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[QUOTE=SBQ;813190]There is no disconnect. The reality is those with $ are sick with holding cash in the bank account. Low interest rates = only fools hold cash in the bank account for long periods of time. I know specifically those that accumulated cash reserves in the short term for the sole intention to buy equities. This is apparently in Warren Buffet's recent annual meeting where they said for the individual, holding gov't bonds that pay insane low interest rates - what does that mean when you factor inflation? Look at the 10 year bond rates?
Investors are looking out for the longer term. They see people WILL go back to shopping, go to dining, go on travels, just like before. Why? Because like previous pandemics, they not permanent and human innovation always trumps fear. Vaccines will aid in getting out of the COVID19 transistion.[/QUOTE
Just because investors need to park funds somewhere does not necessarily make the stock market a good idea.
The long term investments you are referring to, first need to give a positive return.
How do you think these businesses are going to prosper in this current environment.
In case you haven't noticed the US economy is on the brink of meltdown.
Last edited by ynot; 06-05-2020 at 08:20 PM.
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i think the banks lose by the numbers getting smaller overall , their spread has to shrink.
But more importantly I think there IS a free lunch with negative interest rates. I am not sure if its logical or not but the way I see it the banks are going to hold off as much as possible applying negative rates to their retail customers. Because those customers will be elastic. If a bloke cant get something on his $100k for 3 months he's not going to leave it there except at the most baddest of times. But the RBNZ (once Orr sorts his business out) will apply increasingly negative rates to the banks and so retail banking will get squeezed bigtime as the industry works on both sides of the ZERO line.
(Was thinking I was in the banking stocks thread lol) your fault W69
Last edited by peat; 06-05-2020 at 08:02 PM.
For clarity, nothing I say is advice....
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Originally Posted by SBQ
There is no disconnect. The reality is those with $ are sick with holding cash in the bank account. Low interest rates = only fools hold cash in the bank account for long periods of time. I know specifically those that accumulated cash reserves in the short term for the sole intention to buy equities. This is apparently in Warren Buffet's recent annual meeting where they said for the individual, holding gov't bonds that pay insane low interest rates - what does that mean when you factor inflation? Look at the 10 year bond rates?
Investors are looking out for the longer term. They see people WILL go back to shopping, go to dining, go on travels, just like before. Why? Because like previous pandemics, they not permanent and human innovation always trumps fear. Vaccines will aid in getting out of the COVID19 transistion.
Which year will a reliable vaccine be widely available in N.Z. and in the meantime ? Think about it...
You're trying to put words into my mouth. At no point did I say I intended to hold cash for a long period of time. I sold out of most of my shares in February 2020 and I am very pleased I did. I think there's a whole new generation of investors that have only ever known a bull market, and from your response I would think it appears you're one of them. Cash in the bank earning 2.5% on term deposit for 2020 will look like a really great return if the whole market tanks 30% and we get asset price deflation.
Last edited by Beagle; 06-05-2020 at 08:32 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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Originally Posted by SBQ
There is no disconnect. The reality is those with $ are sick with holding cash in the bank account. Low interest rates = only fools hold cash in the bank account for long periods of time... Investors are looking out for the longer term.
I can see several disconnects, not least forward PE & cancelled dividends v's present market valuation.
But I think what you're saying is that over the long term, shares beat those paltry interest rates hands down, so just close your eyes tight and we'll get through this eventually. Which is likely correct, although it may take a while.
However, if you choose to manage your investments a little more proactively, side-stepping an obvious drop might be a smart move in situations like this.
AIR.NZ is a good example here: many shareholders dropped them like a hot potato. Others wish they had. How long before those shares recover from the Covid transition?
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Originally Posted by Beagle
Cash in the bank earning 2.5% on term deposit for 2020 will look like a really great return if the whole market tanks 30% and we get asset price deflation.
You mean with the govt earning 1%
There we go cherry picking again
I have decided to post my prediction for the SP500 in this thread
here it is with the yellow lines being the future as I see it most likely.
Attachment 11502
So that is for the Daily
here is the one for the shorter term. Note that in this case the dotted line were drawn earlier so it is already tracking kind of on target
Attachment 11503
It is good to put it out there and be judged haha
they are both the same pattern of course - a bearish gartley - over different time frames. If they both go to plan then towards the end it will be a mighty fall and should hit the old lows at least maybe a lot more, who knows.
And that last phrase is the most important thing I've said. lol
Last edited by peat; 06-05-2020 at 09:21 PM.
For clarity, nothing I say is advice....
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Originally Posted by Beagle
Which year will a reliable vaccine be widely available in N.Z. and in the meantime ? Think about it...
You're trying to put words into my mouth. At no point did I say I intended to hold cash for a long period of time. I sold out of most of my shares in February 2020 and I am very pleased I did. I think there's a whole new generation of investors that have only ever known a bull market, and from your response I would think it appears you're one of them. Cash in the bank earning 2.5% on term deposit for 2020 will look like a really great return if the whole market tanks 30% and we get asset price deflation.
Interesting you mention that. From Sharesies today:
Sharesies stats
Sometimes it's easy to get caught up in short-term gains, and we forget to take time to focus on how much things can grow over longer periods of time—kind of like investing for the long-term!
So we thought we'd share a bit of a reflection on the last year.
6 May 2019:
• 43,000 investors
• $13.8m invested through Sharesies
6 May 2020:
• 146,000+ investors
• $370m+ invested through Sharesies
We're blown away, to say the least
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Originally Posted by peat
You mean with the govt earning 1%
There we go cherry picking again
I have decided to post my prediction for the SP500 in this thread
here it is with the yellow lines being the future as I see it most likely.
Attachment 11502
So that is for the Daily
here is the one for the shorter term. Note that in this case the dotted line were drawn earlier so it is already tracking kind of on target
Attachment 11503
It is good to put it out there and be judged haha
they are both the same pattern of course - a bearish gartley - over different time frames. If they both go to plan then towards the end it will be a mighty fall and should hit the old lows at least maybe a lot more, who knows.
And that last phrase is the most important thing I've said. lol
Pretty meaningless to me Peat.Can you put your prediction in words and over what timeframes would be useful , thanks. I think we are in for more downers but if NZ and Aus successfully form a bubble together without 2nd waves and our food and logs etc keep being wanted by the world, maybe Aus and NZ will separate a little from other mkts. And be great if Aussies come over for the ski season.Aussies make up what 20-25% of our tourists and kiwis re 40-45%? kiwis will have to retrain and work on farms and replace the what 8,000 foreign workers at Queenstown etc. We are going to have to adjust and be flexible in this new emerging world. There thats a maybe positive outlook.
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Originally Posted by Joshuatree
Pretty meaningless to me Peat.Can you put your prediction in words and over what timeframes would be useful , thanks. I
Down to 2600 on the SP500 over the next few weeks then up to 3100 during the month after that and then DOWN HARD AND FAST so maybe the fall will occur in June which will mean sell in May and go away can be right one more time.
For clarity, nothing I say is advice....
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[QUOTE=ynot;813193]
Originally Posted by SBQ
There is no disconnect. The reality is those with $ are sick with holding cash in the bank account. Low interest rates = only fools hold cash in the bank account for long periods of time. I know specifically those that accumulated cash reserves in the short term for the sole intention to buy equities. This is apparently in Warren Buffet's recent annual meeting where they said for the individual, holding gov't bonds that pay insane low interest rates - what does that mean when you factor inflation? Look at the 10 year bond rates?
Investors are looking out for the longer term. They see people WILL go back to shopping, go to dining, go on travels, just like before. Why? Because like previous pandemics, they not permanent and human innovation always trumps fear. Vaccines will aid in getting out of the COVID19 transistion.[/QUOTE
Just because investors need to park funds somewhere does not necessarily make the stock market a good idea.
The long term investments you are referring to, first need to give a positive return.
How do you think these businesses are going to prosper in this current environment.
In case you haven't noticed the US economy is on the brink of meltdown.
I'm not buying it. Let me show you 2 links:
https://static.seekingalpha.com/uplo...ons2-hires.png
and recently Buffet's response: 'Never Bet Against America'
https://www.investopedia.com/5-takea...eeting-4843875
I don't know about you or most of the people on this forum but Buffet's words should mean a lot more than any other NZ based financial advisor or critic.
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Nothing against Buffett but he has just bet against America. He has had 2nd thoughts and sold out of Airlines. Thats about as big a warning as he can give us.And im not going near ETFs at this point unless they are negatively related to the mkt.
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