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  1. #11
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    Default Smell that coffee, ouch

    Shares slump on recession fears

    London saw its biggest one day fall since August

    European and US shares have fallen sharply as poor US retail sales figures and Citigroup's first quarterly loss added to fears of a US recession.
    In London the FTSE 100 index of leading shares slumped by more than 3% - its biggest one-day fall since the height of the credit crunch in August.
    Meanwhile France's Cac 40 index lost 2.8% while Germany's Dax slid 2.1%.
    Sales in US shops fell by 0.4% in December from a year earlier, as consumers tightened their belts.
    And Citigroup, the giant US banking firm, reported a $9.83bn (£5bn) net loss for the last three months of 2007, taking its total writedowns as a result of exposure to sub-prime loans to $18bn.
    "The losses at Citigroup - whilst fully expected - still seem to be unsettling traders across the Atlantic, whilst at the same time the lacklustre US retail sales figures are confirming that the economy is slowing," said CMC Markets trader Jimmy Yates.
    Gloomy
    The FTSE 100 ended 190.1 points lower at 6,025.6 - wiping more than $45bn off the value of London's leading companies.
    It has lost 7% since the beginning of the year as the US economic situation continues to unravel. Meanwhile the Paris index ended 151.8 points down at 5,251.7, while Frankfurt's Dax closed 165 points lower at 7,566.4. And on Wall Street, the gloomy data hit key markets with the Dow Jones falling 1.6%, or 208 points, at 12,570 while the tech-heavy Nasdaq shed 2,426.4.

  2. #12
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    US job starts are down - ours are up, infact there is talk of a Labor shortage.
    US house starts are down- ours are up.
    Many US companies rely heavily on a US market- we do not.
    Our consumer spending and demand are up, not down as in the US.
    Our trade deficit just narrowed, based on increased ore exports.
    Our interest rates are increasing not decreasing.
    Our growth is a lot stronger than in the US.

    Our market's and economy's ties to the US are largely- not entirely, but largely, irrational.

  3. #13
    Senior Member upside_umop's Avatar
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    Default

    I guess your talking of Australia?

    Frankly, the US are the worlds largest deficit spenders...any decline in their spending affects the lenders/exporters from other countries, which basically means they're not as wealthy, in turn dont consume as much themselves...this has the 'flow on effect' to every other nation in the world.

    To think China and India can keep the world on steady economic growth is a little bit of wishful thinking.
    By the way - it's upside_down, not upside_umop

  4. #14
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    fair post ginshu.
    if you are in speculative investments, then time to reconsider.
    otherwise, play on...
    the world is not falling apart. but PE's are.

    good times. now is the time to be eyeing quality companies with excellent prospects and track records of delivering. if they get knocked off, then get stuck into them. you dont get these opportunities very often.
    Last edited by The Big Ease; 16-01-2008 at 10:35 AM.

  5. #15
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    Default

    Quote Originally Posted by The Big Ease View Post
    fair post ginshu.
    if you are in speculative investments, then time to reconsider.
    otherwise, play on...
    [b]the world is not falling apart. but PE's are.[b/]

    good times. now is the time to be eyeing quality companies with excellent prospects and track records of delivering. if they get knocked off, then get stuck into them. you dont get these opportunities very often.
    I agree, the world is clearly NOT falling apart.

    But the financial markets ARE, and in my opinion, will continue to do so until the rot and financial hocus-pocus is removed.

    Tangible assets and well managed, sound businesses will always have value.

    My opinion is that the value of tangible assets and well managed sound businesses will reset lower in coming years.

    I can't help but recall Warren Buffett referring to an airline(usually a horrible investment) In the United States in the 70's selling for LESS THAN the cost of only FOUR airliners in the company fleet.

    Maybe I'm too conservative, but I've focused on debt elimination, building cash(or cash-like) reserves, slashing costs, and focusing on cashflow until the dust settles(which I think could be a fair few years yet).

    When solid companies likely to still exist in 50 years time are selling at firesale prices like in the 70's I'll dive in head first, but for now, I think cash(or cash-like) is king.

    The only thing I'll even consider buying in the short-term on a dip would be energy, PMs, and maybe Ebay.....the world's biggest pawn shop.

  6. #16
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    Guys, US is in recession....I'm seeing it here. FED is between a rock and a hard place if they cut i-rates dollar collapse will follow and feed commodity price inflation. PPI was 6.3% for 2007, I bet CPI will be shocker tomorrow (core CPT excluding energy and food!) FED are frozen with risk of price inflation.

    We have classic 70's style recession with inflation.
    The trend is your friend.

  7. #17
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    I am mostly out the market and expect to remain so for the remainder of 2008. I think America will crash bringing our markets down to much lower points than they are now. I see the ASX being in negative territory for the year 2008 with a big crash or a series of minor corrections whatever, i wont be investing until the market shows a clear TA uptrend.
    Its much safer sitting it on the outside in times like this. Macdunk

  8. #18
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    Dear all

    If you could invest in a healthcare company with a fwd p/e of 6x and EPS growth of 100%.

    Is that a company to sell, just coz the market is falling? No

    The market is like a giant pendulum with values swinging from over to under valued all the time.


    Instead of seeing "Market crashes again, now off 14%, trading at 12 months lows" think of it like Benjamin Graham.
    "Shares get cheaper, SALE SALE SALE, buy quality companies at sale prices"

    Aviod specs, and companies with no E. Buy solid firms with a track record of earnings.

    If you are still worried about the "market risk". Just hedge out your portfolio via an index short on the SPI.
    “If you're worried about falling off the bike, you’d never get on.”

  9. #19
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    Default

    Have just transferred more funds to my broking account , i normally invest a similar amount each month , this month i will be investing more than usual.
    Ramsay healthcare has been my latest buy , and am now scouting around looking for domething else .

    Times like these may not be much fun , but they usually the best times to be buying. Judging by recent price action many seem to be buying high and selling low. Not the brightest strategy yet i suspect a now very common one

  10. #20
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    Default

    Quote Originally Posted by Footsie View Post
    Dear all

    If you could invest in a healthcare company with a fwd p/e of 6x and EPS growth of 100%.

    Is that a company to sell, just coz the market is falling? No

    The market is like a giant pendulum with values swinging from over to under valued all the time.


    Instead of seeing "Market crashes again, now off 14%, trading at 12 months lows" think of it like Benjamin Graham.
    "Shares get cheaper, SALE SALE SALE, buy quality companies at sale prices"

    Aviod specs, and companies with no E. Buy solid firms with a track record of earnings.

    If you are still worried about the "market risk". Just hedge out your portfolio via an index short on the SPI.

    Point taken!

    I believe Microsoft listed in 1986...and would have been outstanding long-term buying......irregardless of doing so before or after the sharemarket crash.

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