good chance of that happening in my opinion. Apart from extreme value situations like recent buying of MET in the mid $3's I am keeping my powder dry.

[Beagle]

https://www.nzherald.co.nz/business/...ectid=12332705 This guy reckons its going to get really ugly and he has a good track record of predicting such things. I still think there's at the very least a 50% chance we're headed for a depression. In my opinion the best case is an ugly and deep recession and a bounce-back of sorts sometime in late 2021.

Market appears to be currently pricing in a vaccine by the end of 2020 which will be widely available in early 2021...but what if that doesn't happen ?

[Aaron]

https://www.nzherald.co.nz/business/...ectid=12332705 This guy reckons its going to get really ugly and he has a good track record of predicting such things. I still think there's at the very least a 50% chance we're headed for a depression. In my opinion the best case is an ugly and deep recession and a bounce-back of sorts sometime in late 2021.

Market appears to be currently pricing in a vaccine by the end of 2020 which will be widely available in early 2021...but what if that doesn't happen ?

Does Harry Dent have really have that good a record??
He has been saying the same thing for quite a few years now.

That said I don't disagree with him. Too much debt too much central bank blowing bubbles and I think he is predicting that with peak boomer retirement their spending will decrease and they will switch their portfolio's from equities to fixed interest causing deflation and asset prices to fall. Also they will be selling their houses to something smaller. Sounds reasonable but with interest rates and rampant money printing it is more likely boomers will increase their equity holdings that may be part of what we have been seeing with the bounce in share prices.
I wonder why his views were ignored by mainstream media for the last 5 or more years. We haven't seen any of his predictions come to fruition just yet.

Central Banks have a mandate (not from me) to push up prices at least 1%-3% per year that can do this by making money less valuable through money printing and suppressing interest rates.

[Beagle]

I don't really know the guy or his record to be honest but the article reckoned he had a record of sorts, who knows, I guess even a broken clock is right twice a day.
Some of the things he suggets seem logical enough and worry me.

We started this Covid 19 mess with debt / GDP at just 20% so are better placed than most countries to weather this storm. Also we are better placed than most in terms of trying to get on top of this thing. How long will the storm endure ?

My greatest fear is the Govt having almost thrown the kitchen sink at this thing will have nothing left in the kitty, (aside from their $20b reserve, which I acknowledge is a fair bit) to throw at problems if we get a second wave.

I can't predict the future and I think anyone who tells you they can is delusional but what we do know is that almost every other country who has loosened their lockdown restrictions has faced a second wave of infections so I am extremely cautious. If we can get through the next 28 days with no sign of community transmission we might have beaten this thing, here, and then we just have the not so minor impact of the borders being closed for a protracted period of time to deal with and well as (potentially) most of the world's major economies in a global depression.

I struggle to foresee how this ends well anytime soon. Most shares seem priced for a more optimistic scenario than I can realistically foresee.
Perhaps the truth is the outlook is potentially so ugly, many investors are simply hoping for the best. Hope is a great investment strategy, or is it ?