sharetrader
Page 1 of 23 1234511 ... LastLast
Results 1 to 20 of 444
  1. #1
    CEO Butch Analytics Ltd winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    26,880

    Default Investing strategies and secular bear markets

    Essentially winner69 is a long term investor, ie wants to maximise long term returns) but also hates losing money

    Winner69 has a strategy:

    Since 2000 the underlying hypothesis about long term market conditions that drives my investment habits have been

    • The US market commenced a secular bear market period in 2000. This followed a secular bull market that run from 1982-1999
    • In a secular bear market long term returns are essentially zilch, even though there can be periods when the market can go up more than 20% in any one year.
    • Secular bear or bull markets have in the past averaged 13-14 years
    • By implication the NZ market is tied to these long term trends


    Winners investment strategy is:

    • Because long term market returns will probably be very low become a stock picker and pick long term growth prospects based on fundamentals.
    • As market sentiment is stronger than fundamentals and hope only hold stocks that are trending upwards. During times over real market weakness tighten up trailing stops (essentially the Phaedrus long term trading strategy)
    • To maximise returns while retaining some degree of diversification perferable number of stocks is 5, but no more than 10 at any one.
    • Don't worry about portfolio weights - because all stock picks will be trending up
    • Because I understand NZ and Autralia markets and economies restrict stock picks to these markets
    • Do not be embarassed to be 100% cashed up if necessary



    Whats happening now

    In December 1999 the DOW was 11497 - currently 12486 -- up 8.6% over the last 7 years is some effort eh .... see what I mean about a secular bear market .... about half way one through I guess.

    Since and inc 2000 the DOW has had 3 up years and 4 down years.... this year prob a down so the score is 3/5 ... see what I mean about a secular bear market

    The current downturn is only adjusting for the recent 'bull market' correction that occurs during secular bear markets - and this downturn is only 10% off a high so probably has a lot more to go

    Both the NZ and Aust markets have performed much better over the last few years and are currently valued at PEs seen at the highs of market valuations ..... nowhere where they end up at an end of a secular bear market.


    Result of all - as of today nearly cashed up .... and not embarassed at all
    Last edited by winner69; 11-02-2018 at 11:21 AM.

  2. #2
    Share Collector
    Join Date
    Mar 2005
    Location
    Porirua
    Posts
    3,866

    Default

    Out of interest, does the fact that you are now nearly fully cashed up mean that your existing stock picks did not meet your selective stock picking criteria? Or were they no longer trending up? Or have you sold stocks that met your criteria and are still in a long term uptrend, despite your plan?

  3. #3
    Guru
    Join Date
    Oct 2001
    Location
    chch, , New Zealand.
    Posts
    2,857

    Default

    Seeing as you recomended me a book the other day i shall return the favour Have you read the Agressive investor by Colin Nicholson? sounds as if you have a fairly similar strategy. Well worth the read

  4. #4
    Senior Member
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    1,146

    Default

    I believe we have been in a secular bear market, in general stocks, for the past six yrs as winner has stated.
    But if you dig a bit deeper you will find that commodities are negitively corellated to general stocks. When general stocks go into long term bear markets (15-20 yrs) commodities go into long term bull markets - Have a look at charts of the CRB index and the DOW from the late 60s to 1981. this pattern has repeated itself over and over for the last 200 yrs.

    Look at a chart of the CRB index since 2001
    Look at a chart of crude oil since 2001
    Look at a gold chart since 2001
    Look at any of the base metal charts since 2001
    Then have a look at a chart of the s&p 500

    Commodities are going up, general stocks are going sideways
    ,
    He who lives by the crystal ball soon learns to eat ground glass. (Edgar Fiedler)

  5. #5
    Member Heavy Metal's Avatar
    Join Date
    May 2006
    Location
    , , Australia.
    Posts
    138

    Default Skewed analysis

    Quote Originally Posted by winner69 View Post
    Whats happening now

    In December 1999 the DOW was 11497 - currently 12486 -- up 8.6% over the last 7 years is some effort eh .... see what I mean about a secular bear market .... about half way one through I guess.

    Since and inc 2000 the DOW has had 3 up years and 4 down years.... this year prob a down so the score is 3/5 ... see what I mean about a secular bear market

    The current downturn is only adjusting for the recent 'bull market' correction that occurs during secular bear markets - and this downturn is only 10% off a high so probably has a lot more to go

    Both the NZ and Aust markets have performed much better over the last few years and are currently valued at PEs seen at the highs of market valuations ..... nowhere where they end up at an end of a secular bear market.


    Result of all - as of today nearly cashed up .... and not embarassed at all
    In claiming we're still in a bear market you use a very convenient time frame to make that assumption. Using the same analogy gold has been in a secular bear market for the past 27 years - price still lower than in 1980, more down years than up.

    Three of the four down years occurred in 2000-02. That was a bear market. Since then the market has three out of four up years. That is a bull market.

    The Aust market is nowhere near a valuation high. Current PE of 13 is lower than the 15 year average.

    Being able to move to 100% cash might be easy and realistic and comforting for a small time investor, but if you have large sums of money invested across the asset classes (incl property), it is far more difficult to achieve this.

  6. #6
    Senior Member Halebop's Avatar
    Join Date
    Jun 2003
    Location
    New Zealand
    Posts
    1,237

    Default

    Quote Originally Posted by Heavy Metal View Post
    The Aust market is nowhere near a valuation high. Current PE of 13 is lower than the 15 year average.
    You've just committed the very same crime you accused W69 of.

    The Australian market is now made up of a quite different earnings mix thanks to a multi-commodity boom. This boom hasn't been in play for most of the last 15 years (Quite literally the opposite). On average the earnings of mining companies just don't get valued as much as the earnings of service companies because they are capital intensive and much more cyclical and much more volatile (i.e. in an uncertain world they represent a sector with one of the least amounts of certainty). So a quantitative measure of PE doesn't encompass the qualitative factors of earnings mix, sustainability and volatility. Have a look at service companies... insurers, retailers and the like and PE ratios are hardly enticing.

    ...and conversely even if we ignore the mining factor the overall PE might just be measuring the market's view of future earnings, future inflation and future discount rates.

  7. #7
    CEO Butch Analytics Ltd winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    26,880

    Default

    Quote Originally Posted by Heavy Metal View Post
    In claiming we're still in a bear market you use a very convenient time frame to make that assumption. Using the same analogy gold has been in a secular bear market for the past 27 years - price still lower than in 1980, more down years than up.

    .

    I would contend the secular bear market in gold you mention ended in mid 1999 ...... during that period gold went from $850 to $250

    Since then I would say in the early stages of a secular bull market ..... rising from that $250 to you never know ..... one of the characteristics of a secular bull market being that the bull market periods have greater gains than the bear market periods (like the years you mentioned)

    Anyway as with aspects of technical analysis (as this is what this) everything is open to interpretation. Like some might also say that that the secular bull market in US stocks that most say ended in 2000 is actually still in existence becuase new highs are being reached

    What you have pointed out about gold confirms what Mick pointed out - stocks and commodities always seem to go their opposite ways


    By the way your other point that closing positions can be difficult is true .... and this does to a certain extent eliminate many stocks as a possible trade if I keep the number of stocks held down to a preferred number of 5 with a max of 10 ..... even the biggest exposure I have had in this respect is that I managed to move a sizable parcel of TRS a few weeks ago without too much difficulty (prob sold a few of shares to Fisher funds over the years)

  8. #8
    Member Heavy Metal's Avatar
    Join Date
    May 2006
    Location
    , , Australia.
    Posts
    138

    Default Interpretation of secular bear market

    Yep interpretation is everything. One can choose the time period to validate their arguments.

    You say Dow is in a 7 year secular bear market, I say Dow is in a 4 year secular bull market after a 3 year bear market, some say gold in 27 year bear market, Dow in 25 year bull market etc etc.

    Interesting re TRS - great stock but very illiquid. No problem moving $10K worth but what if you bought $1M at IPO and/or accumulated $1M over the time since the IPO? Ditto housing, you have to wait months to try and sell if things go sour, or have a fire sale. And this correction has only lasted 4 weeks!!!

    Also interesting to compare this correction vs a similar credit crunch episode in 1998 (LTCM/Russian debt crisis). Market retreated 17% but recovered its losses within 5 months. The 1998 correction started around the same time of year too.

  9. #9
    Member
    Join Date
    Dec 2006
    Location
    waikato, , New Zealand.
    Posts
    63

    Question

    Can someone else interpret this???Does this indicate writer believes $US will continue down,gold goes up and DOW goes up????http://biz.yahoo.com/seekingalpha/07...5_id.html?.v=1
    living2

  10. #10
    Senior Member
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    1,146

    Default

    Quote Originally Posted by living2 View Post
    Can someone else interpret this???Does this indicate writer believes $US will continue down,gold goes up and DOW goes up????http://biz.yahoo.com/seekingalpha/07...5_id.html?.v=1
    I think he's saying that everything is going to depreciate against gold -USD, DOW, commodities. He say's even if prices of DOW etc keep increasing they will still depreciate against gold

    Although I agree with some of what he says, I'v become rather weary of the gold bug writers in general.
    .
    He who lives by the crystal ball soon learns to eat ground glass. (Edgar Fiedler)

  11. #11
    Member Heavy Metal's Avatar
    Join Date
    May 2006
    Location
    , , Australia.
    Posts
    138

    Default

    Quote Originally Posted by winner69 View Post
    Result of all - as of today nearly cashed up .... and not embarassed at all
    Perhaps not embarrassed but still playing catch up when the market quickly recovered and is making record highs.

    Those who saw this as just another correction in a bull market who bought more through the correction rather than panicked and sold in the insanity of mid August are sitting pretty and can take big profits at their leisure.

  12. #12
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    Quote Originally Posted by Heavy Metal View Post
    Perhaps not embarrassed but still playing catch up when the market quickly recovered and is making record highs.

    Those who saw this as just another correction in a bull market who bought more through the correction rather than panicked and sold in the insanity of mid August are sitting pretty and can take big profits at their leisure.
    Yes, I was lucky enough to act on Colin Twiggs analysis in August which forewarned the correction and sold down acordingly( just keeping some long term stuff) and then had cash to buy in at the correction. However I was a worried chappie for a while, because the ASX DOW FOOTSIE to which the NZX is running in near tandem with, were seeing their correction values at levels bordering the end of Bull market (phase 3). Seeing these values rise again don't not necessarily mean the BM(3) was still intact it could have been that the market had in fact started a bear market and the market was in wave A (the early signs of wave A is very hard to predict).
    My worries have eased slightly seeing the ASX reaching record highs (if only just).
    Colin Twiggs thinks the DOW will soon see the end of BM(3). As of today he gives the DOW 50% chance of entering another correction starting now (and the beginning of wave A?). Will the ASX and NZX follow?

    On a optimistic note many NZ stocks that topped out during Jan 2007 are looking (from a TA angle) as possible buys and energy stocks are positive.

    I am 25% cash at the moment but may raise this level by selling my stocks pointing south at the moment.

    With interest rates being where they are (7.5%) it is tempting to cash up more and leave it in my holding account (PIE status- Direct Broking)

  13. #13
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    I may sound like the prophet of Doom, but it seems more people are questioning the whereabouts of what stage of the sharemarket cycle we are presently in.

    An article today makes good reading. Kevin Armstrong, ANZ-National Bank's chief investment officer is worried where the Dow is heading. He thinks it could be heading not to a crash, but a more destructive loss of investor capital through a protracted bear market.

    Alan McChesney of NZ Asset Management (NZAM) is more optimistic. He thinks the sub prime crisis and the property market slump will have only a mild effect on the US economy so estimates a soft landing not a crash to occur. However he rates a year + long bear market as a 50/50 call.

    If the Dow is entering wave A, (there seems to be mounting evidence that this is going to happen if not already) my strategy as a NZ asset med/long term investor will be to cash up any of my stocks that start heading downwards in price, and not reinvest unless the stock is in a solid uptrend.
    In other words I will be tightening up my criteria to reinvest. I expect to be eventually holding more cash than shares.

  14. #14
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    Monday night/tuesay morning (NZ time) I might have a good idea which way the Dow is going to go (it is at crunch point at present) I think the Ords and NZX will follow the decision Wall St determines. Life could be bear. Ready to cash up my worst performing stocks.

    Protacted bear markets affect long term investors the hardest so I am using short/medium tactics now, to minimise capital losses.

  15. #15
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    Monday in USA been and gone and after a 100 down start the DOW finished only 5 points down.....so still none the wiser today.
    The Dow still remains at the watershed, so the Bull is still alive but looking sick.

    Colin Twiggs is negative, he expects another correction NOW of at least 10%. He wrote this as at 20th October, and has predicted the previous corrections before they happened.
    With the DOW breather today this may present an opportunity to exit some less performing NZX stocks today althogh with the Labour weekend holiday the NZX might be in catch up (down) mode this morning so perhaps wait until ASX opens may be prudent, depends on the NZX opening however as many investors still think it's good times down under.

    I think it is time to start departing the market, as the risk is now too high. Money in the DB trading account (PIE) at 7.5% is looking like a winning bet to me.

    As at now my portolio is Stocks 80% Cash 20%

  16. #16
    Member
    Join Date
    Mar 2006
    Location
    Auckland, New Zealand.
    Posts
    275

    Default Dow up 44.95 point s on Monday

    Quote Originally Posted by Hoop View Post
    Monday in USA been and gone and after a 100 down start the DOW finished only 5 points down.....
    I believe that the Dow finished 44.95 points up at 13,566.97 on Monday. Friday's close was 13,522.02.


  17. #17
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    Yes Deev..I tend to be rather slow in the mornings..it was a quick post and forgot about the day light saving effect..yes the Dow moved up quick in the end of trading and today it is 56 up at the moment to 13623.

    It needs to be above 14000 to break the resistence and lessen the downward correction risk.

    It's these secondary corrections coming out from the Dow which is causing problems to our markets.

    For us to predict the next correction, it makes sense to monitor the Dow very closely (as I am doing).

    Edit: another late end of session surge up 117 to 13684 since writing this post.
    Last edited by Hoop; 24-10-2007 at 09:14 AM.

  18. #18
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    The threat of a secondary correction from the DOW is easing. A good rise on friday to 13807 has to be seen as a positive move from the previous few days of hesitancy and intraday swings. Also the DOW has created a "floor" (resistance level) at 13500).
    I am more relaxed now than last week, and if the DOW stays above 13500 I will not be cashing up my worst performing NZX shares just yet.

    My Portfolio at Present
    AMP (topped up), BRY (singapore shares on negative watch), DFH (bought mid Oct2007), DPC (sold down, may now accumulate (on positive watch)), FBU, FPH (bought end July 2007), GPG (sold down, on negative watch), NZO (topped up), PRC (accumulating), RAK (accumulating)

    Watching
    NPX(ex share) CEN(ex share) MFT (ex share)
    Last edited by Hoop; 29-10-2007 at 11:03 AM.

  19. #19
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,175

    Default

    Dow failed to breach the 14000 upper resistance and is testing the 13500 support. This is the support line that I am watching... if it falls below the 13450 /13500 area it will be bearish and signal a possiblity of a secondary correction and the next resistence level down is 12800, (-5.5%). Below 12800 is bear territory and would signal the end of Bull Market 3.

    I am nervous again. The secondary correction risk has risen.

    Have added FBU to negative watch. Any correction will create FBU to break it's very long upward trendline.

  20. #20
    Senior Member
    Join Date
    Jul 2007
    Location
    North Shore
    Posts
    1,219

    Default

    FBU has to fall a long way to break the uptrend line - Phadreus has done a post over on the NZX forum. The resistance in the 1110s-1120s held up nicely today. If that had broken, FBU would have made a scary looking 6 month double top pattern.
    Disclaimer: Do not take my posts seriously. They are only opinions.

    AMR has sold all shares and is pursuing property.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •