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  1. #281
    Speedy Az winner69's Avatar
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    While Hussman was on about the US markets it is relevant to the the NZ markets as well .... we prob also looking back half cycles as he put it .... see chart of NZX50

    When markets rise and fall in secular ways (multi year) most stocks go up or down (to varying degrees) with the market. Hence the theme all the way through this thread and the strategy I laid out on the first post.

    When markets are rising (multi year) a lot of the risk goes ... when markets are falling (multi year) it can be a very risky place. As you both point stock picking is the key and managing the risk that prevails at the time to protect capital ... and that means at times you may be out of the market altogether

  2. #282
    Advanced Member BIRMANBOY's Avatar
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    As I have pointed out ad nauseum...IMO charts are only usefull in trying to figure out what happened on a historical basis. There is no guarantee that we are due for a drop just because we are at a high. There would be a more than reasonable chance that it might.. but that alone shouldnt drive buying or selling. Chartists look for signals tiggered by volume, SP previous history etc. etc. I understand that I just cant buy into the "the charts dont lie" philosophy. As we have said, and you agree, stock picking is the key. The BEST time to be in the market for me is when its in the sh***er....you say its a risky place then..different strokes as they say. SInce I only buy to hold and for dividends...I am never "out of market"...its just that buying opportunities are fewer and the cash just waits for suitable situation.....must go TEL is requesting my contribution.
    Quote Originally Posted by winner69 View Post
    While Hussman was on about the US markets it is relevant to the the NZ markets as well .... we prob also looking back half cycles as he put it .... see chart of NZX50

    When markets rise and fall in secular ways (multi year) most stocks go up or down (to varying degrees) with the market. Hence the theme all the way through this thread and the strategy I laid out on the first post.

    When markets are rising (multi year) a lot of the risk goes ... when markets are falling (multi year) it can be a very risky place. As you both point stock picking is the key and managing the risk that prevails at the time to protect capital ... and that means at times you may be out of the market altogether

  3. #283
    Speedy Az winner69's Avatar
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    birman that chart doesn't say the world is about to collapse in NZ .... it confirms what Hussman was saying that some punters only see half the cycle and they only see the NZX50 more than doubling in the last few years .... and prob believe it will double again in the next few years (no bargains for you) .... and that might be foolish thinking eh

    Funny thing is birman we esssentially have the same philosophy .... pick good companies and collect the divies .... the only difference between you and me seems to be that i cherish my capital and if markets look like going down 50% I'll cash up when one of few holdings starts going down with the market and if they re still fundamentally good will buy them back ... like you say a cheaper price.

  4. #284
    Advanced Member BIRMANBOY's Avatar
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    I have been tempted to micromanage my shares but dont want to be buying in and out because I dont trust myself to know when its emotionally, caffeine, genuine or herd driven drivers. Also I dont want to worry about the IRD interpretation of my actions. Whats interesting is that long term holders and divie devotees benefit from traders and chartists because they drive the SP up and down thereby creating opportunities and vice versa with the holders providing some measure of stability and acting as a counterbalance that would occur if everyone was trading in and out like yoyo's. Vive le difference eh? But long may our divies prosper.
    Quote Originally Posted by winner69 View Post
    birman that chart doesn't say the world is about to collapse in NZ .... it confirms what Hussman was saying that some punters only see half the cycle and they only see the NZX50 more than doubling in the last few years .... and prob believe it will double again in the next few years (no bargains for you) .... and that might be foolish thinking eh

    Funny thing is birman we esssentially have the same philosophy .... pick good companies and collect the divies .... the only difference between you and me seems to be that i cherish my capital and if markets look like going down 50% I'll cash up when one of few holdings starts going down with the market and if they re still fundamentally good will buy them back ... like you say a cheaper price.

  5. #285
    Speedy Az winner69's Avatar
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    Birman we should never forget this from hoops post

    The key point is that over that timeframe dividends have accounted for 70% of the total annualized real return to investors. Price appreciation added the other 30%.


    In nz I would say the 70% ratio is higher

    Sort of says traders don't win much ...... research shows nearly 100% of day traders end up losing anyway .... except those on sharetrader

  6. #286
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    Quote Originally Posted by David B View Post
    Although it does pertain to the US, Alan Greenspan thinks basically the same about the US stock market as Brian Gaynor thinks about the NZ one. He [Greenspan] considers US stocks are still cheap (based on historical metrics) and the current lift in the markets over there is far from the irrational exuberance that was seen during the dotcom and previous share market excesses. Given our markets tend to broadly follow the US markets, I find that very interesting.

    http://www.cnbc.com/id/100556999

    It would appear to me that those who have brought into US stocks (the good companies that is) between 2009-2012 have had a once in a generation opportunity to make some serious wealth going forward.
    When a high profiler chips in with his/her opinions of where the market is ...do you add extra weight to the belief that they are right?

    Allan Greenspan quotes
    ".... stocks by historical standards are "significantly undervalued" even considering the recent moves higher...." (Greenspan said in a "Squawk Box" interview)
    Greenspan coined the phrase "irrational exuberance" in 1996, when he was asked a question about soaring stocks at that time. The year 1996 was coincidentally the last time the Dow Jones Industrial Average had its last 10-session winning streak. Blue-chips will try to make it 11 in a row on Friday. That would be the first such run since late 1991 into 1992. "...Although blue-chip stocks are hitting all-time high after all-time high, former Fed Chairman Alan Greenspan told CNBC Friday that "irrational exuberance" is the last term he'd use to describe today's market..."

    Hoop thinks the 87 year old has missed adding some important factors in forming his opinion.......How dare you say that about an expert a private advisor and consultant to many companies I hear you say...

    Hmmm...I would assume I'm in good company if one thinks things through using the inter-reactions of various Market Analyses ..........Yeah there's no "irrational exuberance" now but that's only a small factor within the overall picture...
    The bigger picture is long range and the fact that Wall St is still getting over that massive "turn of the Century" Equity bubble ,,,,.a historic record event

    Many people forget over time... so there's problem now that many perceive when they look at the historic PE Ratio Fundamental the fact that historically the markets are just above fair value so they assume that there is no reason for the market to turn down yet. Therefore applying the reasoning that Wall St should keep going up until it reaches a fundamental cause for it to turn such as the well overvalued (irrational) limit.

    I consider the above as simplistic flawed logic.....

    Why?? ...One has to take in the environment surrounding of the Present Day market. As of 31 December 2012 when the S&P500 was at 1426 Crestmont Research considered it to be "fairly valued" it noted the unusually high annualised PE Ratio (20.9) for the time the secular bear market has been in operation, but found that it was still within acceptable range due to the historic low inflation/low interest rate environment.
    Sounds good ..eh?
    Unfortunately... there are other factors in play ..the very important SECULAR factors which many analysis too busy concentrating on the "now" forgetting or thinking these long range effects don't apply.................. The often ignored effect is Wall ST being in a secular bear cycle, a long period of time when the PE Ratio trends downwards, therefore averaging out historic PE Ratios and compare with today's situation is the wrong analysis to use.
    Unfortunately... we all want the economy to come right..when it does the low inflation/low interest rates environment will disappear thereby making the adjusted PE Ratio of 20+ in a 13yr Secular bear duration period well overvalued.
    Unfortunately ...Wall St has experienced record earnings growth during 2009/2012 which is considered unsustainable....

    This does not spell disaster as the E in PE is expected still grow but at a reduced rate and investors take a view that when the economy booms again they perceive there will be earnings growth... but will this growth be enough to push the S&P500 upwards 1600+ with the secular pressures pushing down the Annualised PE Ratio...

    The Chart from Crestmont Research does not paint as rosy a picture that Greenspans opinion does.

    That 2000 bubble is still degassing but with the 2007/2008 GFC the FED has been pumping air back into it...creating a low inflation/low interest and forcing the secular bear to hibernate....The FED is hoping that buying time will help the market create enough earnings, cushion the negative effects and ride it out until the economic cycle upturns...and the cyclic extreme bumps smoothed out somewhat)

    Crestmont Researchers describe Secular cycles as distance dependent and not time dependent...thereby the end of this Secular Bear cycle is the distance it takes for the annualised PE RATIO to get to below 10 before rising up again...Looking at the time aspect.. if the secular bear dies now then it would take a crash with the S&P500 going back to below 750 to end it...as this scenario seems unlikely it would be safer to assume that this Secular Bear could be alive for a number of years yet, with the future increasing earnings not pushing the S&P500 much higher but more likely to soften the next downward effect...but don't ignore the likelihood of another cyclic bear and maybe another bull and bear cycle to occur before this Secular Bear dies.

    Conclusion :......It would not necessarily take irrational exuberance, nor a drop of Earnings growth, to create the next Wall St cyclic bear market...the biggest threat would be the changing environment from the record low low inflation/low interest rate scenario back up towards "normal" without high earnings growth..thereby putting pressure to lower the PE Ratio, and awakening the secular bear from its hibernation... The Wall St Secular Bear will eventually awaken...when and what will cause it to happen is not yet apparent.

    Last edited by Hoop; 17-03-2013 at 02:02 PM.

  7. #287
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    What happens long term when a market overreacts and gets to ridiculous highs?...Do we end up with a 5 year trading range as the Market recovers from it's
    crazy high then low

    If history repeats itself then the 1987 aftermath has occurred again in 2007 on the Aussie Market.

    In 1987 the cyclic bull overstepped it's channel bounds..
    In 2007 the cyclic bull grossly overstepped the secular bear's characteristic flat tops (shaded area)

    So should we expect the inverse Head & Shoulder to form with a bottom form at around the 4300 area ...and then a long period of good times "up up and away" starting in late 2014 ??????????

    Predictions are made so that they can proven wrong which happens most of the time

    Last edited by Hoop; 16-06-2013 at 04:22 PM.

  8. #288
    Advanced Member Valuegrowth's Avatar
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    Hoop I also think next market cycle can start from late 2014 or beginning of 2015.

    Next year is very crucial for global markets.

    We cannot expect strong Australian economy over the next 18 months to two years. Probably Australian market can slow down during next 18 months.

    Both Australian dollar and New Zealand dollar could fall to a level not seen in about three years in the next few months.

    In June 1998, Australia's economy was growing at 3.9 per cent and, yet the Aussie dollar could buy only US58.

    In mid-June 2006, the Aussie dollar traded at US73¢. During this time government had surpluses, unemployment was low and we had an equities boom.

    Australia didn't undergo a recession during the global financial crisis. Growth is now slowing sharply. GDP grew 0.5% in the first quarter and is expected to rise less than 1% over the next year.

    The peaking oft he mining cycle also will affect Australian economy. I believe at least three, and possibly four, more cuts are coming over the next six to eight months.

    However there will be opportunities in some sectors in Australia and New Zealand even in the current challenging climate.


    By end of next year we will be able to get some assessment on global economy trend including Chinese economy.

    It is time to study market cycles, next most bullish stocks, commodities, sectors and markets and take positions accordingly.

    My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

  9. #289
    Speedy Az winner69's Avatar
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    Predictions are made so that they can proven wrong which happens most of the time

    But economists are wrong most of the time ..... moosie believes what they say so this time may be different

    http://www.mauldineconomics.com/fron...aign=frontline

  10. #290
    Advanced Member Valuegrowth's Avatar
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    Winner69 the legend I completely agree with you. Yes nobody cannot predict 100% correctly.

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