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

[Ggcc]

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 ?

I definitely see a second wave happening. I went to the Mitre10 Mega in Napier and I believe there were at least 200-300 people in store. I had to staff right up in my face where I had to back off. People are just not caring at all about the virus, they just want life back to normal. So anyway I am waiting approx 2-3 months before we go back to level 3 if not sooner.

[percy]

Lets think.
Young guy who is an airline pilot married his true love ,who is a marketing executive for a top tourism company.
Household income just short of $400,000 pa, which more than covered the payments on their $950,000 mortgage and their BMWs.
House was brought for $1.100,000,and the cars were a bargain at $99,000 each..Today neither have a job.
Second couple .Husband works as an engineer at AIR,while wife managers a trendy bar.House brought last year for $650,000 with a $350,000 mortgage,
Wife still owes $53,000 on her student loan.Today neither have a job.
Third couple.Made redundant last year spent their capital buying a motel at Blenheim.Leased, however cost them their life savings of $650,000.Brought at top of the market.Rental at present costing more than their revenue.Be lucky to just give away their lease.
Fourth couple.Husband a store manager with Smiths City,wife is due to have their first child.Mortgage repayments $600 pw..Now no job.
Every morning I read more and more people are losing their jobs.
It is like dropping a stone into a pool of water and watching the ripple effect.
I went through it in 1987 when I had a bookshop.Every day people coming and cancelling their magazine/art union ticket etc orders as they had lost their job.

[Beagle]

My Mum remembers the great depression she lived through as a young child. She was born in 1929 and her first memories were of how harsh life was in the 1930's as a very young child growing up in Gore Southland. I asked her yesterday what it was like. It was grim she said. There was no time to be a child. She had to help out with all sorts of tasks on the farm so the family could eat.

They grew sheep and cattle and everyone got coupons for essentials. Mum told me people made friends trading coupons. They had coupons for all the basics like flour, sugar, meat and so on but had enough meat so would trade their meat coupons for clothing coupons and so on. Many of the families cooperated in thsi way and strong and lifetime friendships were made from a community knitted together by the need to sup[port one another. The coupon system was the beginning of the welfare state started by Michael Savage which really kicked into gear in 1938. https://en.wikipedia.org/wiki/Michael_Joseph_Savage

Times were very tough through the war years too and right into the late 1940's. Mum left school at 14 to work full time on the farm as the men left for war.
My dad was in training for the army and left to fight the Japanese. The Japanese were reported to be going to fight to the last man standing so the Farwell ceremonies for the young men held in Southland before they boarded the ships were sombre affairs. Everyone knew there was a pretty good chance that a high percentage of the men leaving wouldn't come home.

Just before the ship Dad was on arrived to fight the Japanese the American's dropped "little boy" from Enola Gay https://www.youtube.com/watch?v=oZnRD3-Sg2I In an ironic twist if the first nuclear bomb wasn't dropped Dad may well have been killed in the fighting and I may not have have been born many years later after Dad arrived home.

Anyway...the reason for this lengthy tangent I have been on. We know nothing of the hardships of a real great depression that in effect combined with the effects of the second world war dragged on for more than a decade in New Zealand. It only lives on in the memories of our most senior citizens like my mother now in her 90's.
Lets just print endless money and dish it out willy-nilly...what could possibly go wrong....

[tommy_d]

the cars were a bargain at $99,000 each..Today neither have a job....
....

$350,000 mortgage,

i'm watching and waiting for a specific car make/model/year/price combo.

re the $350k mortgage, that's currently able to be fixed at $340 weekly for 30 years, so they should be alright (what's the dole for a couple?)

[Ggcc]

Lets think.
Young guy who is an airline pilot married his true love ,who is a marketing executive for a top tourism company.
Household income just short of $400,000 pa, which more than covered the payments on their $950,000 mortgage and their BMWs.
House was brought for $1.100,000,and the cars were a bargain at $99,000 each..Today neither have a job.
Second couple .Husband works as an engineer at AIR,while wife managers a trendy bar.House brought last year for $650,000 with a $350,000 mortgage,
Wife still owes $53,000 on her student loan.Today neither have a job.
Third couple.Made redundant last year spent their capital buying a motel at Blenheim.Leased, however cost them their life savings of $650,000.Brought at top of the market.Rental at present costing more than their revenue.Be lucky to just give away their lease.
Fourth couple.Husband a store manager with Smiths City,wife is due to have their first child.Mortgage repayments $600 pw..Now no job.
Every morning I read more and more people are losing their jobs.
It is like dropping a stone into a pool of water and watching the ripple effect.
I went through it in 1987 when I had a bookshop.Every day people coming and cancelling their magazine/art union ticket etc orders as they had lost their job.

This reminds me of many kiwis..... Glad I am one of the ones who saved their whole life and will pick up bargains off those who squander their money!!! This is where people get angry with how some wealth is obtained.

[Baa_Baa]

Having lost a fortune (relatively) twice, I have learnt the hard way that caring beats worrying. One must do what one must do to ease ones mind about their own circumstances, as best they can, however desperate it gets, then turn ones attention to empathy and care for those who cannot. Money isn’t everything and many here have nothing to personally worry about in any event. Try caring, it really works, it’s good for the cared for, and good for your mental health as well. Think carefully about what you care about and those who will benefit from your caring, then spread your lifetime of success around those who you really care about.

[moka]

i'm watching and waiting for a specific car make/model/year/price combo.

re the $350k mortgage, that's currently able to be fixed at $340 weekly for 30 years, so they should be alright (what's the dole for a couple?)

For a couple without children Jobseeker is $401.30, and then accommodation supplement depends on where you live $235 pw week for much of Auckland. The Work and Income website does not give the rates of accommodation supplement, but they are on the MSD website - hard to find unless you know what you are looking for. Found the rates here -
https://www.workandincome.govt.nz/map/deskfile/extra-help-information/accommodation-supplement-tables/jobseeker-support-current-01.html

AS is based on 4 areas, which are listed here. https://www.msd.govt.nz/about-msd-and-our-work/newsroom/2017/budget-2017.html.

[STONKS_ONLY_GO_UP]

I knew Beagle was a permabear but 18,000 people think so too?

Conclusion:
Buy calls

[winner69]

What bear ...markets must be approaching all time highs again

[Panda-NZ-]

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 ?

There is no limit, or rather it's more than you think it is. Monetary easing works better than the alternatives.

What is the real concern for "debt" you own yourself through the RB for under 1%?