Investing strategies and secular bear markets

[h2so4]

It's October next week

Lets hope depressed stocks and big dividends put a floor under this capitulation.

[Lizard]

So own up! Which of you b#gger took out those MHI sellers? I was planning to do it this morning and one of you beat me too it. Not pleased at at all. Very ungentlemanly behaviour.

Teach you to go pump it on the forum, belg... you know you are probably attracting a big following these days, now that you're one of the few people on ST that can still be followed IN rather than OUT. Wasn't me though.

[Lizard]

Teach you to go pump it on the forum, belg... you know you are probably attracting a big following these days, now that you're one of the few people on ST that can still be followed IN rather than OUT. Wasn't me though.

I actually did buy a few things this week. The broker said "you're brave", so that made me happy. I think he has said that to me about 3 or 4 times over the years, and every time, when I looked back, I wished I'd bought more...

Old habits die hard though. When it comes to investing, patterns only seem to form in time to be contradicted. Most of my cash still stayed in the bank.

[Lizard]

I didn't mean to imply that most of my money was in the bank - it is pretty much back in balance for now - not overweight or underweight too much at all, although I'm having yet another dilemma over whether to reduce NZ property trusts. It was just that, on past history, the "you're brave" comment suggests that if I truly was brave, I would go overweight equities for now.

However, on consideration, I will have to leave that to you, Belg. I'd rather stay married.

[Jay]

I'll admit to taking a few (emphasis on a few) out @ 81 (MHI) to top up my existing holding - especialy with the dividend record date today

[h2so4]

The upside down pyramids of Auckland must be becoming quite a tourist attraction.

[Jay]

Water- My pryamid is the right way up - my original buy price is a lot lower.

[h2so4]

Water- My pryamid is the right way up - my original buy price is a lot lower.

You must have one of the ancient ones.

[Hoop]

I nice easy read to understand the comparisions of 2 secular bear cycles on the SPX.... the 1966 - 1982 and the 2000 - 20?? and its cyclic bull and bear cycles within those 2 secular cycles. ,,,
...so...is this latest (2009 -201?) SPX cyclic bull market dead??? Adam Hamilton reckons not yet (Note this article was written 5 months ago)

http://zealllc.com/2011/newbear.htm

However John Hussman thinks differently...also look half-way down his article ...there is a colourful box of statistics on the past duration time periods of cyclic bulls and the percentage increase of each...Ok the Bull duration is about average but the percentage increase was above average...so maybe the Bull is dying (Note this article was written 6 months ago)

http://www.hussman.net/wmc/wmc110516.htm

[Hoop]

A follow up to the above articles....

We all know crystal ball gazing is a dangerous sport....however analysing past events normally keeps you on a solid footing...hmmm sometimes though writers come unglued but this time it only shows human behavioural thinking at a time of a economic recovery

I find it a valuable exercise to go back to past history and re-read these types of articles and find out what went wrong.

George Boubouras, author of 5 reasons why shares will rally in 2011 will probably wished he never wrote this article on the ASX.com site back in December 2010.

His article showed all the charts etc and looked real good and well researched so what happened when he expected the AllOrds to be at 5600 by now. I wonder if that environment of the time affected his reasoning....seeing an economic recovery in progress it is tempting to add today's variable into a tomorrows assumption....a mistake we see or hear a thousand times each day.

I can see George now saying that the current economic environment is worse now than I expected ..yes correct... it is obviously much worse than then and the market has corrected itself according...but was Georges expectations back in December 2010 set too high..Could this had been picked up as a fault at the time of writing...In hindsight we can safely say yes.......Hmmmm..hindsight..

However ... past history is scattered with over and under expectations and these are factored into secular behaviour.......ahhhh I hear George say when someone tells him that he forgot to add this secular factor into his crystal Ball gazing. Yes no hindsight to blame here..this should have been picked up at the time of writing.

Ok...to save making this post even bigger that readers will turn off ..lets use only one secular example in a diagram he mentioned.

Chart 2: Australian equity valuations well below long-term average.....

How many times have I heard a Fundie say that the stock prices are well undervalued...(remember this Article was written in December 2010 when the ASX was uptrending past 4900)..... Now the shares today are cheaper at 4100 and downtrending and company profits are still up there where they were back in 2010...so its even cheaper now???...Markets crazy or what???

People tell me ..."why carry on about secular cycles when investing in the present time? whats the point??"...Well..the point is the pure example below

No the ASX200 is not crazy.... in reality, back in Dec 2010 the stocks were very overvalued!!!! not undervalued as George writes....The ASX200 is in a secular bear cycle and as such that market will operate below that PE long term average of 15 and the PE will keep falling probably to 8 or less before that Secular Cycle changes back to Bull and the PE ratio will then uptrend.

His chart has ASX200 looking very undervalued



His chart amended by me to allow for the ASX200 Secular Bear market Status...notice that his last orange ring showing "Valuations simply discounted too agressively" now looks like they weren't....looks very different now...eh? This chart shows ASX200 was still a little overvalued back then.