# Bargain hunting?



## mime (15 August 2007)

Does anyone think the that market has been over sold? I feel that this kind of drop over the credit squeeze in the US is over the top. The bottom line is that Aus companies are still making major profits the squeeze can't affect the profits that badly. So bounce back?

Lets think about it.


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## the barry (15 August 2007)

*Re: Bargin hunting?*



mime said:


> Does anyone think the that market has been over sold? I feel that this kind of drop over the credit squeeze in the US is over the top. The bottom line is that Aus companies are still making major profits the squeeze can't affect the profits that badly. So bounce back?
> 
> Lets think about it.




Have to agree, the question is when to pull the trigger to do so? Whilst potentially oversold at the moment, nothing to say it won't end up more oversold.


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## Uncle Festivus (15 August 2007)

*Re: Bargin hunting?*

Gold companies oversold, Aus gold price up. Bargains yet?


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## dj_420 (15 August 2007)

*Re: Bargin hunting?*

take a look at GBG for a bargain! almost 30% drop in one day WTF????


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## Ken (15 August 2007)

*Re: Bargin hunting?*

Why not wait for a trend to develop? At the moment the trend is down.

We as individual investors cant influence the trend.

Depends on your strategy I guess.

If you are a long term investor I dont think buying when the market is in free fall is the smartest thing to do.

A lot of investors are spooked.

Protect your capital untill the dust settles.


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## Wysiwyg (15 August 2007)

*Re: Bargin hunting?*



mime said:


> Does anyone think the that market has been over sold? I feel that this kind of drop over the credit squeeze in the US is over the top. The bottom line is that Aus companies are still making major profits the squeeze can't affect the profits that badly. So bounce back?
> 
> Lets think about it.




I almost started a thread then on swan dives but this one will do.Can be lucrative catching these type.Here is a good swan dive mime.GOP.

Anyone have other examples recently?


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## mime (15 August 2007)

*Re: Bargin hunting?*



Ken said:


> Why not wait for a trend to develop? At the moment the trend is down.
> 
> We as individual investors cant influence the trend.
> 
> ...




What the trend been in the last 6 months?


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## Ken (15 August 2007)

*Re: Bargin hunting?*

Well the trend is obviously south at the moment. We had hit all time highs for an extended period.

You'd prefer to be watching than holding at the moment wouldnt you?


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## Nick Radge (15 August 2007)

*Re: Bargin hunting?*

Those that pick bottoms get dirty fingers.

_Chinese proverb_


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## mime (15 August 2007)

*Re: Bargin hunting?*



Ken said:


> Well the trend is obviously south at the moment. We had hit all time highs for an extended period.
> 
> You'd prefer to be watching than holding at the moment wouldnt you?




You will probably find that the all ords was it similar levels to what is was in Jan if not a little higher.


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## -merry (15 August 2007)

*Re: Bargin hunting?*

Can anyone see how the sub prime mortgage problem in the US is affecting the resource sector in Australia? I cannot see a link between the two. Especially with the smaller companies that are still in the exploration phase, they are generally free from leverage. I dont see how the fundamentals of the stocks have changed. Weren't these shares valued on the basis of what they ahve got in the ground and where they were going to go? (i.e. China mainly) Is the selling of resource stocks a result of panic in the market or investors selling off stocks because they took up loans to invest in shares and can no longer afford to repay the interest?


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## Ken (15 August 2007)

*Re: Bargin hunting?*

The market is constantly moving, at the moment its moving south.  

Who are we to disregard that?

Last week MBL was a bargain at $77 now its $66.

There is buying stocks at value, and there is throwing money away.

MBL could be $58 next week. Who knows?  

You would rather buy MBL at $66 going up than MBL at $66 going down in my opinion.


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## INORE (15 August 2007)

*Re: Bargin hunting?*

I beleive that once we are out of this freefall which could be some time yet, there's method of picking the most likely to bounce back 'bargains'.  It would have to take into account any company activities that could have also effected the SP.  

I have some stocks on my lists which are producers that have fallen 30% and some that have fallen 60%....Would it make sense that taking into account all the economic factors etc. to pik the stock which has dropped the most???  I hope so because that's what i plan on doing....the next and most critical would be to obviously time it all.....some reports are now touting XAO to next support of 5400...

_1226 [Dow Jones] TECHNICAL ANALYSIS: S&P/ASX 200 looks headed to 5600 while it remains below 6165 in the next few months, says Dow Jones technical analyst Dave Rogers. Last month, index broke steep weekly uptrend line from September 2006 and triggered broadening top pattern, amid deepening concern over subprime lending crisis. Subsequent bearish key reversal pattern on monthly charts and likely sustained break of 200-day moving average near 5967 calls for a few months of weakness. There is some Fibonacci support at 5800, but index probably needs to test major support levels. Bear flag pattern targets 5600. There's also major support near 5640 from February 2007 peak and monthly uptrend line from May 2005. Given that index fell 16% in the LTCM crisis, a fall to the next major support level at 5400 can't be ruled out. Index last 5858.8. (DWR)_

hmmmm no bargains around for a while me thinks....but has anyone got any more thoughts on how to get the best bargains when the time comes?


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## chops_a_must (15 August 2007)

*Re: Bargin hunting?*



INORE said:


> I beleive that once we are out of this freefall which could be some time yet, there's method of picking the most likely to bounce back 'bargains'.  It would have to take into account any company activities that could have also effected the SP.
> 
> I have some stocks on my lists which are producers that have fallen 30% and some that have fallen 60%....Would it make sense that taking into account all the economic factors etc. to pik the stock which has dropped the most???  I hope so because that's what i plan on doing....the next and most critical would be to obviously time it all.....some reports are now touting XAO to next support of 5400...



No. You want to get into the shares that fall the least. That shows the underlying strength.


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## INORE (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> Can anyone see how the sub prime mortgage problem in the US is affecting the resource sector in Australia? I cannot see a link between the two. Especially with the smaller companies that are still in the exploration phase, they are generally free from leverage. I dont see how the fundamentals of the stocks have changed. Weren't these shares valued on the basis of what they ahve got in the ground and where they were going to go? (i.e. China mainly) Is the selling of resource stocks a result of panic in the market or investors selling off stocks because they took up loans to invest in shares and can no longer afford to repay the interest?




china needs our goods/materials to make their goods which in turn they sell to the US (if the US can afford it cos they're now homeless)


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## Ken (15 August 2007)

*Re: Bargin hunting?*

I reckon look for stocks that are going to be in managed funds.

BHP
WOW
CBA
WBC
ANZ
RIO
MBL
QBE

Anything top 20...

Thats what moves the index. So if the index hits all time highs again it will be these stocks that are doing well.

Why not look at a managed fund itself?


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## Nick Radge (15 August 2007)

*Re: Bargin hunting?*



> china needs our goods/materials to make their goods...




Too true. But what is wrong with this statement?


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## chops_a_must (15 August 2007)

*Re: Bargin hunting?*



Nick Radge said:


> Too true. But what is wrong with this statement?




We need them to make our goods for us.

They aren't "their" goods.


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## billhill (15 August 2007)

*Re: Bargin hunting?*



			
				chops_a_must said:
			
		

> We need them to make our goods for us.
> 
> They aren't "their" goods.




agree. China still does not have a significant consumer ecconomy. Until then we all rely on the US to consume good. US consumption is still the world ecconomic engine.


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## -merry (15 August 2007)

*Re: Bargin hunting?*



INORE said:


> china needs our goods/materials to make their goods which in turn they sell to the US (if the US can afford it cos they're now homeless)




Although the US plays a big role in China's export industry, it's not the only country that imports goods from China and not all materials going into China is used to make products. What about the infrastructure and development? Also, a lot of the materials exported to China are used to produce commodities and staple goods. And then what about gas and oil stocks? How will the demand for oil and gas decrease so much as to see the kind of movements in share prices that we're seeing? Is everyone starting to think that the US is heading to a recession?


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## chops_a_must (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> Also, a lot of the materials exported to China are used to produce commodities and staple goods



I'm not sure how much iron-ore it takes to make staples...


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## UPKA (15 August 2007)

*Re: Bargin hunting?*



chops_a_must said:


> We need them to make our goods for us.
> 
> They aren't "their" goods.




Thats true, but alot of the materials they use are for domestic use, such as urbanisation, and of course the olympics. The chinese arent big on exporting produces that's heavy on metals, so I believe most of their imported metals are for domestic use. a good example is looking at the chinese private car ownership rate.


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## lazyfish (15 August 2007)

*Re: Bargin hunting?*



chops_a_must said:


> I'm not sure how much iron-ore it takes to make staples...




Just look at the number of people from urban areas migrating to major cities in China, and think about the number of buildings, bridges, freeways they need to build to support all that growth.


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## billhill (15 August 2007)

*Re: Bargin hunting?*



			
				UPKA said:
			
		

> Thats true, but alot of the materials they use are for domestic use, such as urbanisation, and of course the olympics. The chinese arent big on exporting produces that's heavy on metals, so I believe most of their imported metals are for domestic use. a good example is looking at the chinese private car ownership rate.




Their urbanisation is related directly to the speed at which their ecconomy grows. If the US goes into recession their manufacturing sector will significantly slow not just because of lower demand from the US but also lower demand from other industrialised countries that significantly feed off US consumption for ecconomic growth. This will in turn slow other sectors of the ecconomy which in itself will lead to lower demand for raw materials for all uses.


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## Nick Radge (15 August 2007)

*Re: Bargin hunting?*



> We need them to make our goods for us. They aren't "their" goods.




No.

The thought processes being put forward here are too simplified. You need to think differently.

It has nothing to do with the US, although their current situation is only amplifying the move.


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## Gundini (15 August 2007)

*Re: Bargin hunting?*



Ken said:


> The market is constantly moving, at the moment its moving south.
> 
> Who are we to disregard that?
> 
> ...




That is a seriously good point Ken, cost the same but on the up! Who are we to pick bottoms, dirty fingers as Nick said...



Nick Radge said:


> Too true. But what is wrong with this statement?




Simply, China import the resources to make the stuff and export to USA. But USA is falling over, so prehaps less demand for imported goods, therefore less demand from China for exports from AUS. 

We can all understand why sub prime mortgages fall over because their clients are of shaky means, but if the regular mortgage holders start to default in a meaningfull way, we are definately heading for a bear market...


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## jonojpsg (15 August 2007)

*Re: Bargin hunting?*

I definitely agree that resource stocks look oversold.  Check the ZFX thread - with zinc prices holding up reasonably well, ZFX will continue to deliver excellent returns just on dividend alone.  Given that in current conditions people will chase sustainable yield, ZFX looks like it should bounce back pretty strongly.  This in comparison to say BHP which has lower yields


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## UPKA (15 August 2007)

*Re: Bargin hunting?*



billhill said:


> Their urbanisation is related directly to the speed at which their ecconomy grows. If the US goes into recession their manufacturing sector will significantly slow not just because of lower demand from the US but also lower demand from other industrialised countries that significantly feed off US consumption for ecconomic growth. This will in turn slow other sectors of the ecconomy which in itself will lead to lower demand for raw materials for all uses.




China's total trade with US accounts for 20% of their overall international trade, standing as the 2nd biggest trading partner. Whilst Japan is still the number 1 trading partner to China. 

Mind you China export a varity of produces overseas, and very few of them are luxury item. If US goes into recession, first thing to get hit are luxury goods consumptions. So i seriously can't see the chinese economy getting seriously hurt by a US recession.


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## billhill (15 August 2007)

*Re: Bargin hunting?*



			
				UPKA said:
			
		

> China's total trade with US accounts for 20% of their overall international trade, standing as the 2nd biggest trading partner. Whilst Japan is still the number 1 trading partner to China.




What happens to Japans ecconomy if the US goes into recession seeing as they are a significant trade partner of the US. Then What happens if because of this the Japanese ecconomy slows. Less trade with china from both the US and Japan plus any other large US trading partners. I'm not saying thats chinas demand for materials is going to fall off a cliff all i'm trying to point out is that prices are likely to fall due to a slowing of the chinese ecconomy asuming the US goes into recession. How much it slows is for debate.


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## Nick Radge (15 August 2007)

*Re: Bargin hunting?*

You keep thinking China. You keep thinking demand You keep thinking US. You keep thinking commodities etc. You need to think differently.

Let me try a different tact.

What do you all do for a living?

UPKA?
jonojpsg?
Gundini?
billhill?
lazyfish?
chops_a_must?


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## UPKA (15 August 2007)

*Re: Bargin hunting?*



billhill said:


> What happens to Japans ecconomy if the US goes into recession seeing as they are a significant trade partner of the US. Then What happens if because of this the Japanese ecconomy slows. Less trade with china from both the US and Japan plus any other large US trading partners. I'm not saying thats chinas demand for materials is going to fall off a cliff all i'm trying to point out is that prices are likely to fall due to a slowing of the chinese ecconomy asuming the US goes into recession. How much it slows is for debate.




hmm the japanese economy never really recovered since 97, it has been flat since. the recent chinese boom shows that the demanding are coming from else where, not just trades from its top 10 trading partners. overall, we need to keep an eye on the Asian economy, any slow down there we could be facing alot of trouble


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## UPKA (15 August 2007)

*Re: Bargin hunting?*



Nick Radge said:


> You keep thinking China. You keep thinking demand You keep thinking US. You keep thinking commodities etc. You need to think differently.
> 
> Let me try a different tact.
> 
> ...




Hi nick, I did economics by degree, financial planner by trade. bt im still fresh out of the oven:


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## chops_a_must (15 August 2007)

*Re: Bargin hunting?*



Nick Radge said:


> You keep thinking China. You keep thinking demand You keep thinking US. You keep thinking commodities etc. You need to think differently.
> 
> Let me try a different tact.
> 
> ...




Selling my body any day now...


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## lazyfish (15 August 2007)

*Re: Bargin hunting?*



Nick Radge said:


> You keep thinking China. You keep thinking demand You keep thinking US. You keep thinking commodities etc. You need to think differently.
> 
> Let me try a different tact.
> 
> ...




I am a software developer, almost ended up coding for Citibank in Shanghai. Having lived in China for 10 years it's just a little too hard for me to stop thinking about it :


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## billhill (15 August 2007)

*Re: Bargin hunting?*



			
				Nick Radge said:
			
		

> You keep thinking China. You keep thinking demand You keep thinking US. You keep thinking commodities etc. You need to think differently.
> 
> Let me try a different tact.
> 
> ...




I'm currently about to go on a long holiday so have quit work but i'm in biomedicine by trade.
I can't figure out what your trying to say though. Keenly awaiting the answer.


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## UPKA (15 August 2007)

*Re: Bargin hunting?*



billhill said:


> I'm currently about to go on a long holiday so have quit work but i'm in biomedicine by trade.
> I can't figure out what your trying to say though. Keenly awaiting the answer.




room with 13 economists, they can always come up with 14 diff views n solutions...


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## -merry (15 August 2007)

*Re: Bargin hunting?*



chops_a_must said:


> I'm not sure how much iron-ore it takes to make staples...




hahaha... nah, by staple goods i mean goods that are purchased regularly out of necessity. For example, canned food  (tin and aluminium) and its not just iron ore companies that are affected, the SP most companies are being affected (e.g. nickel, oil, gas, coal, gold, copper etc.. )  by the subprime although the majority of the fall in the index is due to the financial heavy weights e.g. MBL, CBA losing a lot of ground. I think when people see the that the index is going they automatically think oh crap, everything's going down but i think generally the fall in the index is related to the companies in the financial sector... well it was initially anyway... now its spreading like a virus


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## -merry (15 August 2007)

*Re: Bargin hunting?*

http://uschina.org/info/analysis/2007/june-trade-performance.html

the info from the site suggests that exports to the US is only about 6% of china's total exports... so.. i still fail to see how the sub-prime mortgage problems in the US is going to have a significant impact on China's growth. I mean its not like China's export to US will drop to 0% just because of the sub-prime mortgage crisis right? and as UPKA said, a lot of the materials exported to China is also used for urbanisation and not purely for exports. It's puzzling to see resource stocks drop by 10, 20, 30% over this... even some companies that post record profits don't see increases in the S.P. 

p/s: i'm jsut throwing some ideas out there trying to figure out what is happening to the ASX. As so many people put it - DYOR


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## numbercruncher (15 August 2007)

*Re: Bargin hunting?*

Credit crunch - to much owned with borrowed money - domino effect


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## -merry (15 August 2007)

*Re: Bargin hunting?*



numbercruncher said:


> Credit crunch - to much owned with borrowed money - domino effect




do you mean too many traders borrowed money to trade and now that interest rates are going up they cant keep up with repayments so they're shorting?


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## shinobi346 (15 August 2007)

*Re: Bargin hunting?*

yup. margin loans being called.. market being flooded with shares..

banks losing lenders... banks tightening who they'll lend money to...

banks boosting interest rates of their own..

ones gonna flow to another from this. Until the US stabilises I dont think we've seen all the real damage from this.


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## -merry (15 August 2007)

*Re: Bargin hunting?*

gg. danger with using margin loans i guess... oh well.. i guess its time to sit tight and hold on till the dust settles... makes you wonder how many high risk or uninformed investors there are in the market sometimes... playing with margin loans despite early warning signs of troubles of interest rate hikes and problems with the US sub prime mortgages


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## waz (15 August 2007)

*Re: Bargin hunting?*

Hi Merry

Looking at that article

exports to america in 2006 was 287.8bil
out of a total of 968.9 bil

that makes 29.7% of all chinese exports go to america.

i dont know where u got your 6% figure from

nearly every country in the world has at least 10% of their trade with america.
and most around the pacific rim will have a figure of 20% plus.

also, a majority of these exports are consumer goods. not resources.


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## numbercruncher (15 August 2007)

*Re: Bargin hunting?*

And Chinas biggest single customer and the largest retailer in the US Walmart just posted a profit warning ....


Only thing i find a bit baffling so far is that Chinese stocks havnt tanked, i suspect that will come soon enough though all considered.

US futures lower so US market will probly tank a bit further tonight, some Inflation data being released tonight to may have an effect .....

Interesting market place atm


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## -merry (15 August 2007)

*Re: Bargin hunting?*



waz said:


> Hi Merry
> 
> Looking at that article
> 
> ...




You're right... my bad, i got 6% coz i was looking at "US Exports" thinking it was the figure for China exporting to the US. And the thing is the resources exported from Australia to China is used in producing the consumer goods. But my point from earlier on was basically me trying to understand why the resource sector has been hit so bad because I could not identify a strong link between Australia's export of resources to China and the sub-prime mortgage problem in the US. I mean sure the US imports a lot from China but like I said before it's not like all of China's exports are going to the US, not all of Australia's exported resources go to China and not all the resources exported to China is being used to produce consumer goods for the US. The resources is also being used for urban development etc... At the moment, what I'm thinking is people are pulling out cause
a) they've been trading on a margin loans
b) interest rate hikes and future interest rate hikes are putting pressure on the interest they have to repay
c) they have no idea what is really going on and are freaking out because the heavy weights have shed some blood in the financial sector and have pulled the index down so they're selling and waiting for everything to be calm again

anyone have any idea how much resources Australia exports to the US? is it significant? Demand for gas and oil might decrease with the decrease in disposable income but i wouldn't expect demand for these resources to change significantly seeing as the demands for these resources are relatively inelastic for now


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## Wysiwyg (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> do you mean too many traders borrowed money to trade and now that interest rates are going up they cant keep up with repayments so they're shorting?




Everyone I know that do not have money directly invested in the sharemarket are continuing on as normal.Aussie lives don`t change that much when the  seppos have a loan default problem.(maybe there is a hidden real issue)The scaremongers are out in force on the forums though.They may be right for a while.:chainsaw:


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## wayneL (15 August 2007)

*Re: Bargin hunting?*



Wysiwyg said:


> Everyone I know that do not have money directly invested in the sharemarket are continuing on as normal.Aussie lives don`t change that much when the  seppos have a loan default problem.The scaremongers are out in force on the forums though.They may be right for a while.:chainsaw:



The majority always carry on as normal. Even in the great depression, 70% of people still had jobs, some got rich from the depression. Prices are set, economies fortunes are made and lost on the fringes.

Keep a close eye on sentiment, because it will change. It's subtle, and the change is gradual, so you have to pay attention.

Bear in mind also, folks carry on as if nothing is wrong, even if insolvent.


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## -merry (15 August 2007)

*Re: Bargin hunting?*



Wysiwyg said:


> Everyone I know that do not have money directly invested in the sharemarket are continuing on as normal.Aussie lives don`t change that much when the  seppos have a loan default problem.(maybe there is a hidden real issue)The scaremongers are out in force on the forums though.They may be right for a while.:chainsaw:




by traders I meant people who trade shares on the ASX : and i guess you gotta feel sorry for the day traders who took up margin loans to day trade coz they'll be in a real pinch right about now =/


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## wayneL (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> by traders I meant people who trade shares on the ASX : and i guess you gotta feel sorry for the day traders who took up margin loans to day trade coz they'll be in a real pinch right about now =/



Why would that be merry?


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## nomore4s (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> by traders I meant people who trade shares on the ASX : and i guess you gotta feel sorry for the day traders who took up margin loans to day trade coz they'll be in a real pinch right about now =/




 I'd imagine most daytraders would be loving the markets atm


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## -merry (15 August 2007)

*Re: Bargin hunting?*



wayneL said:


> Why would that be merry?




interest rates going up, margin loans might be called if sub prime mortgage in the US worsens, share market taking a plunge coz of panic selling and various other reasons mentioned earlier, day traders normally trade for short term profits, the share market in reds, there is pressure of interest repayments (which means they need to make enough to cover interest) and we have no idea how long this bloodbath will last...  correct me if i'm wrong but.. i'm still quite new.. all i've got is a whole bunch of stuff i've picked up from trading, reading stuff and what i've learnt from my accounting and finance degree (not much really )


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## professor_frink (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> interest rates going up, margin loans might be called if sub prime mortgage in the US worsens, share market taking a plunge coz of panic selling and various other reasons mentioned earlier, day traders normally trade for short term profits, the share market in reds, there is pressure of interest repayments (which means they need to make enough to cover interest) and we have no idea how long this bloodbath will last...  correct me if i'm wrong but.. i'm still quite new.. all i've got is a whole bunch of stuff i've picked up from trading, reading stuff and what i've learnt from my accounting and finance degree (not much really )




It sounds like you may be confusing traders and gamblers


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## wayneL (15 August 2007)

*Re: Bargin hunting?*



nomore4s said:


> I'd imagine most daytraders would be loving the markets atm



Exactly, manna from heaven.



-merry said:


> interest rates going up, margin loans might be called if sub prime mortgage in the US worsens, share market taking a plunge coz of panic selling and various other reasons mentioned earlier, day traders normally trade for short term profits, the share market in reds, there is pressure of interest repayments (which means they need to make enough to cover interest) and we have no idea how long this bloodbath will last...  correct me if i'm wrong but.. i'm still quite new.. all i've got is a whole bunch of stuff i've picked up from trading, reading stuff and what i've learnt from my accounting and finance degree (not much really )



Any serious and profitable daytrader will be trading short as well as long. In times of extreme volatility, it is the daytraders who do better than anyone else.

Lots of people in the markets like to sh!tpot daytrading for various  psychological reasons. Don't believe them, it's all BS and far removed from reality.


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## nomore4s (15 August 2007)

*Re: Bargin hunting?*



wayneL said:


> Exactly, manna from heaven.
> 
> 
> Any serious and profitable daytrader will be trading short as well as long. In times of extreme volatility, it is the daytraders who do better than anyone else.
> ...




Unfortunately I'm not set up to daytrade. Not enough experience and plus I can't trade at work. I also can't trade short either atm, so I'm really only sitting on the sidelines atm (1 open trade atm)


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## -merry (15 August 2007)

*Re: Bargin hunting?*



wayneL said:


> Exactly, manna from heaven.
> 
> 
> Any serious and profitable daytrader will be trading short as well as long. In times of extreme volatility, it is the daytraders who do better than anyone else.
> ...




are you by any chance a daytrader? wayne? :


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## wayneL (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> are you by any chance a daytrader? wayne? :



I prefer to swing trade, but will daytrade when appropriate.


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## -merry (15 August 2007)

whats a swing trade? combination of day trading/buy & hold?


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## Wysiwyg (15 August 2007)

At the present devaluation rate of stock some have gone from way oversold to near worthless.Sifting sifting .... there is money to be made.


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## chops_a_must (15 August 2007)

*Re: Bargin hunting?*



-merry said:


> hahaha... nah, by staple goods i mean goods that are purchased regularly out of necessity. For example, canned food  (tin and aluminium) and its not just iron ore companies that are affected, the SP most companies are being affected (e.g. nickel, oil, gas, coal, gold, copper etc.. )  by the subprime although the majority of the fall in the index is due to the financial heavy weights e.g. MBL, CBA losing a lot of ground. I think when people see the that the index is going they automatically think oh crap, everything's going down but i think generally the fall in the index is related to the companies in the financial sector... well it was initially anyway... now its spreading like a virus




I knew what you meant... just trying to get a laugh...


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## nomore4s (15 August 2007)

*Re: Bargin hunting?*



chops_a_must said:


> I knew what you meant... just trying to get a laugh...




lol, Chops you're getting smashed with your attempts at comedy tonight


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## wayneL (15 August 2007)

-merry said:


> whats a swing trade? combination of day trading/buy & hold?



http://en.wikipedia.org/wiki/Swingtrading

N.B. The article suffers from cognitive bias and is largely a load of old cobblers, but gives the general idea of what swing trading is.


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## -merry (15 August 2007)

ahh... didnt realise it was a joke.. haha my bad... my portfolio is bleeding.... owwwww


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## Nick Radge (15 August 2007)

Sorry for my slow reply.

My point in this debate is that everything being discussed, and has been over the last year or so, has been priced into the market already. We must undersstand that there are a lot more smarter people out there - and I mean no disrespect to anyone here as it goes for me just as much - but these people think years ahead of the pack. 

The reason why so many stocks have had staggering trends is because people have _*already*_ realised the true potential of China and India. They know what is occuring and have done so for a long time - that's _*WHY*_ prices are where they are now. If there was more upside scope in China and therefore the knock-on effect into Australia then it would be being priced in accordingly. The market is effeicient enough to do this, although this is a simplified explaination because efficiency runs thorugh a lot of stages and hands.

This does not mean we cannot go up into the future but to do so will mean we need to operate at a different paradigm to what we already do. We need something new to shift to that new level. At this stage ist clear that there is nothing new ou there. If there is nothing new out there, then prices will fall back or re-adjust. A change in economic policy, global policy, whatever, I don't know what the next driver will be. But until there is one, we won't keep travelling this same "china blah blah blah" path. It may well be that the new paradigm is in fact a negative one. A credit crunch, but something unexpected that comes from left field or one that only a small handful really knew about before. I do not subscribe to this US collapse crap. Its been around for 8-years now. You speak to bond traders around the world and they're not concerned. That said, if the current paradigm changes, then it becomes a different story and you'll see the shift. A new paradigm maybe a change in Japanese policy or culture toward US treasuries or a new global currency haven. But its clear than the US$ is still a safe haven as a US bonds. 

Not sure I'm making sense. My point is its just not as simple as everyone makes it out to be. If it were people wouldn't be wondering why they bought RIO considerably higher than current levels...


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## Surly (15 August 2007)

Nick,

In a crash such as this what is your opinion on the split between sells based on changed fundamentals as judged by these smarter people and sells based on people preserving profits / panicking / hitting a stop / margin calls or something other than a decision made by the smarter people you mention?

cheers
Surly


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## Spaghetti (15 August 2007)

Well I am not happy.

There is a problem in the world yet the extent of the problem is not being disclosed. People are reacting with blinkers on, second guessing, who really knows anything? I find it all very unprofessional. I do not know who to blame but blame must lie somewhere.

The problem with sub-prime mortgages has been known for sometime. Why wasn't the extent of the problem disclosed then, why not even now?

If this problem was occuring on an individual share level the ASX would be jumping up and down demanding transparency and full disclosure.  What is the point of small time disclosures when we allow big time errors to go unchecked?

This to me shows a weakness in the system and it is hard to even trust the markets when this type of thing occurs and the only response you get it, ....we may know the fallout consequence by end of qtr?

It is not good enough to be honest. Is this a top notch market or a third world crap hole?


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## -merry (15 August 2007)

Nick Radge said:


> The reason why so many stocks have had staggering trends is because people have _*already*_ realised the true potential of China and India. They know what is occuring and have done so for a long time - that's _*WHY*_ prices are where they are now.




if that was the case, why are people suddenly deciding to short now? the growth in China is long term and has only started 1 year or so ago... it's still got a couple more years to run... why short so early?


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## brettc4 (16 August 2007)

Nick Radge said:


> My point in this debate is that everything being discussed, and has been over the last year or so, has been priced into the market already. We must undersstand that there are a lot more smarter people out there - and I mean no disrespect to anyone here as it goes for me just as much - but these people think years ahead of the pack.




I am well aware that you have been in the game much longer than I have, but I cannot agreen with this statement.

Firstly, yes there may be a lot of smart people, but I do not believe anyone has a model that contains enough information to price everything into the market, all future earnings are estimates and therefore bound to be wrong to a degree, so the current price can have no bearing on what will occur in the future.

Secondly, even if there are a few people out there with this, the rest do not have it, so the majority are running on fear or greed, or are following the trend.  They have not priced anything in, they are just trying to profit on the move, which moves the price away from what the smart guys think it should be. How much it moves away depends on how fearful or greedy people are.

Thirdly, I cannot imagine the smart guys would have a consesus on price. They would all think it should be different.

The smart guys may try to push the price back to what they think it should be, but they have only so much money to do this with, and if the are leveraged to the hilt which some are, they may have to get out while the "dumb" people are selling the market, and therefore they too force a reduction in the price, even though they may think it is worth more.

I simple do not believe the current price has all market knowledge about a stock actually taken into account. I believe in people making judgements on limited information, and I believe in people programming machines to make judgments on limited information, and in the end, people aren't as smart as we would like to think.

Brett


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## -merry (16 August 2007)

brettc4 said:


> I am well aware that you have been in the game much longer than I have, but I cannot agreen with this statement.
> 
> Firstly, yes there may be a lot of smart people, but I do not believe anyone has a model that contains enough information to price everything into the market, all future earnings are estimates and therefore bound to be wrong to a degree, so the current price can have no bearing on what will occur in the future.
> 
> ...




I believe Brett has some good points. On a side note, the Dow has opened green! hooray! hopefully it continues to stay green for the rest of the day


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## chops_a_must (16 August 2007)

brettc4 said:


> Thirdly, I cannot imagine the smart guys would have a consesus on price. They would all think it should be different.




What was RIO doing for instance? I doubt they would have made such a call if they had of thought current conditions would/ soon prevail in the longer term...


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## Sean K (16 August 2007)

-merry said:


> if that was the case, why are people suddenly deciding to short now?



The 'smart money' was selling and/or shorting stocks long before the correction. Probably from Mid May, but some earlier. Check the charts of the top 100 from around then. I haven't a summary but I dare so the majority were sliding. Check MBL, ANZ, WDC, etc etc. I think the only stocks holding the index up were materials.


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## theasxgorilla (16 August 2007)

Nick Radge said:


> We must undersstand that there are a lot more smarter people out there - and I mean no disrespect to anyone here as it goes for me just as much - but these people think years ahead of the pack.




The irony is that some of the people that I think you encompass with the above comment have stayed out of the markets for the last 10 (or more) years...since they could see what was going on with the whole credit situation and the imbalances being created.  Instead, they made a living out of crying wolf.  They'll eventually be right...hopefully not before they're too old to relish it.


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## ta2693 (16 August 2007)

I have adjusted my position 50%cash, 50%shares to a comfort place before yesterday's dropping. If my problem with IB and Commsec did not happen, I will not lose my sleep. 
Today dow dropped down 167.45. it is not a good sign. we are more likely to have a bearish market today.

But I strongly think It is a little bit too late to sell and you have better hold it. if you want to adjust your position, wait until next bullish day. 
Never sell when you are panic, Never sell when everything is too late.


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## Nick Radge (16 August 2007)

> his is a simplified explanation because efficiency runs through a lot of stages and hands.




This is what I said above. I am not asking anyone to agree with me. I simply suggesting from my 22-years of trading, both inside and outside of institutions (no, not nut houses) that markets operate on a level that is not so obvious as is being put forward here. 

Price is not so important. Example, macro hedge funds which have been around since the 60's operate on big idea's. Essentially Warren Buffet does the same. They come up with a "concept" which will be caused by a global "adjustment" in prices. They then position themselves, in a variety of ways, to take advantage of that adjustment. If I remember rightly Buffet "positioned" himself in Copper quite a number of years ago. I used to deal for Tiger Management in the 90's and they did the same thing. I remember Julian Robertson, when the Nikkei was at 22,000, saying that "...the Nikkei will fall below 10,000...". His instruction to his traders were to position themselves across the board for that scenario. Obviously they sold the Nikkei short, but they also exploited all the other area's that would be effected if/when scenario unfolded.

Think about stages and hands. Think about who. Think about where you stand in this process. 



> ...so the majority are running on fear or greed, or are following the trend




Yes. Why else do you think this market has tanked in such quick order?

.


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## dj_420 (16 August 2007)

regarding leverage would there not be a great amount of people out there fully leveraged and waiting for the bottom in this??? i know i am, i set up a margin loan specifically for that purpose and have had margin loan at ready for around 3 - 4 weeks. i didnt want to enter into any margin positions until we had a correction.

disc - still holding around 25-30% in shares. only have two positions open now. in hindsight i would have been better off selling those also when i closed out short positions but thems the breaks. still sitting on decent amount of cash and leverage to catch the bottom.

BUT the big question is where is the bottom? and what stocks to buy at the bottom. like others have said in mining it would be proven companies with proven resources, good track records, great mgt, bumper profits etc. even by picking up cheap blue chips at the bottom 30-50% could be made on a rising market after the correction.

i have not really looked at industrials before, only researched everything i could about resources. im now starting to look at other pastures. what industrials have been sold off fairly heavily that have got good profits PE ratio etc?


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## Pager (16 August 2007)

Just my 2 cents worth.

I’m also sitting on the sidelines waiting to add to my long term portfolio.

What I look for is good quality stocks that have not been hit as hard as the general market, what this suggests to me is that people were reluctant to sell these stocks.

As to the bottom, well that’s anyone’s guess IMO, Buy when you feel the stock you want is a good price.

Cheers

Pager


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## ta2693 (16 August 2007)

Pager said:


> Just my 2 cents worth.
> 
> I’m also sitting on the sidelines waiting to add to my long term portfolio.
> 
> ...




I have two shares in my portfolio holds very well. 
one is CSM, the other is NAM.


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## krisbarry (16 August 2007)

Nick Radge said:


> Sorry for my slow reply.
> 
> My point in this debate is that everything being discussed, and has been over the last year or so, has been priced into the market already. We must undersstand that there are a lot more smarter people out there - and I mean no disrespect to anyone here as it goes for me just as much - but these people think years ahead of the pack.
> 
> ...





I do not buy into this ... at all.  Market sentiment has changed dramatically over the past 4 weeks.  From all bulls (well mostly), to all bears (well mostly).  Nothing is priced into the market, except future speculation, the market just happens, and local/global events play out and we price this into our markets, seconds, hours, days, weeks after things occur.

I think your theory is back-to-front.


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## >Apocalypto< (16 August 2007)

Stop_the_clock said:


> I do not buy into this ... at all.  Market sentiment has changed dramatically over the past 4 weeks.  From all bulls (well mostly), to all bears (well mostly).  Nothing is priced into the market, except future speculation, the market just happens, and local/global events play out and we price this into our markets, seconds, hours, days, weeks after things occur.
> 
> I think your theory is back-to-front.




STC

after your last little call about markets moving in a certain direction I don't think your words are worth anything!

remember your call about being in the market and the prices are going up fancy that! fell over 200 points if I remember correctly.

Like I said in one of my last posts to you. its fella's like yourself that are always on the wrong side, instead of looking for more falls now, you should be looking for points of exhaustion and support!

I would think very cearfully about what you claim especially to members like NIck Rage, I personally think you should read his books before you question his logic!

If you took the time to look at the US Dollar index you would see what he is talking about.


Good trading.


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## Kauri (16 August 2007)

I have no doubt that there is smart money, smarter money, smartest money, insiders, manipulators, whatever.... that move ahead of the crowd, for me it is alright being a part of the crowd so long as you stand to one side of the mob so as you can see clearly what is going on ahead. The leaders leave a trail that can be followed, the current downturn was a distinct possibility for mine, my E/W, and that of people I respect who also post unambiguous E/W charts and opinions, indicated that a top of some sort was imminent, the XAO was showing a rounding top combined with an expanding wedge/triangle, volatility with increased vol was evident without any new highs being made and held, and the XAO reversed its usual lagging position and started leading the XJO. Add to that a new breed of Gurus (in a smaller way resembling the DotComs Blodgett and Grubman?), that had appeared on the forums touting the *fundementals* of speccie mining companies that had little more than leases, limited cash, and no real prospect of becoming producers, dissapeared en mass!!! 
  When will this current bearish phase end?? Who in the crowd knows?? Who cares??I believe the signs will be there to be read when it happens, and the final confirmation will be when the Gurus return spreading their hundreds and thousands on the next hot unfundementally sound sector.
  In the meantime there is profit to be made trading the market in sync with its current state. One good trade I have found currently is if the market index rises on Friday, short it into the close as not many people are willing to hold over the Northern friday trading and weekend in case their is more bad news and they are locked in until monday.
   Smart... no way.. just lucky I guess...
  Cheers
..Kauri


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## Nick Radge (16 August 2007)

One of the reasons prices are moving so swiftly is because there are no buyers. They will come, but not so far.

The following chart may offer another example. When you look at the chart ask yourself when you started hearing about the sub-prime/credit crunch. Was it back in February 2006 like this chart? Or was it a few weeks ago when you read about it in the local rag? 

So what is this chart? Its a sub-prime banking firm in the US...tell me someone wasn't smart enough to know a long time ago.


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## benwex (16 August 2007)

FOR SOME REASON YOURE CHART ATTACHED IS NOT WORKING..

CAN YOU REATTACH IT?

REGARDS,

BENWEX


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## Wysiwyg (16 August 2007)

Nick Radge said:


> One of the reasons prices are moving so swiftly is because there are no buyers. They will come, but not so far.




Some saintly and righteous souls in the market may not want to get smelly fingers lol:More seppuku yet it seems.


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## moXJO (16 August 2007)

What a great market to trade at the moment.


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## springhill (16 August 2007)

I swore i would stay out of the market today and for the next week, but when i saw WSA at $3.98 and MEE at $0.10, well to me that is a BARGAIN! GBG, SDL and FXR are almost in that territory. Anyone else pick up any BARGAINS this morning?


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## dhukka (16 August 2007)

*Re: Bargin hunting?*



dj_420 said:


> take a look at GBG for a bargain! almost 30% drop in one day WTF????




dj, 

I was wondering how you value GBG to say that it is a bargain? Seeing as though it doesn't make any money, doesn't even have any revenue.


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## rub92me (16 August 2007)

benwex said:


> FOR SOME REASON YOURE CHART ATTACHED IS NOT WORKING..
> 
> CAN YOU REATTACH IT?
> 
> ...



For some reason your Caps Lock key appears to be stuck. Please hit the Caps Lock button once to fix this issue.


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## dj_420 (16 August 2007)

*Re: Bargin hunting?*



dhukka said:


> dj,
> 
> I was wondering how you value GBG to say that it is a bargain? Seeing as though it doesn't make any money, doesn't even have any revenue.




see GBG thread for analysis, IMO this is just getting silly, GBG market cap back down to almost 300 odd million. for a company that has over 1 billion tonnes in magnetite and starts production next year on hematite i would say this is now very undervalued.

we have more than 50% drop from its highs, valuations from brokers had placed this one up over 1.50. i just dont know about the whole market now!

after losses suffered on yesterday and today im glad i only held 25% of my portfolio, although in hindsight yes should have waxed the lot!


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## ta2693 (16 August 2007)

I suppose when ppl need liquidity. it just not there. 
One stop loss point hit after another. all fund manager moves back. hedge fund is shorting as much as they can. all financial advisors received the huge amount of calling from their client to withdraw their investment.  We should remember how much money be inject into the market when we change the superannuation law. All these ppl have to get out at loss before we can make profit. If you do not need liquidity and investing horizon is more than 5 years. what you need to do is just hold. if you have some money and do not fear to lose all of them, it is the time to make you rich. it not happen very often. If you want to be very rich, you can not miss the opportunity like today. big crisis and big opportunity always come hand in hand.


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## motorway (16 August 2007)

> One of the reasons prices are moving so swiftly is because there are no buyers. They will come, but not so far.




Nick has made some good points

and this is an important one.........The current move the speed/ the angle of the trend on charts...is unsustainable....

Would be buyers have the sellers where they would like them
Having to act as if this trend will continue through even zero...

A Lion waits in the bushes watching silently on the herds walking by.
He doesn't run out and exhaust himself chasing the weak when they are strong for nought . But waits because He knows from experience that something or someone will eventually panic them. Fear is always close by even  if it is only in the background forgotten in the recesses of the mind. When all is strangely peaceful, and there is great silence . When the herd is in a certain "position" even the sound of a twig snapping will be enough.... PANIC .. PANIC is such powerfully destructive force that.. it was recognized as the god Pan.. Who you never forgot to take steps to propitiate.

Once panicked by something or someone else.. The herd becomes destructive
of one mind , all followers.. They will even run over cliffs...

And the Lion.. Waits and waits and at His timing... When the weak are truly weak   .............*Feasts*..............

Everyone should be able to see the place of strange silence on the charts
that proceeded this correction... sideways sideways sideways...

Unfortunately many 
are MAX leveraged at the tops and
gamblers bet bigger and continue to do so after a streak.


Some where else I posted 
The Wyckoff Article
"The experts bandwagon"




> There are those who think they are studying the market when all they are doing is studying what someone has said about the market...Not what the market Has said about itself






> "Listen to what the market is saying about others, not what others are saying about the market."




Everything is two sided 
What is put forward as positive
conceals the negative..

Watch for signs of the herd exhausting ( the selling waves ) and
Watch for signs of the ''Lions" beginning their "feasting"

Use modern "12 Cyl" methods and don't get caught on anyone's "bandwagon"

remember waves are not straight lines
The mkt will not keep going through zero.


How many "experts" were saying now is the time to BUY all through JUNE ?


motorway


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## dhukka (16 August 2007)

Nick Radge said:


> Sorry for my slow reply.
> 
> My point in this debate is that everything being discussed, and has been over the last year or so, has been priced into the market already. We must undersstand that there are a lot more smarter people out there - and I mean no disrespect to anyone here as it goes for me just as much - but these people think years ahead of the pack.
> 
> ...




Have to largely agree. Except I do think the US is in more trouble than Nick acknowledges.  

China is old news. How much further can resource stocks run? Even the best such as RIO and BHP. RIO just turned in an *-11%* drop in earnings. BHP is expected to show modest earnings growth of about *11%* next week, where is the upside? 

As for all the speculative resource crap such as *GDN* that does not produce anything or make money, it is actually being re-rated to where it should be. This end of the market has enjoyed a run not much different from the dotcoms. Yet still you have those that cling to some forlorn semblance of hope that it will turn around. 

The paradigm has shifted, those that have disagreed with Nick so far seem to unable to make the change in their thinking. You are clinging to false hope and expectations.

The smart money is not sitting around waiting for China to turn it around for the rest of world. The type of opportunity being presented here is one that doesn't come around that often. You should be thinking about how best to position yourself to make the most of it.


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## GREENS (16 August 2007)

Geeze talk about panic…This is very healthy for the markets, getting rid of all that hype in spec stocks particularly the uranium sector, valuations are moving back to where they should be; about 80-90% of Aus listed U companies will never produce and those that will got way beyond themselves. 

There are some fundamentally solid companies out there that are getting dragged down on the overall market sentiment; you’ve just got to have enough balls to jump in, yes you may not pick the bottom and hence make a loss in the short run but within 2-3 years you’ll be making at least 100% gains. Look how solid the Australian market is we are seeing a large majority of our companies reporting significant growth in earnings (double digit figures), hence our market can continue to justify the returns it has been producing. The market and in fact a lot of companies are now trading on PE’s below their historic averages, inflation is till a worry but under control and the US is doomed, but nothing much has changed on that front over the past few years.

MBL
ANZ
KZL
CBH
OXR
SIP
BPT 
AED 
ROC
(Just to name a few)

Yes metal prices have fallen but so to has the USD/AU exchange rate meaning in AUD terms metal prices have remained relatively unchanged over the past 2 weeks. 

e.g. Zn (US) 1.56/lb when ER 0.865 now Zn (US) 1.47/lb when ER 0.82 therefore what the mining companies receive in AUD terms is still 1.80/lb. no change!!

In regards to oil if I remember correctly it’s still comfortably above US$70/barrel. For all these oil companies nothing has changed fundamentally so why have there share prices fallen 20-30%, when they are still in AUD terms receiving around $88/barrel. 

Markets work in funny ways and when the media and people hype the falls, contagion occurs and everyone sells out. The big end of town I can assure you won’t be panicking and will be accumulating at these levels. Ill put it forward that this market will be at least 7000 by the end of 2008 (i.e. 25% gain from 5600). Good luck to all in this market, and don’t be another sheep and follow the herd.  

PS wrote this very quickly, so wording may be terrible but my point of view on this matter is there. 

Greens


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## chops_a_must (16 August 2007)

dhukka said:


> As for all the speculative resource crap such as *GDN* that does not produce anything or make money, it is actually being re-rated to where it should be. This end of the market has enjoyed a run not much different from the dotcoms. Yet still you have those that cling to some forlorn semblance of hope that it will turn around.



Generally agree, but everything is being sold down regardless right now.

Even small caps that _are_ producers.


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## prawn_86 (16 August 2007)

chops_a_must said:


> Generally agree, but everything is being sold down regardless right now.
> 
> Even small caps that _are_ producers.




totally agree chops. Look at something like TMR. has been absolutely smashed in this sell of, from 35c down to 20. And this is a co which has a regular profit and is continuing to expand.


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## dhukka (16 August 2007)

chops_a_must said:


> Generally agree, but everything is being sold down regardless right now.
> 
> Even small caps that _are_ producers.




Yep no doubt there is some panic out there and some stocks are being sold down beyond what the fundamentals warrant. *ZFX* was smacked 11% yesterday and another 4.5% today.  That's the nature of the market, overshoots to the upside when the bulls are in control and then to the downside when genuine panic sets in.


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## daggs (16 August 2007)

I wasn't going to buy today, but couldn't ressist these bargains

GBG
BMN
EMR 

Left some capital for tommorow though
I know it's a risk picking bottoms but these seemed too cheap


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## INORE (16 August 2007)

good luck daggs....you got balls....i'm gonna wait to some trend lines start to reverse...there still seems way too much risk out there and i cant see the market doing a quick about face over night...i had a fire sale yesterday and have allready saved myself 20g in losses if i sold today...I'm liking RIO, AZZ, and maybe YML but i think a bit more may come off YML as they still havent produced and nickel still falling i think...


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## daggs (17 August 2007)

INORE said:


> good luck daggs....you got balls....i'm gonna wait to some trend lines start to reverse......




Yepp, BIG BALLS!!!!!, but I think your using my catscan as your avitar

I'm up 3.5%, 14% and 19% on paper so as long as the dow behaves reasonably well tonight the gamble will pay off. 
At least I have a good buffer there now for future volitility.
All three companys have major news on the horizon that I feel will raise the SP even in the current market.(As long as the news is as good as hoped).
I've only got 20k in the market and I'm fairly young so I have a high risk tolerance.
I too would be on the sidelines ATM if I had my life savings on the line.


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## nioka (17 August 2007)

I believe I have bought some bargains in the last two days. AGM @ 50c, TAS @ 15c and ADI @ 52c. They may slip a little, it is hard and risky to get the very bottom but at these prices I believe I have value. This correction will certainly shake out a lot of uranium, nickel and iron ore hopefulls but the companies with a future will rebound quickly. That is my opinion anyway.


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## GreatPig (17 August 2007)

A comment by Daryl Guppy in this week's newsletter:



> Bargain hunters will get killed in this market.



GP


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## CanOz (17 August 2007)

GreatPig said:


> A comment by Daryl Guppy in this week's newsletter:
> 
> 
> GP




Hmmm, i must say i'm a little stunned...isn't anyone paying attention to whats happening? Look at the index, look at the USD/JPY..does it look like its going to head back up any time soon? Think of all those people trapped in stocks that will sell again, once they get a chance, *its called resistance*. 

We are not at highs anymore, we've got to get back through all of that bad sentiment before we ever, ever see them again!!! 

There will come a time to get back in, but this isn't over by a long shot, wake up people...Daryl Guppy is on the money with this call. If your not hedged and your still long then you'll be slaughtered.

Cheers,


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## pennystock (19 August 2007)

*Re: Bargin hunting?*



Ken said:


> The market is constantly moving, at the moment its moving south.
> 
> Who are we to disregard that?
> 
> ...




Good advice Ken...
MBL was $65 on October 2006 and was riding an uptrend quiet clearly. Now it is around $65 on a sliding southern chart, wait for the dust to settle, ok so we miss a few dollars hear and there not finding the bottom but hey charts almost never lie.


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## Ken (19 August 2007)

The market is expected to rise on monday by 200 points.

Dont be fooled straight into think MBL will be straight back to $97. 


It will take time to gain that sort of ground.  Trading wise $70 on the way up is better than on the way down....

So good luck.


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## wintermute (19 August 2007)

Well there are two ways to look at it IMO.  If you are certain about the current value of a stock (not easy) and are sure it is undervalued, then who cares if it goes a bit lower, if you would be happy to buy at the current level, provided of course it goes back up  (which if your analysis was correct it should). 

so say stock X is in your oppinion worth $10.00 and it drops to $7.00 the chart shows it is heading south big time (mainly because the market has gone into conniptions).. you see it drop to $6.50 but the chart is still horrible, but then it starts going up again.  Do you buy at $7.00 which you would have before... maybe it is a dead cat bounce?? better hold off, hmmm it has hit $7.50, maybe it will pullback again.  $8.00 hmmm probably a sign it is back on track, better buy now....

Now what was a more sensible choice, buy at $7.00 initially because you KNOW  the stock well, or rely on a chart that has been completely obliterated by blind panic?  

No one can ever know exactly what is going to happen next, I use charts for  setting buy or sell targets, but IMO in this environment you are better off using a weekly or monthly chart to try and work out where long term support is and pitch your bid there (rather than looking for signs of a turnaround), and wait for the panic to allow your bids to be filled  

That's my contrarian approach  

The bottom line is, that whilst stocks will get sold down during a panic, those that are fairly valued before the sell down, with strong fundamentals, should rise back to the top.  looking at just the index gives a false impression, not all stocks are affected equally during and after a correction  

Tony.


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## insider (20 August 2007)

I can't find real bargains... To me it looks like people are anticipating a sell off at the end of the day


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## nioka (20 August 2007)

nioka said:


> I believe I have bought some bargains in the last two days. AGM @ 50c, TAS @ 15c and ADI @ 52c. They may slip a little, it is hard and risky to get the very bottom but at these prices I believe I have value. This correction will certainly shake out a lot of uranium, nickel and iron ore hopefulls but the companies with a future will rebound quickly. That is my opinion anyway.




ADI up13% AGM up12% and best of all TAS up 40%. Buy Fridays sell Mondays or Tuesdays turns out good once again.


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## moXJO (20 August 2007)

Well I’m out for a tidy profit from the shares I bought on the lows last week and am now roughly 95% cash. Between that ,some written options ,and some well placed aud/usd shorts that I closed out and cashed in. I think I might go on holiday until this mess sorts itself out and a clearer picture emerges of just how bad it is.

I would have liked to buy and hold but don’t want to get caught in a market that will slowly drift down lower. A bit hard to tell what’s going to happen with all this volatility so bugger if I want to trade it atm.


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## nioka (20 August 2007)

insider said:


> I can't find real bargains... To me it looks like people are anticipating a sell off at the end of the day



The bargains were on Friday. but there are probably bargains today. The market hasn't risen all that much.


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