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  1. #291
    Advanced Member Valuegrowth's Avatar
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    In some point NZmarket also will have correction. But we cannot predict 100% exactly when? I think it is time to think about some ideas of Peter Lynch.

    The SmartestThings Ever Said About Market Timing:

    WarrenBuffett

    • "The only value of stock forecasters is to make fortune-tellers look good."

    PeterLynch

    • "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.’
    • "I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it."

    CharlesEllis

    • "'Market timing' is unappealing to long-term investors

    BernardBaruch

    • "Only liars manage to always be out during bad times and in during good times."

    \Bull market can last for five years andsecular bull market can last for 25 years.
    A secular markettrend is a long-term trend that can lasts 5 to 25 years

    A secular bullmarket consists of larger bull markets and smaller bear markets.

    The United Statesstock market was described as being in a secular bull market from about 1983 to2007

    A secular bearmarket consists of smaller bull markets

    An example of asecular bear market was seen in gold during the period between January 1980 to June 1999

    During thisperiod the nominal gold price fell from a high of $850/oz to a low of $253/oz .[
    A bear market is a generaldecline in the stock market over a period of time
    A bear market followed the Wall Street Crash of 1929.

    My ideas arenot a recommendation to either buy or sell any security, commodity or currency.Please do your own research prior to making any investment decisions
    Last edited by Valuegrowth; 16-06-2013 at 10:41 PM. Reason: to amend sentence

  2. #292
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    I read in MarketWatch today an article 7 ways to spot a market top...not much help really but there was a Shillers PE Ratio Table listing various Countries which a I found of interest as long as you didn't read the dialogue..."Keep in mind, some markets are dirt cheap for a reason." ...I guess the Author meant Greece but no comment on USA ...so I'll add it "Keep in mind, some markets are expensive for a reason." (See the first table below.. I've jazzed it up a bit )

    Normally a Secular bull dies somewhere around the CAPE 25 area (see chart 2nd figure below))
    That 25 area sometimes doesn't work according to theory when the market gets irrationally overheated as was the case in 1929 and 2000 when the CAPE went to dizzy heights........Just to show how overly cooked the 2000 USA market was the Secular bear is now 13 years old and the CAPE has fallen only to around the area where previous Secular Bulls die.....As Secular markets are measured by distance and not by time this Secular Bear has still got some distance to travel...in actual fact is going the wrong way at the moment due to very low inflation.


    Interesting also are the CAPE for NZ and Australia (both in Secular bear cycles)...
    With NZ at 13, USA at 23 one might think therefore the USA market will take a bigger hit with the next downturn.....no, it doesn't work as simply as that.

    Winner...... Australia's 14 (assuming this figure is correct) down from 17 looks like a Secular Bear...eh?





    The NZX50 secular bear is tending down nicely as it should do in theory...Interesting to see the PE going down and the index going up.
    That happened in Aussi a few years back

    Last edited by Hoop; 23-06-2013 at 06:15 PM.

  3. #293
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    Another scenario Mr Hulbert ? ...How about Wall St having interest rates bouncing around on & off the bottom for another decade...(repeat of the 1940's decade)



    Mark Hulbert Archives | Email alerts
    July 31, 2013, 8:31 a.m. EDT

    P/E ratios to drop 20% in coming years


    Commentary: What history tells us about rising rate environments


    By Mark Hulbert, MarketWatch

    CHAPEL HILL, N.C. (MarketWatch) — We could very well be entering into a multi-decade period of much lower price-to-earnings (P/E) ratios.
    That, at least, is the conclusion that emerges from a very long-term perspective on the relationship between interest rates and P/E ratios. On average since 1871, it turns out, P/E ratios have averaged just 12.8 when long-term rates have been in a secular uptrend vs. 17.5 when those rates have been in a secular downtrend.

    This stark pattern emerged when I analyzed the historical database extending back to 1871 that is maintained by Yale University professor Robert Shiller. As you can see from the accompanying chart, there have been two fairly well-defined periods, each lasting two or more decades, in which long-term interest rates were in an uptrend.
    The first appears more modest on the chart, lasting from 1901 to the early 1920s. The second, which is far more dramatic, began in the early 1940s and lasted until 1981. And though it’s premature to declare that the rise in long-term rates over the last few months is the beginning of a third such multi-decade period, virtually everyone believes that the trend in rates over the next couple of decades is more likely to be closer to what we saw between the early 1940s and 1981 than what we have experienced since 1981.
    That’s why it’s so crucial for us to study those prior rising-rate environments to find out how they differed from the intervening periods in which interest rates were coming down. The differences summarized in the accompanying table are highly significant at the 95% confidence level that statisticians often use to conclude whether a pattern is genuine.
    When long-term interest rates were in... S&P 500’s average P/E ratio
    A major uptrend 12.8
    A major downtrend 17.5
    All periods since 1871 15.5
    There is a silver lining, however: Even though P/E ratios historically have been highly correlated with interest rates, no such correlation has existed between rates and the stock market itself: There has been no statistically significant difference between the S&P 500’s performance when interest rates were in a long-term uptrend than when they were in a downtrend.
    How can this be? The answer is that corporate earnings — on average — grew faster during periods of rising interest rates, more or less counteracting the dampening effect of lower P/E ratios.
    There is a catch, however: This silver lining is based on very long-term averages, and the transitions between periods of declining and rising rates can be messy and turbulent. Not all companies are able to thrive equally well in the face of rising rates, for example.
    Furthermore, many investors fail to appreciate the historical correlation between higher interest rates and faster profit growth, and unfairly punish stocks when interest rates begin to rise. We saw a taste of that in June, following Fed chairman Ben Bernanke’s mere suggestion that the Fed’s quantitative-easing program wouldn’t last forever.
    The bottom line? It’s a good bet that interest rates will be in a secular uptrend for many years, and we should be planning now how to respond. One possibility over the next year or two is a major bear market that causes P/E ratios to drop dramatically.
    Click here to inquire about subscriptions to the Hulbert Stock Newsletter Sentiment Index.
    Click here to learn more about the Hulbert Financial Digest.

    Mark Hulbert is the founder of Hulbert Financial Digest in Chapel Hill, N.C. He has been tracking the advice of more than 160 financial newsletters since 1980. Follow him on Twitter @MktwHulbert.
    Last edited by Hoop; 01-08-2013 at 09:39 AM.

  4. #294
    Advanced Member Valuegrowth's Avatar
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    I believe we will see at least 10% correction in global stock markets. Next month is very crucial. There may be life time opportunities in some markets and sectors and commodities. Even now there are opportunities in stock, commodity, currency and bond markets. They are not dead. Markets, commodities, stocks, properties and currencies never go straight up and down and never stay the same. There are cycles such as business cycles, economic cycles and industrial cycles etc. Just like human beings these assets also have personalities.

    Now some markets have come down due to panic situation and they have become more attractive. We should not forget USD was stagnated or went down against basket of currencies during last couple of years. Some wanted to dump the USD. Now it is one of the darlings in the market. Now USD has its day.

    Similarly we will see bull trend for some currencies including emerging currencies when we see next cycle. It is time to study positive affects of tapering rather than taking it negatively. Markets, financial systems, interest rates, policies never stay the same. There were so many hiccups and crises in the global markets in the fast. Still markets rebounded strongly. Tapering is not the end of the world. Actually some areas in the global economy will benefit lot after this tapering. It is time to identify coming bull sectors globally in developed, emerging and frontier world. In short tapering will bring sustainable development. This is good for mid and long term developments in all types of assets markets. Sooner we see tapering it is better.

    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

  5. #295
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    I believe some food and energy based commodities will outperform others in the short run due to new development in currency market, tapering and crisis in Syria.

    As I expected currently pull backs, corrections and volatility is taking place in all types of markets such as developed, emerging and frontiers markets. We may see volatility in commodity, stock and currency markets in the short run. Even if Syrian crisis and tapering postpone until 2015 still markets will readjust while having pullbacks, correction and volatility.

    There may be life time opportunities in some sectors globally for intelligent investors including contrarian intelligent investors. This is the time to look for undervalued consumer staples globally in emerging, developed and frontier world.

    During war period consumer staples and energy may do well. War is not good for consumer discretionary industries, airlines and finance etc.

    Remember in good and bad times people have to eat and drink. Even during world wars some sectors will outperform others. If I am correct In Iceland during their financial crisis their fish industry did well.

    Time to come Middle East counties will have to import more food products from western and Asian countries in the future due to short supply. Even Asia will struggle to product some food due to their large population and lack of arable land. Remember these people need more coffee, tea, coco, sugar, nuts, oil, gas, Boeing planes, some tech products, potatoes, meat, egg, fish, health products and other services in the coming two decades.

    Events such as short term political crisis and tapering create great opportunities. Actually tapering is very good for some sectors. Development in developed world means more opportunities for emerging world and frontier world. More economic activities in emerging world and frontier world means more opportunities for European and American companies such as Boeing, general electrical and some food companies. Some food companies have advantage over others due to their ability to get raw material easily and due to competitiveness where others will struggle to get some raw materials in the coming decades.

    Finally still stock markets, commodity markets and currency markets are not dead. We had two world wars, financial crisis, credit crisis, currency crisis and asset crisis etc in the past. Still we had some of the greatest bull markets all over the world. As I said before this is the time to identify next bullish markets, sectors, currencies, stocks commodities globally. We may find life time opportunities in emerging world, frontier world and developed world.

    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.

  6. #296
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    This is the time to make some vital adjustments globally. Now is not the time to run and hide and it is time to take some bold action.

    Actually tapering is good for some sectors globally. In addition different markets will benefits different sectors. For example emerging market and frontier markets including India will benefit their export sector and some commodity producers. Some Financial institutions in USA, Corporate Pension Funds, money market funds and some foreign markets etc should benefit from tapering. We need more study to identify clear winners in the market. Globally consumer staples sector may shine after tapering. I believe after tapering Money will flow back from gold, corn, soya bean and oil to other bull commodities and other bull stocks globally.

    Bull Sector hunting is a must now. We should avoid coming bear sectors, bear commodities and bear currencies and should identify bull sectors, bull commodities and bull currencies before others. USD will shine strongly from 2015 onwards.

    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.

  7. #297
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    I believe we may see strong rally in few more stocks markets just like Dubai, Japan and Philippine sooner than later. Dubai’s stock index climbed to the highest in almost five years. I heard even Jim Rogers is bullish on frontier markets such as North Korea and Myanmar.


    In Thailand 10-year government bonds had a rally as foreigners increased holdings. After big selloff, Indian stock market rebounded strongly. There may be few more hidden markets.


    As I said before it is time to identify next most bullish markets, sectors, stocks, commodities, currencies and other assets before others.


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

  8. #298
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    Theory says inflation is the primary driver of the stockmarket (Equity) cycle....so today's Chart of the Day I received in my email box is rather interesting to me...113year history of the DOW adjusted to inflation.

    When I align the two 113 year charts below (Crestmont Research and Chart of the Day) one can see the Secular Bull and Bear Market Cycles very clearly.

    Notice how the DOW has never in the last 113 years risen greatly above its tops when it's within a secular bear market cycle (red) and when this scenario is inflation adjusted it shows depreciating value.

    As the DOW is in the middle of a Secular Bear Cycle... the odds look excellent that the DOW can only go one way...inflation adjusted down!!!..

    But hey!!..this time is different..eh...


    References:
    http://www.chartoftheday.com/20131120.htm?H
    http://www.chartoftheday.com
    http://www.crestmontresearch.com

    Last edited by Hoop; 21-11-2013 at 09:10 AM.

  9. #299
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    Fascinating isn't it all hoop ....love your post

    So a much lower market scenario still on the cards?

  10. #300
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    Quote Originally Posted by winner69 View Post
    Fascinating isn't it all hoop ....love your post

    So a much lower market scenario still on the cards?
    An Open Letter to the FOMC: Recognizing the Valuation Bubble In Equities

    John Hussman's fund record has been under-performing due to his very bearish stance over the last couple of years......Is it that the market stays irrational just long enough for the perma-bears to become bullish? ..anyway ... It seems he won't be on Janet Yellen's Xmas card list this year

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