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  1. #221
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Lizard View Post
    Though taking a whole-of-market point of view, it isn't possible for everyone to be getting in and out. Surely, over time, this behaviour contributes to more volatility, with moves becoming ever more dramatic and self-fulfilling until it becomes too fast to trade and reversal occurs (i.e. buy falls, sell rises)... although, perhaps more likely that it just reaches the point where large majority just put sharemarket in the too-hard basket and end up with lack of liquidity, wide spreads and barely a pulse?
    Ultimately that is what happens at the end of a secular bear market .... total lack of general interest ... boring boring ... all to hard ... and only the serious investors (not traders) are left to pick up the bargains

    Simplistic view and no doubt more traders / shorting / derivatives upset the norm (historical perspective) but you are about right with your prognosis

  2. #222
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    Quote Originally Posted by belgarion View Post
    At that time investing becomes very simple ... (at least for me) ... If solid stocks with histories of growing earnings have yields (or CG) beyond what I can get from a term deposit - I'm into the best ones. Its that simple IMNSHO and bugger whatever shorterm trends are saying.
    Ahhh but Belg at that time it won't be like today...this is a problem that investors have, they relate better yields tomorrow with todays perspective....sad to say it doesn't work like that...
    Secular bears have similar characteristics to its shorter term cyclic cousins. Remember the old saying for the cyclic bear market..."The bear market doesn't scare you out it wears you out". Now relate that saying to over a longer period of time. As Winner and Liz have pointed out by the end of a secular bear market there's very little investor interest .....it's likely they have all waited and waited for the market to fundamentally correct itself and have by now run out of patience watching those PE's sink to below 10 and nothing is happening and eventually they have had enough....It has become too hard to win in this market and they see easier and better opportunities elsewhere and they move to greener pastures lowering that demand/price relationship even more so.

    In the final stages of a secular bear market cycle history tells you that:
    Buying in Investor is very fussy and wants a much better return for their money than before. Investor frustration...cheap fundamentals underpriced shares with high yields low P/E 's but the market continually refuses to revalue them.
    Demand is down because the smart money is partying up large elsewhere and the rest are already in and waiting... money is tight ...so little demand, lack of momentum, lack of speculative opportunities, no interest ....yep boring.

    Thats OK I hear Belg say I have high quality high yielding stocks of 8% and I can wait

    It may not be OK...because the investment scene is different. In the final stage of a secular bear market cycle history has told us over and over again that there will be high inflation (double digit) ..raised cash interest rates.. high mortgage rates.. fiscal controls in place to control inflation, tighter money supply....etc

    Shares waxing and waning in price yielding 8% now doesn't sound like a very good investment anymore when you can get 10+% in the bank or buying into a rising property market...so even though the companies could be in a business cycle boom, the share price is likely to do a paradox and fail to rise so to produce a higher yield rate to increase buyer demand.....and the P/E's keep getting lower and lower.
    Last edited by Hoop; 14-09-2011 at 12:57 AM.

  3. #223
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    Investor Behaviour during a cyclic change ..an extreme view

    I admit this is a very very extreme example and the probably has a very low chance of happening ATM...but on a smaller level the behaviour is similiar.

    I have used this thread to illustrate the Group Investor Behaviour and the individual investors
    emotional response to a drop which they could not comprehend.
    After a period of rapid capital gains and a crash to correct ....individual investor confusion results when the market bounced back up returns to a cyclic Bull market but only to see it petered out prematurely turning downwards once again when a recovery is perceived to be just around the corner. These investors still have hope and their arguments are based around Fundamental analysis...technical analysis is ignored and why notas these Companies are making profits once again the stocks are giving large dividend yields...but the stocks are falling therefore stocks are undervalued....a chance to buy cheap shares...correct??? Yes.... perhaps it's just an extreme bull market correction...it has happened before.

    Adding to the confusion the Jekyll/Hyde media reporting investor unrest with major money worries at a country/global level with media releases from people "in the know" reporting we shouldn't fear as the worst is over...

    “The Government’s business is in sound condition.”Andrew W. Mellon, Secretary of the Treasury
    -December 5, 1929
    RESERVE BANK AREAS FORECAST NEW YEAR
    Despite the obvious slackening of the pace of business at the close of the year, leaders in banking and industry throughout the country maintain an optimistic attitude toward the prospects for 1930.
    -January 1, 1930

    MORTGAGE MONEY SCARCE
    -February 23, 1930
    “The worst is over without a doubt.”
    James J. Davis, Secretary of Labor.
    - June 1930
    ‘BUSINESS CYCLE’ SEEN AT NEW PHASE; Bankers Hold Downward Trend in Markets Indicates Recovery Is Near. DENY ANALOGY TO 1920-21 Economists Point to Superior Credit Conditions Now, Holding Easy Money Points to Revival.
    -July 6, 1930
    BIG BANKERS PUT UP $100,000 SAFEGUARD; House of Morgan Among Those Required to Provide Protection for Investors. -August 3, 1930
    “We have hit bottom and are on the upswing.”
    James J. Davis, Secretary of Labor.
    -October 10, 1930

    SCHWAB FORESEES RECORD PROSPERITY;
    -October 25, 1930
    “30% OF STOCKS SELL UNDER BOOK VALUES; Capital Is Above Market Price.”
    -December 14, 1930



    During the transition from Cyclic Bull to Bear Cycle ...no-one really knows the cycle has changed... many still think it is a bull market correction
    However as time moves on stocks fall on any bad news excuse... more and more investors begin to realise that a cyclic change is happening and those investors in denial resort to quoting reported Fundamental Analysis to keep their hopes and arguments alive.
    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The unnerving thing is that some of these 1930 problems seem rather similar to today's problems. This latest cyclic bull market is seemingly dying at a young age...and the Europe mess is increasing investment risk thereby pulling the stock prices down and raising yields atm

    Has there been a cyclic change recently???


    ...so far its a Yes and No answer Yes a bull to Bear shift to All Ords Shanghai Brazil Germany..and some others and No to USA Some of Europe, NZ...however all these indexes are in a bear tide ATM and any more drops will see some of these entering a cyclic shift as well.


  4. #224
    Speedy Az winner69's Avatar
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    Hoop - your PM box is FULL and needs a clean out if you want to get more messages

  5. #225
    Speedy Az winner69's Avatar
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    Might have to wait until Tuesday afternon for the real bargains

    (from Mauldins newsletter this week but seems widely quoted -

    "The Thursday/Monday Syndrome – We had suggested yesterday that we should probably explore the history of what old fogey traders refer to as the Thursday/Monday syndrome. While it would be pretensions to say that was prophetic, it was, to say the least, serendipitous, for yesterday's action looked like the perfect first step in a Thursday/Monday setup.

    "We had intended to give you a more thorough history of the syndrome with lots of analytical examples starting with the classic one – October 1929. Unfortunately, events are moving too fast this week, so we have neither the time nor space to wax poetic on the topic. So, you will just have to rely on my recollections of 50 years of watching markets and hundreds of nights studying market history.

    "The classic Thursday/Monday syndrome starts with the kind of action we saw yesterday. The markets open under pressure and selling accelerates in swelling volume. By early afternoon, there is a virtual stampede of selling. Then, later in the session, stocks stabilize a bit based on some reassurance. On Thursday, October 23, 1929, that reassurance came in the form of Richard Whitney bidding '205 for 10,000 steel' on behalf of the bankers' rescue pool. (Read a terrific account in the chapter 'The Crash' in Fredrick Lewis Allen's marvelous and essential 'Only Yesterday'.)

    "The action on Friday (and Saturday in the case of 1929) is uneven, often ending choppily steady or somewhat weaker.

    "Then on Monday, the trapdoor opens with liquidation and margin calls bringing tsunamis of selling.

    "Is that what's going to happen? Who knows? If it were that easy, kindergarten kids could do this. But chance favors the prepared mind. Old fogeys will guard against undue risk and exposure. Some may even get out a special shopping list. They will set their basket right, put in silly bids and hope some panicky soul throws a bargain in. Recall the story of the floor messenger boy, who, in 1929, according to legend, bought White Sewing Machine with his silly bid of one dollar when all other bids canceled.

    "One final note on the syndrome. Not infrequently, the Monday massacre spills over into Tuesday morning – a capitulation bottom in mid-morning resulting in a massive reversal to the upside."

  6. #226
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    I was just thinking yesterday that it was probably time for a "turnaround Tuesday" to rally into end of quarter and 7-10 days beyond.

  7. #227
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Lizard View Post
    I was just thinking yesterday that it was probably time for a "turnaround Tuesday" to rally into end of quarter and 7-10 days beyond.
    The trapdoor may have opened today .... good start to the day and a terrible ending to the day eh

    So does the big rally start tomorrow afternoon then?

    Watch this space

  8. #228
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    Quote Originally Posted by winner69 View Post
    The trapdoor may have opened today .... good start to the day and a terrible ending to the day eh

    So does the big rally start tomorrow afternoon then?

    Watch this space
    There goes that theory... I guess now that everybody's on to "turnaround Tuesday", they are all going to start buying Mondays...gosh, that's going to be hard on the Monday hangover crowd.

    And since we didn't get the proper reversal pattern, I suppose any rally is unlikely to get us much past another 280 points on the Dow. Kind of hardly worth attempting to trade for most of us.

    Someone mentioned yesterday to me that stockmarket apathy is rising, and I have to say that at a personal level it is becoming a bit of a conscious effort to stay interested.

  9. #229
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    Someone mentioned yesterday to me that stockmarket apathy is rising, and I have to say that at a personal level it is becoming a bit of a conscious effort to stay interested. Quote

    Yes indeed. May be this market is for late gratifiers and the patient - that is wishful thinking, why not. The activity on this website has reduced considerably, but mud throwing exercise continues unabated - will see less of that in a bull market! I can't wait for the next bull market, whenever it will be.

  10. #230
    Speedy Az winner69's Avatar
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    Quote Originally Posted by belgarion View Post
    You got that right! Capitulation in progress.
    How long does it take total capitulation to unfold Belg

    Methinks it is a longish process that slowly unfolds and not a process where one wakes up one day as says 'total capitulation'

    One measure is the few postings on ST these days eh .... appears as if many of the those who appeared to be newish to the market have given up .... leaving it to you, Liz (although she signing signs of weakness) and Hoop along the resource punters to hold the fort

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