# Stock Market Crash - End of the Bull!



## Buffettology (1 April 2007)

Firstly, as the name says, I am a firm believer in Buffetts investment methadology.  For this, I currently need to see the end of this bull.

Companies are currently overvalued, and the market has been a bull market for the past few years.  Very similar to the 87 crash situation, the market was a bull market from 82-87 from the top of my head, a very similar length of time to the current climate.  However, baby boomers pouring invesment dollars into the market, trying to gain as large returns as they can before their retirements, is definately a factor of which will maintain a sturdy bull market for the near future.  

I have currently pulled all my funds out of the stock market, waiting for this bull to end, though I think we might see more of a flattening out of the market over the next year or two, as opposed to a drastic crash.  I would LOVE to see a crash, as these current bond returns I am receiving are pathetic when looking at the compounding rate of return over the next couple of years. 

What are your opinions on the current overheated market, and when do you think this could end?  Do you see a crash, or a flattening out?


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## sleeper88 (1 April 2007)

Why pull out all our money when there's still plenty of money still to be earned in the current market?


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## Buffettology (1 April 2007)

sleeper88 said:


> Why pull out all our money when there's still plenty of money still to be earned in the current market?




Well, I have not pulled ALL out, but the majority.  Why?  Because I believe this current run cannot be sustained, and hope to buy in at cheaper prices once it does end.  I only pulled out lately, and hope a crash or correction takes place ASAP, that is why I am asking opinions.....?`


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## Knobby22 (1 April 2007)

Valuations are high however not overly. 

The new super laws are causing millions to be poured into the market, interest rates aren't high and have a distance to rise yet. 

I don't think a crash is imminant, it is at least 9 months away (unless the US attacks Iran).


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## Buffettology (1 April 2007)

Yeah I agree Knobby, I was even thinking of getting back in for the time being.  

Very difficult situation.


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## mmmmining (1 April 2007)

We have a booming commodity sectors, and booming the rest which are related to commodity. Confusing, and even confusing me. 

ASX is commodity oriented exchange. The end of bull is when the end of commodity super cycle. 

According to experts like Jim Rogers, Jame Dines, Warwick Girgor, it is still at least 7 to 10 years away. I believe it, a lot of ASFers believe it too if you travel around world, wondering to a very poor place, and ask yourself, what if they want to live like us?

Of course, there are many corrections along the way. Some of them might be very painful.  but to seriously underweight equity investment might not be your best call.


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## Wysiwyg (1 April 2007)

Buffettology said:


> Yeah I agree Knobby, I was even thinking of getting back in for the time being.
> 
> Very difficult situation.




Confucius say....man who straddle electric fence have no balls.:nosympath


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## sleeper88 (1 April 2007)

Well I believe the fate of the ASX is in the hands of the chinese economy..if chinese economy shows significant signs of slowing down, then it will severely impact Australia's commodity sector and hence our shares. But in the mean time, the Chinese economy is still booming and shows no signs of slowing.


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## Glenhaven (1 April 2007)

The PE's are still not really out of line. As long as profits keep rising the market can sustain further rises.

The real risk with going to cash is that should the market keep rising then you have the problem of earing lower returns with no franking credits.


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## nioka (1 April 2007)

Think India, home of the sacred cow. Do you think they would let the bull die. India plus China plus the major factor, THE CASH WHICH KEEPS COMING FROM SUPER FUNDS (and the future fund).
Long live the bull


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## Freeballinginawetsuit (1 April 2007)

Hi Nioka,

Not really a big fan of India, thiers a reason they have Cows wondering around thier streets bashing in to 1950 model Morris's driven by telecentre marketers.............which has nothing to do with a propensity to shift global economies.

China on the other hand..........


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## Glenhaven (1 April 2007)

nioka said:


> Think India, home of the sacred cow. Do you think they would let the bull die. India plus China plus the major factor, THE CASH WHICH KEEPS COMING FROM SUPER FUNDS (and the future fund).
> Long live the bull




I agree that India is also a great place to invest, but every bull run has its fall. The questions are when will it occur and how big will it be. The thing that gives me more confidence is that the world seems to have the bust cycles much more under control. What I mean is that they the they are not as severe.

A 10% fall is really not an issue.


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## nioka (1 April 2007)

Freeballinginawetsuit said:


> Not really a big fan of India, thiers a reason they have Cows wondering around thier streets bashing in to 1950 model Morris's driven by telecentre marketers.............which has nothing to do with a propensity to shift global economies..




Think hithane. Think uranium. Think of all that cheap labour (including telecentre marketers) Think how USA wants them to be a buffer against the Muslim countries. You will see a lot more of India for a long time after I'm gone. They are about to roll.


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## Buffettology (1 April 2007)

nioka said:


> Think hithane. Think uranium. Think of all that cheap labour (including telecentre marketers) Think how USA wants them to be a buffer against the Muslim countries. You will see a lot more of India for a long time after I'm gone. They are about to roll.




India is certainly a contributor to the commodity boom, but not so much as China.  China does appear to be opening up its economy at a suitable rate also, closely monitored by their Government.  It does look relatively stable, and so their growth should continue.  Not to mention, super fund contributions to our market will definitely continue to roll in for the time being.  The market should continue to rise, but just looking at the trends alone, it is beginning to scare me!  A very shaky time in the invesment world I believe.  Might reconsider my position in a week or so, see how we go and if that psychological 6000 barrier is cracked and the market keeps trending upwards.


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## Freeballinginawetsuit (1 April 2007)

Sure Nioka, perhaps in years to come, but near term I only see them utilising thier own resources primarily..... with a propensity to import the shortfall. India at the present is nothing more than a heavily populated/ex colony with inefffective infrastructure and a less than capable government infrastructure barely able to manage a fart in a trance!.

The potential is thier though, but they have a long way to come. Long term it could add more fuel to the 'stronger for longer proponents'.

China on the other hand has near term investment of global manufacturer's and value adding industrialisation already in place. In fact any western/asian multi national on the ball, has already shifted manufacture/ISO standardised production, onshore to China.

Chinas come a long way in the last few years.....no longer just making trinkets. Recent centralized increase in foriegn business taxes just creates another footprint, enabling further internal Chinese growth.

Realistically if the US enters a slow economic death, It would seem logical that US manufactured consumer disposables would be the first to suffer.... as opposed to the cheaper ones manufactured by US companies in China.

I'm a firm believer that the US will always be the head, but China is likely to be the engine room (body) that fuels it, time will tell. Any which way you look at it, we are seeing a shift of global economies in our generation and something US businesses have no doubt already pondered. Australia is well placed IMO


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## nioka (1 April 2007)

Freeballinginawetsuit said:


> Sure Nioka, perhaps in years to come, but near term I only see them utilising thier own resources primarily..... with a propensity to import the shortfall. India at the present is nothing more than a heavily populated/ex colony with inefffective infrastructure and a less than capable government infrastructure barely able to manage a fart in a trance!.
> 
> The potential is thier though, but they have a long way to come. Long term it could add more fuel to the 'stronger for longer proponents'.




Agree but with qualifications. They will need our technology, look at the potential already being exploited by the likes of AOE and EDE whose SP is influenced by the move into India.They want Uranium and they will need clean coal technology ( if Aus companies can master it ).
I don't think it will be long term for Aussie companies, maybe long term for India itself.
ps. They even need an Aussie cricket coach.


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## misterS (1 April 2007)

I recall when Japan was said to be challenging the USA as the premier economic force in the world that the Japanese PM said that the "mongrel" race make-up in the US would keep them ahead because it is intrinsically more dynamic and flexible than what is essentially a monoculture.

Probably not the sort of remark you are likely to hear much these days, expressed so bluntly anyway, but the underlying premise retains some validity...although of course China is not a comparable "monoculture" by any means.


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## Freeballinginawetsuit (1 April 2007)

nioka said:


> Agree but with qualifications. They will need our technology, look at the potential already being exploited by the likes of AOE and EDE whose SP is influenced by the move into India.They want Uranium and they will need clean coal technology ( if Aus companies can master it ).
> I don't think it will be long term for Aussie companies, maybe long term for India itself.




Yep, see youre point  .

Chinas a funny one though......I mean.

Considering the yada on the global marketplace/free trade.... etc etc, the US are in a bit of a conundrum. Not only do they have heavy foriegn investment by business thier, but they can't really bully them with protective import tariff's.... if the US economy stagnated. ATM the US are playing fun and games with paper importers from China but no US offshore manufacturers are involved LOL.

I mean the last country the US would have wanted to have this situation with would be China.


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## ROE (1 April 2007)

Buffettology said:


> Firstly, as the name says, I am a firm believer in Buffetts investment methadology.  For this, I currently need to see the end of this bull.
> 
> Companies are currently overvalued, and the market has been a bull market for the past few years.  Very similar to the 87 crash situation, the market was a bull market from 82-87 from the top of my head, a very similar length of time to the current climate.  However, baby boomers pouring invesment dollars into the market, trying to gain as large returns as they can before their retirements, is definately a factor of which will maintain a sturdy bull market for the near future.
> 
> ...




The trouble with market timing is no one ever get them correct..
look at it this way, you think bull run going to end, you pull out now
what if the doom day never came and it slowly chucking along maybe not 20-30% but 10% or 15% for the next few years or could be more 
you could miss out.....on the other side if you are correct you can come back in at a lower price, so it's really 50%/50% chance

There are still some bargain stocks around if you look hard enough 
I'm not too worry about bull and bear market.. I just look for good stock at bargain price and buy them with a margin of safety.. I let Bull and Bear fight it other out....

I'm still in 100% don't care if bull or bear run for the next 30 years...

I found one bargain last week and tomorrow I'm putting in another order for another bargain


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## vishalt (1 April 2007)

This boom is different though.. this boom is about the long term development & evolution of two of the most populated countries in the world. It's not like the tech bubble where stock prices went up and profits went down.. 2billion + people need all these raw materials, financial services, oil, gas, petrol, water, you name it to upgrade their infrastructure to what we're use to in the West.


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## nioka (1 April 2007)

Freeballinginawetsuit said:


> I mean the last country the US would have wanted to have this situation with would be China.




I have a nephew who was an exchange student in India years ago. Has a lot of time for them. They are english speaking, which makes doing business easier. 
 With regards to the USA/China relationship I think the India buffer applies there as well. I am looking at investing in more companies who will be operating in India. Maybe we should have a new thread " India - the bull calf"


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## Freeballinginawetsuit (1 April 2007)

misterS said:


> I recall when Japan was said to be challenging the USA as the premier economic force in the world that the Japanese PM said that the "mongrel" race make-up in the US would keep them ahead because it is intrinsically more dynamic and flexible than what is essentially a monoculture.
> 
> Probably not the sort of remark you are likely to hear much these days, expressed so bluntly anyway, but the underlying premise retains some validity...although of course China is not a comparable "monoculture" by any means.




Japan never had the economies of scale of China, nore the resources, global marketplace, foriegn investment, accesibility to infrastructure/ tecnology etc. In fact Japans industrialisation would have come much sooner, if it had the resources to fuel the fire without the need to land grab necissating WW2 in the Pacific. The US has had its thumb on Japan since .

Post 'Isolation Policy' the US have thumbed many emerging economies, this time around with China the scenario is all to clear, not only can they not thumb it.........they have to invest in it for thier own survival. Being the greedy pig of free enterprise they are,  invest heavily they will!.


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## nioka (1 April 2007)

ROE said:


> I found one bargain last week and tomorrow I'm putting in another order for another bargain




Any hot tip for tomorrow?


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## Freeballinginawetsuit (1 April 2007)

nioka said:


> I have a nephew who was an exchange student in India years ago. Has a lot of time for them. They are english speaking, which makes doing business easier.
> With regards to the USA/China relationship I think the India buffer applies there as well. I am looking at investing in more companies who will be operating in India. Maybe we should have a new thread " India - the bull calf"




I have only been to India once Nioka (93) and it was an experience...........lovely culture and people, but a culture shock indeed.

I sat on an internal flight next to a guy who was sweating profusely with no deoderant on and holding a bunch of smelly dead flowers.........I won't even mention the 'herded like cattle', train trips.


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## ducati916 (2 April 2007)

vishalt said:


> This boom is different though.. this boom is about the long term development & evolution of two of the most populated countries in the world. It's not like the tech bubble where stock prices went up and profits went down.. 2billion + people need all these raw materials, financial services, oil, gas, petrol, water, you name it to upgrade their infrastructure to what we're use to in the West.





There it is, the, *"This time it's different"* quote.
The top is nigh.

jog on
d998


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## Glenhaven (2 April 2007)

vishalt said:


> This boom is different though.. this boom is about the long term development & evolution of two of the most populated countries in the world. It's not like the tech bubble where stock prices went up and profits went down.. 2billion + people need all these raw materials, financial services, oil, gas, petrol, water, you name it to upgrade their infrastructure to what we're use to in the West.




In every boom people believe its different and thats why they get caught. You are right it's different, but every boom overshoots and then falls back to fair value, actually because of panic it falls below fair value.


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## ROE (2 April 2007)

nioka said:


> Any hot tip for tomorrow?




I think IFM is pretty good at current price (0.69 cents) ...check for yourself thought..
Awesome profit margin, very little debt, very high rate of return on equity..

I like PFL too at current price (1.65) ..new stock but people still eat pies at all the football matches and at home 
and potential of capturing the US market is money making machine if they can convince the American
meat pie is a pie with meat not pie with with stuffed apple


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## Buffettology (2 April 2007)

Glenhaven said:


> In every boom people believe its different and thats why they get caught. You are right it's different, but every boom overshoots and then falls back to fair value, actually because of panic it falls below fair value.




Exactly!

The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.  

Though, China seems to be doing very well at managing their growth so that it is sustainable in the long-term.  We may just see an upward trend in the market for a couple of years yet, but no doubt we will see a crash, or at least a VERY LARGE correction over the next couple of years I beleive.  

Might bump up to 50% of my portfolio in stocks, just to neutralise the risk.


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## michael_selway (2 April 2007)

Buffettology said:


> Well, I have not pulled ALL out, but the majority.  Why?  Because I believe this current run cannot be sustained, and hope to buy in at cheaper prices once it does end.  I only pulled out lately, and hope a crash or correction takes place ASAP, that is why I am asking opinions.....?`




Coal Stocks are not overpriced

CEY, MCC, GCL, RSP, FLX, etc

thx

MS


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## Glenhaven (2 April 2007)

Buffettology said:


> Exactly!
> 
> The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.
> 
> ...




I am watching PE ratios closely to see if they get too high then I will move more to cash as you suggest. In the meanwhile the opportunity cost if you have too much cash in a rising market is an issue.

The other think people forget is their superannuation funds. Depending on what you have you could lose more on your super than on your direct share investments.  You can of course make these a more defensive mix as well.


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## Buffettology (2 April 2007)

Glenhaven said:


> I am watching PE ratios closely to see if they get too high then I will move more to cash as you suggest. In the meanwhile the opportunity cost if you have too much cash in a rising market is an issue.
> 
> The other think people forget is their superannuation funds. Depending on what you have you could lose more on your super than on your direct share investments.  You can of course make these a more defensive mix as well.




Yeh, how do you define a high PE ratio?  What would it have to get to before you would withdraw?  

I currently have a far larger amount to invest than I do in super, probably 30 fold, so its definitely my direct share investments I am worried about.


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## Buffettology (2 April 2007)

michael_selway said:


> Coal Stocks are not overpriced
> 
> CEY, MCC, GCL, RSP, FLX, etc
> 
> ...




You think Coal will maintain a high return over several years?  I am more into long-term investments than short-sighted trading.  Hence, my need for a crash/large correction to find undervalued, solid companies again.  Most seem to be through the roof at the moment, I am talking Woolworthes, JB Hi-Fi etc.


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## Wysiwyg (2 April 2007)

Buffettology said:


> Exactly!
> 
> The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.
> 
> ...




Dear Mr. Bluffettology.....Since you have no idea what the markets will do (and neither do I) maybe a question mark at the end of the thread opener would be more appropriate.   :axt:


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## Buffettology (2 April 2007)

Wysiwyg said:


> Dear Mr. Bluffettology.....Since you have no idea what the markets will do (and neither do I) maybe a question mark at the end of the thread opener would be more appropriate.   :axt:




Obviously, that is why I stated opinions.

No need for sarcasm.  It is a very interesting topic though, and one that is debated by numerous experts, why not begin discussion on the topic on this forum.


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## Wysiwyg (2 April 2007)

Buffettology said:


> Obviously, that is why I stated opinions.
> 
> No need for sarcasm.  It is a very interesting topic though, and one that is debated by numerous experts, why not begin discussion on the topic on this forum.




Post is not sarcastic and I mean what I say.You have no idea.A question is what you ask.


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## wayneL (2 April 2007)

FWIW

Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.

I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - _"Goldilocks has left the building"._


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## Freeballinginawetsuit (2 April 2007)

wayneL said:


> FWIW
> 
> Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.
> 
> I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - _"Goldilocks has left the building"._




Yep corn not looking to flash 

*Corn futures dropped more than 5% Friday -- the maximum price movement allowed for the contracts on the Chicago Board of Trade -- after the U.S. Department of Agriculture said it expects U.S. farmers to plant about 15% more corn acres than last year, as farmers take advantage of market demand for corn-based ethanol.*
The annual USDA prospective plantings survey showed farmers intending to use 90.45 million acres for corn, above the 88 million acres predicted by analysts. 
The data set "the stage for a rebuilding of depleted corn inventories and a subsequent reduction in corn prices during the fall of 2007," David Driscoll, an analyst at Citigroup, said in a research note Friday. 
'The USDA's Plantings report sets the stage for a rebuilding of depleted corn inventories and a subsequent reduction in corn prices during the fall of 2007.'
— David Driscoll, Citigroup

Against this backdrop, corn for May delivery dropped 20 cents, or 5.1%, to settle at $3.74 1/2 a bushel in Chicago. Trading was halted at that level because that's the exchange's daily price move limit. The contract hasn't traded at a level that low since Jan. 10. 
The intended plantings would be a record number, according to Darin Newsom, an analyst at Omaha, Nebraska-based DTN. "But it doesn't mean anything," he said. Other analysts say the figure would be the largest since the 1940s. 
"Production is also expected to be a record (theoretically), but ending stocks should still drop," he said. 
Tim Hannagan, a grains analyst at Alaron Trading, said it best: "Come Monday, the trade will say it is not what you plant, but wheat you grow." 
"A drought from mid-June to July 25th -- key yield development time -- could reduce yields sharply enough to void the current bearish acreage number," he said in a note to clients. 
At 90.45 million acres planted and about 81.4 million acres harvested, using the trend-line yield of 153.1, that would mean production of about 12.5 billion bushels, said Newsom in e-mailed comments. 
"That would just cover, if not still lose ground to the expected growth in demand in 2007-2008 -- meaning ending stocks could decrease despite record production," he explained. 
So overall, the plantings number could be viewed as bearish for corn prices, but the final number of plantings will depend heavily on weather in the Midwest, which has endured rainstorms that lead to less corn planting, he said. 
Another thing for traders to consider is whether the plantings report will discourage some from actually planting as much corn as they earlier intended, said Todd Hultman, president of DailyFutures.com, in his Web site commentary. 
The 2007 USDA survey also showed farmers planned 67.14 million acres of soybeans, down from 76.9 million planned in the previous survey. See the full report.


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## Glenhaven (2 April 2007)

Buffettology said:


> Yeh, how do you define a high PE ratio?  What would it have to get to before you would withdraw?
> 
> I currently have a far larger amount to invest than I do in super, probably 30 fold, so its definatley my direct share investments I am worried about.




I look at historical PE's. One think to note is that Australian PE's generally been lower than world PE's and lately they have risen to be at a premium. This would usually be of concern for the strengh of the Australian market, however, it has in large part been driven by the resources boom.


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## Glenhaven (2 April 2007)

wayneL said:


> FWIW
> 
> Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.
> 
> I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - _"Goldilocks has left the building"._




Do I assume from the response of Freeballinginawetsuit that you are in the corn market??


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## wayneL (2 April 2007)

Glenhaven said:


> Do I assume from the response of Freeballinginawetsuit that you are in the corn market??




That's just one market I trade. Unless specified, I mean the US stock market.


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## wayneL (2 April 2007)

Freeballinginawetsuit said:


> Yep corn not looking to flash
> 
> *Corn futures dropped more than 5% Friday -- the maximum price movement allowed for the contracts on the Chicago Board of Trade -- after the U.S. Department of Agriculture said it expects U.S. farmers to plant about 15% more corn acres than last year, as farmers take advantage of market demand for corn-based ethanol.*
> The annual USDA prospective plantings survey showed farmers intending to use 90.45 million acres for corn, above the 88 million acres predicted by analysts.
> ...




It's also limit down (20c) today in the electro market. I had a short position I closed before the report was released too. Damn!! But could have easily gone the other way and locked futures markets are only fun if your on the right side... terrifying otherwise.


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## Buffettology (2 April 2007)

Wysiwyg said:


> Post is not sarcastic and I mean what I say.You have no idea.A question is what you ask.




If a market is 100% unpredictable, then why so does the Federal Government and RBA involve themselves in Fiscal and Monetary policy?  Certainly a mix of numerous factors to predict turnarounds, and very complex, especially once factoring in time-lags to the equation (this especially true with Fiscal Policy), however, Fiscal and Monetary policy have prooven effective in Australia, I have studied this in depth, both trends, and impacts of time-lags, and no doubt, a market is always somewhat predictable.  Not to the exact timing and magnititue, but an educated estimate is more reliable than a guess.


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## michael_selway (2 April 2007)

Buffettology said:


> You think Coal will maintain a high return over several years?  I am more into long-term investments than short-sighted trading.  Hence, my need for a crash/large correction to find undervalued, solid companies again.  Most seem to be through the roof at the moment, I am talking Woolworthes, JB Hi-Fi etc.




Hi Buffet yes coal is good fo rthe long term, and at current prices, its good value







Look at coal price above as well

Also the yield is pretty good (low PE) 

Isnt that what u are looking for?

thx

MS


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## dhukka (2 April 2007)

ROE said:


> *
> I'm not too worry about bull and bear market.. I just look for good stock at bargain price and buy them with a margin of safety*.. I let Bull and Bear fight it other out....
> 
> I'm still in 100% don't care if bull or bear run for the next 30 years...
> ...




Wise words ROE, its re-assuring to know you are invested in good businesses at reasonable prices to ensure a margin of safety. No need for all this scurrying about trying to predict market tops and bottoms. Just sit back, keep accumulating the bargains and enjoy the ride.


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## Freeballinginawetsuit (2 April 2007)

wayneL said:


> It's also limit down (20c) today in the electro market. I had a short position I closed before the report was released too. Damn!! But could have easily gone the other way and locked futures markets are only fun if your on the right side... terrifying otherwise.





Yeah I had a bit of a squizz into Corn on the weekend, certainly up youre alley I would hazard a guess.

Gaining a sound forward view through fundamentals would have as much chance of success as the weatherman presenting a 3 month forecast . I guess thats the conundrum farmers are presented with each season, with the hazards speculated on the commodities futures. 

You certainly aren't risk adverse Wayne..........perfect commodity for you!. Kudos

I bet you would like to speculate on banana's  in cyclone season............. is thier such a thing as banana traders/market?


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## Buffettology (2 April 2007)

dhukka said:


> Wise words ROE, its re-assuring to know you are invested in good businesses at reasonable prices to ensure a margin of safety. No need for all this scurrying about trying to predict market tops and bottoms. Just sit back, keep accumulating the bargains and enjoy the ride.




I agree, wise words, though I have to say, it is VERY hard to find solid, undervalued stocks at good prices at the moment.  

I will take a good look at that tip of yours ROE on the wkend.  Cheers.


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## Buffettology (2 April 2007)

michael_selway said:


> Hi Buffet yes coal is good fo rthe long term, and at current prices, its good value
> 
> 
> 
> ...




Thanks Michael.  I havent looked at any of the resources sector (other than BHP), as I usually stick to the strong companies of which I know a lot about.  Following my name, I do not invest in the current craze.  Though, if the fundamentals are sound, and the company is a good price, I would definately consider.  Will have to take a better look at Coal when I get some more free time.  Budget coming up and I am being run off my feet!


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## Wysiwyg (2 April 2007)

Buffettology said:


> If a market is 100% unpredictable, then why so does the Federal Government and RBA involve themselves in Fiscal and Monetary policy?  Certainly a mix of numerous factors to predict turnarounds, and very complex, especially once factoring in time-lags to the equation (this especially true with Fiscal Policy), however, Fiscal and Monetary policy have prooven effective in Australia, I have studied this in depth, both trends, and impacts of time-lags, and no doubt, a market is always somewhat predictable.  Not to the exact timing and magnititue, but an educated estimate is more reliable than a guess.





No worries Buff....I see where you are coming from.Despite my directness I enjoy this forum and contributions.

 I have one Four letter word :bayer: that I should use more often though and that is .... K.I.S.S. 

P.S. I t must be getting closer...more want it to happen.


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## wayneL (2 April 2007)

Freeballinginawetsuit said:


> Yeah I had a bit of a squizz into Corn on the weekend, certainly up youre alley I would hazard a guess.
> 
> Gaining a sound forward view through fundamentals would have as much chance of success as the weatherman presenting a 3 month forecast . I guess thats the conundrum farmers are presented with each season, with the hazards speculated on the commodities futures.
> 
> ...



No bananas Lol

There is a sugar market... and orange juice. These can be affected by cyclones. Have a look at orange juice over the last two years, caused by shortages due to hurricanes in the US.

Re risk: Well I have a watchful eye on the underlying value of what I'm trading. I'll never do a Larry Williams and turn 10k into a mil in a year or whatever, but I'll never go down in flames either. 

People in ag futures go out in spectacular fashion because they over-leverage themselves. They focus on margin rather than underlying face value and volatility.

This move has been locked for the value of $2,000 per contract so far. Imagine being on the wrong side of this with too many contracts. Megadeath LOL

Not this little black duck


----------



## dhukka (2 April 2007)

Buffettology said:


> I agree, wise words, though I have to say, it is VERY hard to find solid, undervalued stocks at good prices at the moment.
> 
> I will take a good look at that tip of yours ROE on the wkend.  Cheers.





Agreed B, very difficult to find undervalued companies in this market. I don't agree with ROE's selections in this thread but I definitely subscribe to his investment philosophy.


----------



## Buffettology (2 April 2007)

Wysiwyg said:


> No worries Buff....I see where you are coming from.Despite my directness I enjoy this forum and contributions.
> 
> I have one Four letter word :bayer: that I should use more often though and that is .... K.I.S.S.
> 
> P.S. I t must be getting closer...more want it to happen.




Cheers.

It is no doubt getting closer, interest rates are expected to rise, there is a heap of cash out there and I cant remember which thread, but there was one with a picture of a house of cards made of credit, built on top of a rug, with a man at the door saying "im here to collect the rug".  Thats how I see it.  Rising inflation, rising (or at least expected IR), something has to give.  Not to mention, the market is overvalued, and based on trends, this cannot be sustained.  All it takes is for a bit of fear to creep in, and the market could suffer greatly.  Ultimately it will rise, but a crash or at least large correction, IMHO is on its way.  I would also bet it would be within 2 years, the sooner the better.  The commodity boom and super contributions might push the timeframe of a correction out a bit, but it will happen.  Worth the wait (I hope), at least for a long-term investor such as myself.


----------



## ROE (2 April 2007)

dhukka said:


> Agreed B, very difficult to find undervalued companies in this market. I don't agree with ROE's selections in this thread but I definitely subscribe to his investment philosophy.




That's cool everyone is entitle to their own research and opinion and everyone should be doing that before weighting or listening to other people


----------



## Smurf1976 (2 April 2007)

Freeballinginawetsuit said:


> Yep corn not looking to flash
> 
> *Corn futures dropped more than 5% Friday -- the maximum price movement allowed for the contracts on the Chicago Board of Trade -- after the U.S. Department of Agriculture said it expects U.S. farmers to plant about 15% more corn acres than last year, as farmers take advantage of market demand for corn-based ethanol.*



Which means they'll be planting less of something else unless we're about to see a signficant expansion of US agriculture overall in the next few months. Such rapid overall growth in total agriculture seems somewhat unlikely for an already developed industry in a highly developed country IMO.


----------



## Freeballinginawetsuit (2 April 2007)

Smurf1976 said:


> Which means they'll be planting less of something else unless we're about to see a signficant expansion of US agriculture overall in the next few months. Such rapid overall growth in total agriculture seems somewhat unlikely for an already developed industry in a highly developed country IMO.




Maybe they didnt plant that much last year due to weather at seeding/ maybe they crop rotate and its corns turn this time.......maybe like Oz the minnows are getting swallowed and its simple economies of scale for the big boys...........I'm Srgt Shultz on Agriculture.

Ill leave it to Wayne's World, way out of my turf.


----------



## TheRage (4 April 2007)

ROE said:


> That's cool everyone is entitle to their own research and opinion and everyone should be doing that before weighting or listening to other people




I think it takes a lot of courage these days to actually give specific examples on undervalued companies good on you. I have often wondered why there is not a thread on undervalued stocks like the breakout thread for the tech guys where these stocks are identified based on certain criteria.


----------



## wayneL (4 April 2007)

TheRage said:


> I think it takes a lot of courage these days to actually give specific examples on undervalued companies good on you. I have often wondered why there is not a thread on undervalued stocks like the breakout thread for the tech guys where these stocks are identified based on certain criteria.



That's a great idea TheRage!

You or somebody else into value investing should start one.

Cheers


----------



## Buffettology (4 April 2007)

wayneL said:


> That's a great idea TheRage!
> 
> You or somebody else into value investing should start one.
> 
> Cheers




I agree, the only trouble is, currently I cannot find an undervalued company (with sound fundamentals).  At least, not in the areas I am looking (Coal was stated earlier, but thats not an area I have an overly large knowledge of).


----------



## purple (12 April 2007)

Buffettology said:


> I agree, the only trouble is, currently I cannot find an undervalued company (with sound fundamentals).




undervalued...
difficult to find at this present moment. yep, probably the only way to find undervalued stocks is to wait for the crash....or pick up some penny stocks.


----------



## Knobby22 (12 April 2007)

ROE said:


> The trouble with market timing is no one ever get them correct..
> look at it this way, you think bull run going to end, you pull out now
> what if the doom day never came and it slowly chucking along maybe not 20-30% but 10% or 15% for the next few years or could be more
> you could miss out.....on the other side if you are correct you can come back in at a lower price, so it's really 50%/50% chance
> ...





If you miss the three worst crashes in you lifetime you will make 3 times the money. As a small investor you should aim to miss them.You do this buy selling out when fundamentals are too stretched and maybe do a bit of technical analysis.


----------



## >Apocalypto< (12 April 2007)

Freeballinginawetsuit said:


> Yep corn not looking to flash
> 
> *Corn futures dropped more than 5% Friday -- the maximum price movement allowed for the contracts on the Chicago Board of Trade -- after the U.S. Department of Agriculture said it expects U.S. farmers to plant about 15% more corn acres than last year, as farmers take advantage of market demand for corn-based ethanol.*
> The annual USDA prospective plantings survey showed farmers intending to use 90.45 million acres for corn, above the 88 million acres predicted by analysts.
> ...




Freeballing,

Futures are a amazing thing!

they scare and fascinate me, they are my final frontier.

did you see the other month back where corn started that rally. they are just freaking mass power behind the sells and buys.

I spoke to a guy at Xpresstrade he told me they dont go limit up or down to often, as waynel said you don't want to be on the wrong side of a limit >SCARY<.


----------



## hangseng (12 April 2007)

Buffettology said:


> I agree, the only trouble is, currently I cannot find an undervalued company (with sound fundamentals).  At least, not in the areas I am looking (Coal was stated earlier, but thats not an area I have an overly large knowledge of).




Have a very close analysis of Anglo Australian Resources (AAR). Not a Uranium stock and probably why it has gone under the sights of most.

At a market capitalisation of $27m, no debt, large cash and gold reserves, unsold gold from the last pour, funding a PFS for an excellent Zinc deposit at Koongie Park and self funded. No capital raisings just gold production and with gold and Zinc prices rising.

You want sound fundamentals and undervalued, then this is it without question in my view.


----------



## >Apocalypto< (12 April 2007)

Buffettology said:


> Firstly, as the name says, I am a firm believer in Buffetts investment methadology.  For this, I currently need to see the end of this bull.
> 
> Companies are currently overvalued, and the market has been a bull market for the past few years.  Very similar to the 87 crash situation, the market was a bull market from 82-87 from the top of my head, a very similar length of time to the current climate.  However, baby boomers pouring invesment dollars into the market, trying to gain as large returns as they can before their retirements, is definately a factor of which will maintain a sturdy bull market for the near future.
> 
> ...





One point to think about Buffettology.

This time in 2005 where people thinking that companies were over valued? so what makes them overvalued now? In 1 year from now you could be saying jeez i wish i bought in 07 they were much less value then. A share is only worth what a market is prepared to pay for it, regardless of what individuals think of its value.

Why would any one want a market destroying crash?

If that occurred the market could go sideways for years with investor confidence shot! and if it is not making a wide range then it is also no good for traders. 

From what i see on the monthly XAO there is a posiblity that we could lose up to 50% and still have a healthy trend. That retracment could also pan out over a year or more and does not mean a 90 degree drop it may slowly drop down for that time span or more who knows (now I am just speculating blind). 

So I for one hope that is the case and this bull market does not end anytime soon.

I would find it sad to see a mass panic and it ending in some kind of huge crash.

I guess a lot of it comes down to weather the US hits a recession and how bad the negative influence is and lasts.


----------



## Buffettology (12 April 2007)

hangseng said:


> Have a very close analysis of Anglo Australian Resources (AAR). Not a Uranium stock and probably why it has gone under the sights of most.
> 
> At a market capitalisation of $27m, no debt, large cash and gold reserves, unsold gold from the last pour, funding a PFS for an excellent Zinc deposit at Koongie Park and self funded. No capital raisings just gold production and with gold and Zinc prices rising.
> 
> You want sound fundamentals and undervalued, then this is it without question in my view.




Thanks, I will take a look at it when I get some time.  I am a bit cautious of resources however, as I am not overly knowledgable in the area, and they are manipulated a bit much by prices of the resources, which can change a lot easier than that of general products.  Will take a look though, its definately an area I have been thinking about lately, due to my inability to find any other undervalued stock out there.  One I dont mind ATM though, is CAM.

P.S  One of ROE (I think it was) tips rose over 5% today.  Not bad at all.  Maybe those pies are hitting taking off in the US


----------



## Buffettology (12 April 2007)

Trade_It said:


> One point to think about Buffettology.
> 
> This time in 2005 where people thinking that companies were over valued? so what makes them overvalued now? In 1 year from now you could be saying jeez i wish i bought in 07 they were much less value then. A share is only worth what a market is prepared to pay for it, regardless of what individuals think of its value.
> 
> ...




I can see your point, and I agree, it may not be a quick crash and then an instant bounce back, we may see a crash that takes a year or more before it starts moving back upwards.  The thing is, for my kind of investing (value investing), this is still much better than a continuation of this bull market.  I just need to get a solid company, at a good price, and then hold it.  I have done a lot more analysis on this since this post, and I estimate it will be in the last quarter of this year.

Reasons, inflation figures are announced April 24 I beleive, a relatively high rate will probably mean an IR rise in May.  This will push up the dollar, make our exports more expensive, and incrementally slow the commodity boom.  

Further, this IR rise, will not be seen in the indicators until later in the year.  By this time, (from what I have read), it is expected the US will announced poor economic figures.  

Combined, and the fact that the market will probably rise until the end of the year also, I can see this triggering a panic in the market, and beginning a crash.  This is just speculation, but if these things pan out, I would not be surprised to see this scenario pan out.  

Thanks.

P.S  Of course, the Chinese indicators will also play a factor, but these are a bit unpredictable still.


----------



## >Apocalypto< (12 April 2007)

Buffettology said:


> I can see your point, and I agree, it may not be a quick crash and then an instant bounce back, we may see a crash that takes a year or more before it starts moving back upwards.  The thing is, for my kind of investing (value investing), this is still much better than a continuation of this bull market.  I just need to get a solid company, at a good price, and then hold it.  I have done a lot more analysis on this since this post, and I estimate it will be in the last quarter of this year.
> 
> Reasons, inflation figures are announced April 24 I beleive, a relatively high rate will probably mean an IR rise in May.  This will push up the dollar, make our exports more expensive, and incrementally slow the commodity boom.
> 
> ...




some very interesting food for thought there, greatly enjoyed that thanks. Great to see your putting dates in.

I am also on your side of some sought of drop coming sooner then later but i am unable to determine when from my analysis, but i will be able to see it when it comes.

Hope your right on the Aussie dollar cuz i am long on it and hungry to add more as long as it says so.  

one point, does warrant a possible crash is us aussies at the moment are so enthusiastic as investors and we are in a buying frenzy, I see we are at times ignoring wall streets lead and still it driving up! (not 100% sure if that is good or bad)

when the turn dose come and people realize it is bigger then may 06 and April 05 it could start a middle trend position holders getting jumpy and bailing out.

but again that is my speculation.

China will feel the pinch a little if there is a global slow down, but with china you have to remember they have a local market of 1.3 billion so they will be able to soak up a lot of it.

interesting times.

I take it as it comes, great if it does keep up at this pace till next year.


----------



## CanOz (12 April 2007)

Buffettology said:


> I can see your point, and I agree, it may not be a quick crash and then an instant bounce back, we may see a crash that takes a year or more before it starts moving back upwards.  The thing is, for my kind of investing (value investing), this is still much better than a continuation of this bull market.  I just need to get a solid company, at a good price, and then hold it.  I have done a lot more analysis on this since this post, and I estimate it will be in the last quarter of this year.
> 
> Reasons, inflation figures are announced April 24 I beleive, a relatively high rate will probably mean an IR rise in May.  This will push up the dollar, make our exports more expensive, and incrementally slow the commodity boom.
> 
> ...




Don't forget about that slippery issue of oil and related energy prices...and grains, they all add up for inflation. Might get a good energy boom for a short period though, until that effects demand.

Cheers,


----------



## Wysiwyg (16 April 2007)

After doing my pleasurable browse through the various forums I notice a lot of `excited` posts coming in.Mostly newer posters expressing their excitement at the present increases.
What does mean to you in regards to red days?


----------



## x2rider (16 April 2007)

Hi folks 

 I think you can usually find that when the average joe blow in the street is starting to talk about the stock market and " I'm putting all I can at the moment into it " , Is the forerunner to a correction of reasonable proportions .  
 They all get stung really hard and walk around for the next few years telling everyone what a fool they are for "gambling " in the market.

I have been scaling back my trading and am only trading the indexs at the moment . There is enough money to be made in this and a lot easier to get out when you have to . 

 Cheers martin


----------



## Buffettology (17 April 2007)

CanOz said:


> Don't forget about that slippery issue of oil and related energy prices...and grains, they all add up for inflation. Might get a good energy boom for a short period though, until that effects demand.
> 
> Cheers,




Definately havent forgot about those.  Oil prices though appear stable in the short-term.  Though, I dont like the fact that Demand has nearly caught Supply, and this will only get worse with high growth rates in both China and India.  

I personally, think its labour market inflation thats the immediate problem (I know at least where I work, salaries are rising to attract and retain skilled labour).  Banana prices have fallen, and imported inflation should fall with our rising dollar.  So I would not be overly surprised to see the RBA hit its target rate and leave IR unchanged in May.  Though, I personally hope the opposite.

I will have to have a chat with our macroeconomic indicator specialist tomorrow and see his opinion.  All he deals with all day long are macro indicators, so he should have some deep knowledge.


----------



## nizar (17 April 2007)

Buffettology said:


> I can see your point, and I agree, it may not be a quick crash and then an instant bounce back, we may see a crash that takes a year or more before it starts moving back upwards.  The thing is, for my kind of investing (value investing), this is still much better than a continuation of this bull market.  I just need to get a solid company, at a good price, and then hold it.  I have done a lot more analysis on this since this post, and I estimate it will be in the last quarter of this year.
> 
> Reasons, inflation figures are announced April 24 I beleive, a relatively high rate will probably mean an IR rise in May.  This will push up the dollar, make our exports more expensive, and incrementally slow the commodity boom.
> 
> ...





Buffet.
Note the RBA raised rates 3 times last year. Didnt seem to effect the market that much.


----------



## Buffettology (18 April 2007)

nizar said:


> Buffet.
> Note the RBA raised rates 3 times last year. Didnt seem to effect the market that much.




But a slowdown in the US was not expected the same time this effect of an increased IR would be seen at home.  

Not to mention, the market seems very strange at the moment and at least to me, seems far more unstable than it did last year.  

I dont think an IR rise will see an immediate impact (a small fall in the index of course), but I see it bouncing back relatively quickly.


----------



## astroboydivx (18 April 2007)

In mid 2005 my wife and I sold our PPOR, and went hardcore into shares via a margin loan.

We took our $300k and borrowed $300k in a margin loan and away we went.

By this stage, the sharemarket was hovering I think around 4000 points, and there were concerns that it was reaching it's peak from the March 2003 Iraq War trough. From memory it went as low as 2800 around this time. People were wondering how far the bull had to go.

But we invested nonetheless and I don't need to remind you guys that we've now hit 6200.

The $300 000 is worth $550 000, and whilst there are some froth and bubbles out there, I think the trend will continue to 8000 before the bear comes to town. Probably 18 months away.


----------



## Kimosabi (18 April 2007)

astroboydivx said:


> In mid 2005 my wife and I sold our PPOR, and went hardcore into shares via a margin loan.
> 
> We took our $300k and borrowed $300k in a margin loan and away we went.
> 
> ...




I hope you have a good exit strategy planned and are prepared to pull the trigger when you have to.


----------



## Buffettology (18 April 2007)

Kimosabi said:


> I hope you have a good exit strategy planned and are prepared to pull the trigger when you have to.




I hope so too, where is your logic that the bull will not end?  Are you just a massive risk taker, or do you have some kind of knowledge to beleive it will hit 8000?  I hate to say it, but I honestly beleive you are kidding yourself!  If it hits 8000 all the best for you, but I cannot see it happening within 18 months.  Who knows, I may be wrong.


----------



## Kimosabi (18 April 2007)

Well, at least they didn't put their money in Westpoint or Fincorp.


----------



## astroboydivx (19 April 2007)

Kimosabi said:


> Well, at least they didn't put their money in Westpoint or Fincorp.




Eh, thanks.  
Yes Kimosabi I'm just an uneducated fool...


----------



## astroboydivx (19 April 2007)

Buffettology said:


> I hope so too, where is your logic that the bull will not end?  Are you just a massive risk taker, or do you have some kind of knowledge to beleive it will hit 8000?  I hate to say it, but I honestly beleive you are kidding yourself!  If it hits 8000 all the best for you, but I cannot see it happening within 18 months.  Who knows, I may be wrong.




And I could be wrong too. Who really knows. In fact in saying 8000 I was being a little devilish to stir some bears but I think 7000+ is a reasonable expectation. That's 10% p.a over the next 18 months.

Valuations are 17 times next years earnings, the IMF is reporting growth in the world economy of 4.9% p.a over the next 2 years. There's still blue sky on the horizon.

Yes we need to watch the USA to see if they'll hit a recession, and yes we need to keep an eye on valuations, but whilst things have been strong we are not in a bubble. Yet.

I don't plan to exit the market (ever), because I plan on holding these stocks through my trust for the next 100 years and will therefore be relying on their dividends and growth for my retirement.

However I have various investments inc residential real estate, listed property trusts and international managed funds to spread risk around.


----------



## YOUNG_TRADER (19 April 2007)

astroboydivx said:


> I don't plan to exit the market (ever), because *I plan on holding these stocks through my trust for the next 100 years* and will therefore be relying on their dividends and growth for my retirement.




You have any investment in a fountain of youth? How long do you plan on living for 130yrs 150yrs? :


----------



## astroboydivx (19 April 2007)

Correction: my trust will hold them for the next 100 years. Or 75 years. Whatever the maximum age of a trust is


----------



## dhukka (19 April 2007)

astroboydivx said:


> Valuations are 17 times next years earnings,




Valuations or prices?


----------



## Buffettology (19 April 2007)

dhukka said:


> Valuations or prices?




Must mean prices.

IMF has predicted a slowdown in the world economy, not exactly bad, but not exactly blue skies.

The Chinese index is a bubble, and a burst would lead to a severe economic crisis, from the reports I am reading of invested funds into their index.  

The US economy, this is a very grey area, I am hearing mixed reports and outlooks on their economy.

The Australian market is overvalued, no doubt, a correction is on its way.  I just hope sooner than later, though I have put a bit more of my portfolio back out there, though that may only be short lived.


----------



## Buffettology (19 April 2007)

nizar said:


> Buffet.
> Note the RBA raised rates 3 times last year. Didnt seem to effect the market that much.




Note:

An impact lag is: there are several quarters between a cut in interest rates and the response on aggregate demand.  


It is estimated output growth falls by 1/3 of a percent in the first and second years, and 1-6 of a percent in the third year, after a 1 percent increase in the short term interest rate (IR).  

So the IR rises over the past year+ are still taking effect.  Another rise, would be more to combat inflation, than to combat a booming economy.  Inflation is cost-push at the moment, so I personally dont see much point in a rise.  But no doubt, a rise will help reduce our growth, something that is expected anyways not just at home, but in other world markets.


----------



## astroboydivx (19 April 2007)

Buffettology said:


> Must mean prices.




Yep, sorry, prices. Doing a few things at once.. Value of course lies in the eye of the beholder...


----------



## Buffettology (19 April 2007)

astroboydivx said:


> Yep, sorry, prices. Doing a few things at once.. Value of course lies in the eye of the beholder...




Or intrinsic value equations........


----------



## astroboydivx (19 April 2007)

Buffettology said:


> Must mean prices.
> 
> IMF has predicted a slowdown in the world economy, not exactly bad, but not exactly blue skies.
> 
> ...




Yes I hope there is a correction also. I would rather see PE's of 14-15 rather than 17-18. But there is a big difference between a correction and a crash.


----------



## Buffettology (19 April 2007)

astroboydivx said:


> Yes I hope there is a correction also. I would rather see PE's of 14-15 rather than 17-18. But there is a big difference between a correction and a crash.




Yes, sorry, I sort of interchange the two.

By correction/crash, I mean 20%.

I realise a full on crash would mean much more than that and a correction could mean much less, but 20% correction is what I beleive we will see in the last quarter of 07, and with much greater probability into next year.


----------



## nizar (19 April 2007)

Buffettology said:


> Yes, sorry, I sort of interchange the two.
> 
> By correction/crash, I mean 20%+
> 
> I realise a full on crash would mean much more than that, but I cant see that happening currently.




What is a full on crash?
1929?

I reckon a prolonged bearmarket/sideways market is much worse than a crash.....

But i guess in any conditions there are always stocks that outperform....


----------



## Buffettology (19 April 2007)

nizar said:


> What is a full on crash?
> 1929?
> 
> I reckon a prolonged bearmarket/sideways market is much worse than a crash.....
> ...




Its all down to interpretation.  Not sure if there is an exact definition of a crash in the stockmarket at least?  Not like there are for recession and depression within an economy (though these definitions dont give an exact representation of the magnitude or quantum).

I think a prologned bearmarket is much worse also.  There are always stocks that outperform, but these stocks usually struggle greatly also in an ongoing bearmarket.

A crash is good news for me!  Though, not as good at the moment, as I have a couple of large investments into the market I may make in the next few weeks.


----------



## wayneL (19 April 2007)

astroboydivx said:


> Yes I hope there is a correction also. I would rather see PE's of 14-15 rather than 17-18. But there is a big difference between a correction and a crash.



I wanna see 7-9. Thats when I plonk.


----------



## Buffettology (19 April 2007)

wayneL said:


> I wanna see 7-9. Thats when I plonk.




CAM, was below 7, prob around 7 ATM.  Great, long-term oriented investment.


----------



## chops_a_must (19 April 2007)

wayneL said:


> I wanna see 7-9. Thats when I plonk.



I'd say you'd be a plonker if you sat out bull markets too.

But if you want to say you're a plonker in bear markets as well, that's fine by me. :


----------



## wayneL (19 April 2007)

chops_a_must said:


> I'd say you'd be a plonker if you sat out bull markets too.
> 
> But if you want to say you're a plonker in bear markets as well, that's fine by me. :




No,

But good purchases at low PEs get stapled to the bottom drawer.

Purchases in bull markets are flogged as per exit rules.

The way of the plonker


----------



## chops_a_must (19 April 2007)

So I can safely assume you are a holder of ZFX and MRE then?


----------



## wayneL (19 April 2007)

chops_a_must said:


> So I can safely assume you are a holder of ZFX and MRE then?



No, I don't own any Aussie stocks. (apart from BHP at odd times but through NYSE)


----------



## ozewolf (21 April 2007)

The US market is down (especially property that want recover for some time yet), and looking more grey than ever.
China however has still a lot going for and perhaps good for another 5 years...

Market here will most likely have a bid of a correction by May...

Ozewolf


----------



## reece55 (21 April 2007)

ozewolf said:


> The US market is down .......




Ozewolf, the Dow was up on a record high last night....

Whilst I believe that we are due for a correction/pullback in Australia (minor), Wall Street continues to look bullish.

Bare in mind that the USD has dramatically decreased of late however!

Cheers
Reece


----------



## reece55 (21 April 2007)

chops_a_must said:


> So I can safely assume you are a holder of ZFX and MRE then?




Chops
Bare in mind that both these stocks have low P/E's for a reason - cyclical high commodity prices combined with short mine life (not sure about MRE however, but certainly ZFX). They have a huge profit margin risk at the moment and hence the reason for a cautious p/e. This doesn't mean I think they are not good investments (although, this does not constitute investment advice LOL). I remember at $19.00 a share, people were laughing at me when I said ZFX would correct to the $15.00 barrier - hmmmm......... 

Maybe I am banging my head here when I tell ppl that valuation by P/E alone is a silly method to evaluate companies. For instance, Google in the US has a forward P/E of about 45. Normally, you would say that is expensive. But when they pull out a 69% increase in QTY profit and you consider their basic monopoly position on the web, the rating is justified. 

Valuations should be based on future cash flow adjusted for risk free interest rate and a risk premium. This is obviously pretty tricky to dtermine. If you are going to use a P/E method, evaluate on a sector by sector basis, so you have an apples with apples perspective..........


----------



## chops_a_must (21 April 2007)

I was just making a point reece...


----------



## >Apocalypto< (21 April 2007)

Buffettology said:


> I hope so too, where is your logic that the bull will not end?  Are you just a massive risk taker, or do you have some kind of knowledge to beleive it will hit 8000?  I hate to say it, but I honestly beleive you are kidding yourself!  If it hits 8000 all the best for you, but I cannot see it happening within 18 months.  Who knows, I may be wrong.




Ha Ha,

Before you are so quick to judge that 8000 call, just remember it hit 6000 in under 12 months!

It is a dangerous business to be telling the market where it should go!


----------



## >Apocalypto< (21 April 2007)

astroboydivx said:


> Value of course lies in the eye of the beholder...




Very well said,

As I have posted before, value is only determined by what the market willing pay for it.

Speculation on value is very dangerous.


----------



## >Apocalypto< (21 April 2007)

nizar said:


> What is a full on crash?
> 1929?
> 
> I reckon a prolonged bearmarket/sideways market is much worse than a crash.....
> ...




Totally agree with you Nizar,

Long term side ways markets with very tight ranges are a thing in my nightmares!


----------



## wayneL (21 April 2007)

chops_a_must said:


> I was just making a point reece...



Being....

I'm talking market wide, you're talking individual stock


----------



## chops_a_must (21 April 2007)

wayneL said:


> Being....
> 
> I'm talking market wide, you're talking individual stock




That P/E's can't/ shouldn't be the only method of valuation. Otherwise, companies would all trade at exactly the same P/E level.

In all time frames there will be undervalued and overvalued stocks, albeit in varying time frames they are harder to find.

What percentage of the market would have to be trading at these levels for you to go all in?


----------



## wayneL (21 April 2007)

chops_a_must said:


> That P/E's can't/ shouldn't be the only method of valuation. Otherwise, companies would all trade at exactly the same P/E level.
> 
> In all time frames there will be undervalued and overvalued stocks, albeit in varying time frames they are harder to find.
> 
> What percentage of the market would have to be trading at these levels for you to go all in?



Chops,

Yer dead right.

But often the reference is something like - "The SP500 is trading at p/e 20" or whatever, painting with a very broad brush. When this broad brush is painting below ten, then I will be looking for stuff to stash under the bed; no stops. Individual stocks will of course vary (as will other fundamentals of course).

Meanwhile, I'm happy to trade as I am doing.


----------



## dhukka (21 April 2007)

Trade_It said:


> Very well said,
> 
> As I have posted before, *value is only determined by what the market willing pay for it.*
> 
> Speculation on value is very dangerous.




One of the worst and and most amateur mistakes you can make is equating price with value. 



> Price is what you pay. Value is what you get




Warren Buffet


----------



## >Apocalypto< (23 April 2007)

> As I have posted before, value is only determined by what the market willing pay for it.






> One of the worst and and most amateur mistakes you can make is equating price with value.




dhukka did I?

If did, that was not my meaning. I was warning people not to think they knew the value of anything before the market proved their thoughts right or wrong.


----------



## Out Too Soon (24 April 2007)

"Stock Market Crash - End of the Bull!", Panic, panic!!
We're still here, we're still over 6000, guess we'll have to put up with all the doom & gloom again soon when the market has it's May correction. Maybe people will be a little more cautious about there bear predictions this time though, do you think so? 
Naaa!


----------



## Buffettology (24 April 2007)

Out Too Soon said:


> "Stock Market Crash - End of the Bull!", Panic, panic!!
> We're still here, we're still over 6000, guess we'll have to put up with all the doom & gloom again soon when the market has it's May correction. Maybe people will be a little more cautious about there bear predictions this time though, do you think so?
> Naaa!




Definately good figures released.  I am back into the market until the end of the year.  Highly doubt we will see a rate rise next month.  Though, the impact of last years rate rises is still largely to be seen in the upcoming indicators.


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## Out Too Soon (30 April 2007)

Buffettology said:


> Definately good figures released.  I am back into the market until the end of the year.  Highly doubt we will see a rate rise next month.  Though, the impact of last years rate rises is still largely to be seen in the upcoming indicators.




Doesn't matter how good the economy is Buffy, China is in bubble ready to pop territory again meaning a correction sometime in May! POP!  
   Only temp though, enjoy the ride.


----------



## Kauri (31 May 2007)

In The West Australian today....... yikes  

*



			<H2>Legs left in our bull run: Oliver


Click to expand...


*


> _31st May 2007, 10:15 WST
> _
> _Some market experts are betting the equities market will run stronger for longer, with the Australian sharemarket potentially doubling over the next 12 months.
> AMP chief economist Shane Oliver said yesterday that the current fouryear bull market was both shorter in duration and smaller in magnitude than the average cyclical bull market since 1950. And it was steadier and more modest than the boom between 1982 and1987.
> ...



_
</H2>_


----------



## toothfairy (5 June 2007)

I reckon the Australian market will crash when the number of members in Aussie Stock Forums doubles within 6 months. When we have everyone interested in it. Like in some countries when they say servants and taxi drivers are talking on mobile phones to their brokers all day. ( I don't want to discriminate any professions here so I won't give a local example)
Cheers.


----------



## noirua (17 August 2007)

Is it the end of the bull market? Probably it is, and it's time to look for stocks that manage to defy the bear market that is on us. 

Today, the big miners slumped in London. Anglo American down 7.5%, Antofagasta down 11%, BHP Billiton down 7%, Rio Tinto down 8%, and Xstrata down 7%.

The FTSE is down 3.2% and the Dow has just reversed sharply to be down 138 points.


----------



## Buffettology (17 August 2007)

The sidelines is the best place for my cash at the moment!

Though day traders could make a lot with this volatility, though at the moment its nearly all a downward direction!

We finally saw the correction, now will it lead to a crash...........


----------



## noirua (17 August 2007)

As of posting, the Aussie Dollar continues to tank against the British Pound and Greenback, A$2.5499 and A$1.2904 respectively.

The UK FTSE 100 started up over 80 points but has just reversed to be 20 points down after the 4.1% fall yesterday.

Gold morning fix at $662.25


----------



## barnz2k (18 August 2007)

a few people have come out and said not to panic, and our economy is still strong etc. Is this enough to keep us running once the blood is mopped up and people walk the streets again? Can we continue the bull after such a hard hit?


----------



## tech/a (18 August 2007)

Trade_It said:


> Totally agree with you Nizar,
> 
> Long term side ways markets with very tight ranges are a thing in my nightmares!





Hell just sell calls.


----------



## Porper (18 August 2007)

tech/a said:


> Hell just sell calls.




Trade the bounce, if that is what it is.We'll soon know, but highly suspect that it is.

The people with the skill will make the money on the next big leg down.


----------



## noirua (18 August 2007)

noirua said:


> As of posting, the Aussie Dollar continues to tank against the British Pound and Greenback, A$2.5499 and A$1.2904 respectively.
> 
> The UK FTSE 100 started up over 80 points but has just reversed to be 20 points down after the 4.1% fall yesterday.
> 
> Gold morning fix at $662.25





After the rate rise there were the expected recoveries in the DOW and European indexes. 
It is thought that the FED knows which Institutions are in trouble or near collapse. It seems they must have moved on some quite dire news.
Some Mortgage Banks are being talked about in the UK as to whether they have problems. Northern Rock is one of these.
Expect an announcement that some Aussie Institutions have problems with loans and a surprise interest rate reduction may follow. Many mining outfits need the Aussie back to around A$1.35 to the greenback, which may necessitate a reduction to follow the FED.

The Aussie Dollar recovered to A$2.5135 and A$1.2672 against the British Pound and Greenback. FTSE closed up 205.3 (3.5%) and the DOW closed up 233.3.


----------



## numbercruncher (18 August 2007)

Its starting to seem that massive debt/leverage etc is going to force central banks to keep low Interest high Inflation enviroments regardless of there official "policys".


----------



## Flying Fish (18 August 2007)

This whole scenario is crazy. If rates go down inflation up, what will this mean to average Joe?


----------



## nioka (18 August 2007)

Inflation is like perpetual motion. The inflation rises so interest rates are increased and that increases the cost of lining so wages rise to cover the cost of living. That causes inflation so that causes interest rate rises. Then you need the bulls to increase the national asset value to offset the inflation and the cost of interest.


----------



## champ2003 (18 August 2007)

toothfairy said:


> I reckon the Australian market will crash when the number of members in Aussie Stock Forums doubles within 6 months. When we have everyone interested in it. Like in some countries when they say servants and taxi drivers are talking on mobile phones to their brokers all day. ( I don't want to discriminate any professions here so I won't give a local example)
> Cheers.




Ok please let me know just before it doubles!

lol


----------



## Smurf1976 (19 August 2007)

Flying Fish said:


> This whole scenario is crazy. If rates go down inflation up, what will this mean to average Joe?



Inflations have a long history and they don't end well for most. Universally popular at first until the downsides become apparent. And universally hated at the end.


----------



## noirua (20 August 2007)

Interesting to see how many Aussie Councils have loaned money, indirectly, to the US Sub-Prime mortgage market. The Federal Government may be forced to ask many councils "are you in difficulty".

Thoughts are that Chinese Banks have lent massive sums to borrowers to purchase property in China and much of this is far worse than the Sub-Prime mortgage lending in the US.


----------



## Jikx (20 August 2007)

nioka said:


> Inflation is like perpetual motion. The inflation rises so interest rates are increased and that increases the cost of lining so wages rise to cover the cost of living. That causes inflation so that causes interest rate rises. Then you need the bulls to increase the national asset value to offset the inflation and the cost of interest.




Well, raising interest rates in the short term may do this. But the long term effect on money supply is what makes interest rates such a powerful tool against inflation. By making it more expensive to take out loans means less loans and debt - which is the major inflators of the money supply. A decrease in the money supply means any money in the system is inherently worth more - hence this exerts a deflationary pressure.


----------



## noirua (23 August 2007)

News of the conduit (ABCPC's) crisis that has not yet been admitted by many institutions continues to concern many in the markets. Major Banks are under huge pressure to step in with their balance sheets to bail the conduits out.

Many Banks throughout the World have built up conduits and conduits are backed by American subprime mortgages. These off balance sheet vehicles used to finance the Banks purchase of assets through the sale of short-term commercial bonds, are typically backed by residential and commercial mortgages.

Some large Banks have admitted exposure:  HBOS (Grampian Fund): A$44 billion; Fortis (Scaldis Fund): A$32 billion; Lloyds TSB(Cancara Fund): A$29 billion; HSBC (Solitaire Fund): A$27 billion; ABN Amro (Amstel Fund): A$24 billion; and ING (Simba Fund): A$19 billion.


----------



## sassa (23 August 2007)

noirua said:


> Is it the end of the bull market? Probably it is, and it's time to look for stocks that manage to defy the bear market that is on us.
> 
> Today, the big miners slumped in London. Anglo American down 7.5%, Antofagasta down 11%, BHP Billiton down 7%, Rio Tinto down 8%, and Xstrata down 7%.
> 
> The FTSE is down 3.2% and the Dow has just reversed sharply to be down 138 points.




And the FTSE and the Dow and the Nikkei and the Hang Seng and the All Ords have all reversed sharply to be up and still climbing towards all time highs.The big miners are revelling in market confidence.
Is it the end of the bull.Most probably not.The indicators of the sub prime fiasco have failed to keep the market down.The Fed and Central banks have intervened to keep investors hopes going up.
I don't know how long it will take any gloom to return to the market but the futures market and Vix certainly do not indicate this.
Looks like I had better get back in and enjoy the prosperity.


----------



## nioka (23 August 2007)

Jikx said:


> Well, raising interest rates in the short term may do this. But the long term effect on money supply is what makes interest rates such a powerful tool against inflation. By making it more expensive to take out loans means less loans and debt - which is the major inflators of the money supply. A decrease in the money supply means any money in the system is inherently worth more - hence this exerts a deflationary pressure.




The same result could be gained without raising interest rates. In my younger days you could not get credit without having a substantial deposit for the purchase, eg. 33% for a new car or 40% for a second hand one. 10% to 25% for a home. No such thing as "no deposit, no interest payments for a year" Some sort of that type of rule would cut spending and encourage savings.


----------



## Jikx (23 August 2007)

nioka said:


> Some sort of that type of rule would cut spending and encourage savings.




In effect, that's exactly what raising interest rates do! Encourage saving, and cut spending. Having a minimum deposit level is again is very similar to raising interest rates - because people have to delay consumption and save. A difference of what you propose is that it will basically -force- people to save. This can be both a good and not so good thing.


----------



## nioka (23 August 2007)

Jikx said:


> In effect, that's exactly what raising interest rates do! Encourage saving, and cut spending. Having a minimum deposit level is again is very similar to raising interest rates - because people have to delay consumption and save. A difference of what you propose is that it will basically -force- people to save. This can be both a good and not so good thing.




Except that raising the interest rates affects everyone with a loan where as
higher deposits does not increase the cost for anyone. It only delays purchases for those who couldn't afford to buy without saving first.


----------



## wayneL (23 August 2007)

sassa said:


> I don't know how long it will take any gloom to return to the market but the futures market and Vix certainly do not indicate this.



Futures and VIX do not predict or indicate anything, they simply "reflect" the current market. They respond, and do not lead.


----------



## toothfairy (23 August 2007)

Just wondering how high can the present "dead cat" bounce up to so that I can sell and make some profit? Or have we changed our minds about the dead cat.


----------



## numbercruncher (24 August 2007)

Looks like the Fed has/is opened the flood gates, guess well all make more money, just itll be worth less and less as it gets more diluted  itll feel like more, itll look like more but itll be less bang for yer buck!

Funny old world isnt it ......


----------



## theasxgorilla (24 August 2007)

You are probably going to be right numbercruncher, but inflation is a lagging effect.  And in some markets deflationary effects are simply too powerful to stand a chance against inflation.  I guarentee you can still buy more computer for the same dollars this time next year.


----------



## insider (24 August 2007)

If you paid for your software computers are no way near cheap... The hardware is cheaper but the software is ridiculous depending what you need it for... Cos of Architecture I need Revit 10 which is about $7000 and then I need Window Vista another $500 maybe, then I need Photoshop, Illustrator, Microsoft Office, Adobe Professional, AutoCAD and a decent movie making program thats another $6,000 ... Oh and then I need 3d Max which is another 4,000... And maybe Rhino which I'm sure is probably 1000 bucks... Google Sketchup rules at 200 bucks... Computers are not so cheap if you go legit... And of course Pro Trader which is something I plan on getting is 900 bucks plus 55 dollars a month


----------



## theasxgorilla (24 August 2007)

Insider,

Thats why you pick and choose what you need to get through the degree to your satisfaction so you get the job you want at completion.  If you want to be a CAD or 3d Studio Max operator, by all means get and learn all those software products.  If you want to be an architect I dare say your money would be better spent on a good camera, big books with lots of photos and diagrams and some overseas holidays.

And I guarentee the camera will cost less in 12 months time too.


----------



## insider (24 August 2007)

theasxgorilla said:


> Insider,
> 
> Thats why you pick and choose what you need to get through the degree to your satisfaction so you get the job you want at completion.  If you want to be a CAD or 3d Studio Max operator, by all means get and learn all those software products.  If you want to be an architect I dare say your money would be better spent on a good camera, big books with lots of photos and diagrams and some overseas holidays.
> 
> And I guarentee the camera will cost less in 12 months time too.




Wait who said I paid...  lol Yes technology gets cheaper as it is filtered down its just the way it goes... did you know that most things were made and first used by the army? then it just filtered down and sold commercially. Then more and more people start making the same thing and then those items become super seeded and the factory is made to close down but because there were so many employees the factory stays open and keeps making those same super seeded products until its too old... Just like Sony and Sanyo...

Yes I a holiday would be nicer


----------



## noirua (29 August 2007)

noirua said:


> News of the conduit (ABCPC's) crisis that has not yet been admitted by many institutions continues to concern many in the markets. Major Banks are under huge pressure to step in with their balance sheets to bail the conduits out.
> 
> Many Banks throughout the World have built up conduits and conduits are backed by American subprime mortgages. These off balance sheet vehicles used to finance the Banks purchase of assets through the sale of short-term commercial bonds, are typically backed by residential and commercial mortgages.
> 
> Some large Banks have admitted exposure:  HBOS (Grampian Fund): A$44 billion; Fortis (Scaldis Fund): A$32 billion; Lloyds TSB(Cancara Fund): A$29 billion; HSBC (Solitaire Fund): A$27 billion; ABN Amro (Amstel Fund): A$24 billion; and ING (Simba Fund): A$19 billion.




Banks turned south in New York and London as Barclays Bank is the latest to come in the firing line over mortgage based loans. One Barclays fund, alone, is said to be in deficit of hundreds of million of pounds and rumours abound that the ABN bid is now less certain to proceed.

Announcements from Australian Banks, Governments, and Councils may spread the problems a good deal wider.


----------



## Rob_ee (29 August 2007)

So what happens when the fed cuts the rate in a day or two ?

Will that solve the problem .. it will certainly bring back short?? term euphoria like when the DOW spiked 300 points at open at the last cut.

Will that be a band aid solution or will it fix the problem going forward.

Is this a guessing game or can one trade the market with confidence.

All very confusing for a newbie

Rob


----------



## adobee (29 August 2007)

What do people think ??? Are we in for another week of stocks falling hard or a day !? Do I sell now or sell in 2 days when I take a bigger lose!


----------



## Wysiwyg (29 August 2007)

I reckon it`s a great time to jump .

(gee wysiwyg that`s intelligent)


----------



## BIG BWACULL (29 August 2007)

Wysiwyg said:


> I reckon it`s a great time to jump .
> 
> (gee wysiwyg that`s intelligent)



Out of the frying pan into the fire AAAAAAHHHHHHHH


----------



## KIWIKARLOS (29 August 2007)

At the moment the losses are confined to financial markets there are heaps of companies eg. miners, services and health which are posting huge profits and continued strength. 

The banks which have been posting record profits have been the ones taking on the risk to acquire those profits even if they have a downturn they won't post losses.

Perhaps this is Karma coming back to bite them for charging ridiculous fees and lending to every man and his dog. In my opinion the big financial insto's were getting to head strong and thought they were invincible and profits would always grow and this reality check will bring things back into balance.


----------



## nioka (29 August 2007)

adobee said:


> What do people think ??? Are we in for another week of stocks falling hard or a day !? Do I sell now or sell in 2 days when I take a bigger lose!




Good time to look for bargains.


----------



## tasmanian (29 August 2007)

nioka said:


> Good time to look for bargains.




I personally dont think today is a good day too look for bargains.dow closed on its low expect it too go lower tonight.un less you like catching falling knives.

the last rally was the time to sell when the market was back up near old support 6187 which is now new resistance.add to your shorts on the rally today which is now


----------



## sassa (29 August 2007)

tasmanian said:


> I personally dont think today is a good day too look for bargains.dow closed on its low expect it too go lower tonight.



Most likely.The S & P 500 has fallen 2.3 up to 9.30pm(New York time) and the Nasdaq has fallen from a positive of 2.5 to 0.25 in the same time.Still plenty of time to go till opening.


----------



## jman2007 (29 August 2007)

KIWIKARLOS said:


> at the moment the losses are confined to financial markets there are heaps of companies eg. miners, services and health which are posting huge profits and continued strength.
> 
> The banks which have been posting record profits have been the ones taking on the risk to aquire those profits even if they have a downturn they won't post losses.
> 
> Perhapes this is Karma coming back to bite them for charging ridiculous fees and lending to every man and his dog. In my opinion the big financial insto's were getting to head strong and thought they were invincible and profits would always grow and this reality check will bring thins back into balance.




Yeah good call Kiwi,

This is probably the rap over the knuckles the finance sector needed, although it probably feels more like a king hit to some people.

Personally I think this is a very difficult time to make meaningful gains, as I don't think anyone really has a clear idea what is going to happen.  Kennas pointed out that now is a good time to be sitting on the sidelines whilst this volatility is going on.  Imo, we're seeing the herd mentality in full-swing with a healthy dose of over-reaction, all it takes at the moment is the sound of a  sparrow farting to have panicked investors rushing to their computer screens and panic selling, convinced that the sky is about to fall on their heads.

I think a lot of people forget that a sp at a particular point in time does not necessarily reflect the true value of the stock, so bargains to be had? Sure, if you're brave!  To support Kiwi's assessment, I don't think anyone can underestimate the position of the mining juggernaut at the moment, the fundamentals are still in place, and the demand for raw materials is as strong as ever. I do believe however, that new high-risk spec floats such as in the U sector, will be treated with a healthy dose of scepticism, and more people will turn back to operations which are generating cash flow, and have some semblance of a operating track record.

I'm still cautiously bullish... although I think I just saw some bear tracks in the woods this morning!


----------



## TheRage (29 August 2007)

KIWIKARLOS said:


> Perhapes this is Karma coming back to bite them for charging ridiculous fees and lending to every man and his dog. In my opinion the big financial insto's were getting to head strong and thought they were invincible and profits would always grow and this reality check will bring thins back into balance.





I think perhaps you are referring to investment banks and low doc lenders  because the top four banks actually have very little comparitive defaults occuring and have little exposure to subprime lending. 

This is Westpac's doubtful debts expense for the past 10 years. The figures are expressed in millions.
1997    1998   1999   2000   2001   2002    2003   2004   2005    2006
-78.0 -168.0 -171.0 -202.0 -433.0 -461.0 -485.0 -414.0 -382.0 -375.

As you can see Westpac has had declining defaults over the past 3 years due to tougher lending conditions.  ANZ are also in a similar position. NAB and CBA have Doubtful debts that go up and down but overall don't trend upwards. Cashflows are still strong for the top 4, their relative PE compared to overall industry is lowish 14 Vs 16 and most banks are actually making good money from their investment arms such as Westpac through BT etc. Not to mention business banking and the positive effect this has been having. All those wonderful resource stocks are funded primarily through equity or debt and guess where the debt is coming from. To summarise as long as the resource boom continues so will profits from banks.


----------



## KIWIKARLOS (29 August 2007)

yeah i agree with the aussie home morgage market is fairly strong but what im referring to is investment funds run by these same banks and mac bank etc. the ones which are highly geared etc. Although they only have small amounts overall in overseas securities and only in the higher risk products, which is a good thing. 

You also have to remember that even though they have little exposure alot of the money that these banks lend is foriegn cash. they may start decreasing their profit margins if the cost of their loans increases.

Does Aus have the same practice of bundling morgages into securities and selling them on market?

We have to also remember our massive foriegn debt, how will this effected by current probs?


----------



## TheRage (29 August 2007)

I will conceed you make some interesting points. I am sure that some securitisation of loans does occur in Australia but probably confined to lower level lenders. I am unsure whether the big 4 do it but would be surprised if they did.


----------



## nioka (29 August 2007)

tasmanian said:


> I personally dont think today is a good day too look for bargains.dow closed on its low expect it too go lower tonight.un less you like catching falling knives.



You don't have to try to catch falling knives to trade today. It is a good time to trade one stock for another. If you have a stock which you calculate will fall further and there is one which you think has fallen further than it should have then it is a good opportunity to switch. I have both bought and sold today and I'm happy with the result so far. I'm still looking for more opportunities. I'm not always right but this tactic works for me on most occasions.


----------



## dhukka (29 August 2007)

TheRage said:


> I think perhaps you are referring to investment banks and low doc lenders  because the top four banks actually have very little comparitive defaults occuring and have little exposure to subprime lending.
> 
> This is Westpac's doubtful debts expense for the past 10 years. The figures are expressed in millions.
> 1997    1998   1999   2000   2001   2002    2003   2004   2005    2006
> ...





Where to start with this, replete with errors and false conclusions. Firstly WBC's bad debt expense is a perfect reflection of the credit cycle. Notice the doubling of bad debts from *2000- 2001* - coinciding perfectly with a turn in the credit cycle. How do I know? I was a bank analyst at the time and co-wrote a 100 page document on the major banks ability to absorb losses.

You can see the cycle played out by 2003 and the subsequently WBC's provision for doubtful debts declined - although surprisingly not to any great extent. 

By the way what was WBC's *1H07* bad debt expense? Let me answer that for you,*$232m*. So on a half yearly basis WBC's past 3 halves look like this:

*1H06* -185,    *2H06* -190   * 1H07*  -232, want to have a guess where this trend is headed?

For comparison here are the last 3 halves for ANZ *1H06* -224,    *2H06* -183   * 1H07*  -240, doesn't look to bad. However what did McFarlane say at the interim?

_*"While the credit environment is benign, we expect provisions to be significantly higher in the second half " *_




> To summarise as long as the resource boom continues so will profits from banks.



 Absolutely ridiculous statement and testament to your lack of understanding of what you're talking about.


----------



## KIWIKARLOS (29 August 2007)

I think short term / day trading is very difficult at the moment. I have bought 3 medium to long term positions that I expect to hold between 6- 18 months before seeing any sort of decent return. 

I think the Chinese and Indian financial markets have alot of growth and reform to do and the growth in India alone is very large. Unfortunatly they have alot of Iron ore but little energy.

So my investments are now focused on Iron ore for China and Energy for India. No companies who's main interests are in Aus or US but I think at this stage the Aus gas industry is the best local bet. 

Wouldn't touch the financial stocks eg Mac bank etc and even aus banks with a ten foot pole at least for 3-6 months.


----------



## dhukka (29 August 2007)

TheRage said:


> I will conceed you make some interesting points. I am sure that some securitisation of loans does occur in Australia but probably confined to lower level lenders. I am unsure whether the big 4 do it but *would be surprised if they did*.




Prepare to be surprised. In the year to August 3rd, total securitzation stood at *$59.3 billion *. *$53 billion* or *89%* of which are Residential Mortgage Backed securities. The good news is that only *2.7%* of those are sub-prime. 

Who originated them? The biggest chunk, *40%* was orignated by the major banks. The next biggest chunk, *25%* was made by regional banks. 

Educate yourself


----------



## explod (29 August 2007)

KIWIKARLOS said:


> I think short term / day trading is very difficult at the moment. I have bought 3 medium to long term positions that I expect to hold between 6- 18 months before seeing any sort of decent return.
> 
> I think the Chinese and Indian financial markets have alot of growth and reform to do and the growth in India alone is very large. Unfortunatly they have alot of Iron ore but little energy.
> 
> ...





Agree totally.   For the more conservative to ballance the above.  We need to keep eating food and good highway toll roads will just keep on.  Sssoooooooo     WOW and TCL on the dips (and there will be some good ones) could be worthwhile.

First 15 minutes of ASX opening after good falls on the Dow are good times to buy.   Sometimes some good day trades on the fear factor too.


----------



## dhukka (29 August 2007)

For comparison purposes


----------



## noirua (31 August 2007)

noirua said:


> Banks turned south in New York and London as Barclays Bank is the latest to come in the firing line over mortgage based loans. One Barclays fund, alone, is said to be in deficit of hundreds of million of pounds and rumours abound that the ABN bid is now less certain to proceed.
> 
> Announcements from Australian Banks, Governments, and Councils may spread the problems a good deal wider.




Aussie Hedge Fund, US$100 million, "Basis Yield Alpha Fund", has applied for bankruptcy protection in the United States after a default notice was served. The fund has ties with high risk US sub-prime mortgages.


----------



## noirua (1 September 2007)

noirua said:


> Aussie Hedge Fund, US$100 million, "Basis Yield Alpha Fund", has applied for bankruptcy protection in the United States after a default notice was served. The fund has ties with high risk US sub-prime mortgages.






Barclays Bank has admitted borrowing US$1.6 billion from the UK Bank of England  to cover problems in one of their funds, Cairns Capital. Barclays also admitted borrowing US$600 million to cover other funds last week.


----------



## Awesomandy (1 September 2007)

noirua said:


> Barclays Bank has admitted borrowing US$1.6 billion from the UK Bank of England  to cover problems in one of their funds, Cairns Capital. Barclays also admitted borrowing US$600 million to cover other funds last week.




That's not a bad sign, I think. It appears that banks are leaning on the optimisic side, and is willing to lend large amount of money to funds to help ride out the correction.


----------



## adobee (1 September 2007)

What will happend when the federal reserve lifts interest rates.. If so many people are defaulting in the states at very low interest rates wait till the interest rates rise a % or two and they will... even at the possible talk of it then we will see the full extent of the credit crunch.. say 12-18months and crunch..


----------



## numbercruncher (3 September 2007)

> Higher interest rates and volatility in financial markets have contributed to a disappointing fall in manufacturing activity, the Australian Industry Group (AiGroup) says.
> 
> The AiGroup-PricewaterhouseCoopers Australian Performance of Manufacturing Index (PMI), fell 5.0 points in August to 52.4 as growth in consumer demand and new orders waned.




http://optuszoo.news.ninemsn.com.au/article.aspx?id=64727


Surprising to see these sort of negative results in so soon on top of the recent volatility! 

(Did have this info/article posted in the XAO analysis thread but a moderator said it had nothing to do with XAO analysis and deleted it so its probably more fitting for this thread ? If its not fitting for this thread could i please be directed as to where is suitable to post it , thanks.)


----------



## explod (3 September 2007)

numbercruncher said:


> http://optuszoo.news.ninemsn.com.au/article.aspx?id=64727
> 
> 
> Surprising to see these sort of negative results in so soon on top of the recent volatility!
> ...




Difficult to catigorise.   The writer of the article fails to explore reasons for fall off in consumer interest.  Nothing is mentioned of the effect that growing importation of products from China is having on our own industry and workforce.  Not my expertise but it must be having a detrimental effect.

The subject, if there has not been one on these lines could be worth it's own thread on the lines of China's influence on our manufacture.  The other aspect of course is a strengthening dollar which makes is harder for our exporters to compete.

However these aspects are probably not going to be a prime cause of a stock market crash.   

A bit lame but two bobs worth


----------



## numbercruncher (5 September 2007)

> LDC Finance is the eighth New Zealand finance group to collapse in 16 months - the fourth to fail in a fortnight - and, according to local experts, there's more pain tocome.
> 
> "It's not going to be a soft landing and it ain't going to be a hard landing - it's going to be a good old-fashioned, slam-dunk, road-kill, car-crash landing," New Zealand Shareholders Association chairman Bruce Sheppard said.
> 
> ...




http://www.theaustralian.news.com.au/story/0,25197,22364349-643,00.html


Sounds like the Kiwis are hurting "aye Bro" ?


I particuarly liked this line " It's taken a decade and a half for it to turn into the bucket of puss "


----------



## insider (5 September 2007)

numbercruncher said:


> http://www.theaustralian.news.com.au/story/0,25197,22364349-643,00.html
> 
> 
> Sounds like the Kiwis are hurting "aye Bro" ?
> ...




Dats choice bro


----------



## Ken (5 September 2007)

http://www.youtube.com/watch?v=qC3YOFKTsTg&mode=related&search=

anyone seen this???


----------



## explod (5 September 2007)

By Rex Nutting
Last Update: 8:19 AM ET Sep 5, 2007Print  Subscribe to RSS Disable Live Quotes 

WASHINGTON (MarketWatch) -- Employment in the U.S. private sector grew by 38,000 in August, the weakest in four years, according to the ADP employment report released Wednesday. The ADP report suggests nonfarm payrolls may have grown much slower than the 123,000 anticipated by economists ahead of the report. Adding in some 27,000 government jobs typically added but not covered by the ADP report, it suggests nonfarm payrolls grew by about 65,000. The Labor Department will report on the nonfarm payrolls number on Friday. The goods-producing sector fell by 49,000 jobs in August, including 33,000 in manufacturing. The services sector added 87,000 jobs in August. 

End quote:

Notice FTSE down tonight,   on above a drop on dow likelt


----------



## Ken (5 September 2007)

How is everyone handling the markets at the moment?

Are they taking the short gains or getting set LONG or SHORT?

Any predictions for the ALL ords at XMAS?

I reckon we could see 7000 if the sub-prime issues are pushed aside, but we could see another test of 5500.

I dont know which way it is going....


Just taking short gains at the moment.


----------



## Miner (6 September 2007)

As we speak the short gains are turning to be long pain.
Alan Kohler was right. Until 19 Sept do not commit in market

Regards


----------



## sassa (6 September 2007)

Ken said:


> How is everyone handling the markets at the moment?
> 
> Are they taking the short gains or getting set LONG or SHORT?
> 
> ...




My financial planner has just pulled me in to reorganise my portfolio.He forecasts 5400 by Xmas and could even be as low as 5100.I have enjoyed a period of excellent growth-I entered 4 years ago when the market was 3800.


----------



## numbercruncher (7 September 2007)

> NEW YORK, Sept 7 (Reuters) - U.S. stock index futures dropped on Friday after data showed monthly hiring contracted for the first time in four years, fanning recession fears and adding pressure for a Federal Reserve interest-rate cut.
> 
> U.S. employers slashed 4,000 jobs in August, the Labor Department reported. Economists were expecting an increase of 110,000 jobs.
> 
> "It's dreadful, and not only the current numbers but the revisions. It shows the so-called support for the economy from rising employment is rapidly eroding and to me it seems almost inevitable we're heading for recession," said Michael Metz, chief investment strategist at Oppenheimer & Co in New York.




http://www.reuters.com/article/marketsNews/idINN0719749420070907?rpc=44

Even Greenspan is weighing in and comparing it to 1987

http://money.cnn.com/2007/09/07/news/newsmakers/bc.apfn.greenspan.remarks.ap/index.htm?postversion=2007090706

All fairly predictable stuff really .....


----------



## krisbarry (7 September 2007)

sassa said:


> My financial planner has just pulled me in to reorganise my portfolio.He forecasts 5400 by Xmas and could even be as low as 5100.I have enjoyed a period of excellent growth-I entered 4 years ago when the market was 3800.




Jobs figures just out, not good, which will mean the US will cut rates and the market will rally hard!


----------



## numbercruncher (7 September 2007)

lol gotta love eternal optimists.


Nothing more sure than when its been officialy denied


----------



## insider (8 September 2007)

US cuts rates... Then Crash


----------



## chops_a_must (8 September 2007)

insider said:


> US cuts rates... Then Crash




Looks like I posted the song 'The Bucket' in the wrong thread. Lol!


----------



## wayneL (8 September 2007)

Looks like somebody crashed the party.


----------



## krisbarry (8 September 2007)

Ohhh what the hell...I am a bear now too since we have a few headstrong bears on this forum!.....I see the ASX at 3500 by years end

I am going to the teddy bears picnic this weekend...care to join!


----------



## explod (8 September 2007)

Stop_the_clock said:


> Ohhh what the hell...I am a bear now too since we have a few headstrong bears on this forum!.....I see the ASX at 3500 by years end
> 
> I am going to the teddy bears picnic this weekend...care to join!





Been a bit optomistic IMHO


----------



## Flying Fish (8 September 2007)

wayneL said:


> Looks like somebody crashed the party.



Holly ****. Almost an eagle lol


----------



## hangseng (8 September 2007)

insider said:


> US cuts rates... Then Crash




I think crash and then rates cut. Bernanke wants the market to feel the pain of the excesses. His only concern is the economy at large, not the market.


----------



## Awesomandy (8 September 2007)

insider said:


> US cuts rates... Then Crash




I think the market is in quite a bit of troulbe at the moment. Let's say, the Feds cut rates. This would only confirm that there is a serious problem, and will get people thinking, perhaps the risks are indeed a lot greater than what they have been valued to be. Of course, if things turn out to be bullish again, we'll just run into the same problem a little later down the track as debt continue to increase. Then what? Cut rates again? Until the interest rate is zero? 

Alternatively, they don't cut rates, people will think that the Feds don't know what they are doing, and since they are unwilling to bail out the large investors (e.g. hedge funds), they'll have sooner or later have no other choice but to de-risk their highly leveraged portfolio purely for survival. 

So, either way, I think a crash is imminent. The question is not if, it's when.


----------



## champ2003 (8 September 2007)

Awesomandy said:


> I think the market is in quite a bit of troulbe at the moment. Let's say, the Feds cut rates. This would only confirm that there is a serious problem, and will get people thinking, perhaps the risks are indeed a lot greater than what they have been valued to be. Of course, if things turn out to be bullish again, we'll just run into the same problem a little later down the track as debt continue to increase. Then what? Cut rates again? Until the interest rate is zero?
> 
> Alternatively, they don't cut rates, people will think that the Feds don't know what they are doing, and since they are unwilling to bail out the large investors (e.g. hedge funds), they'll have sooner or later have no other choice but to de-risk their highly leveraged portfolio purely for survival.
> 
> So, either way, I think a crash is imminent. The question is not if, it's when.




The Fed has already confirmed that there are major problems by cutting the discount interest rate and this has all been factored into the market. The market is already betting on the Fed to cut the regular interest rate and when this is confirmed it should bring stability back into the market IMO as by cutting interest rates promotes economic growth and puts more liquidity into the market.

I wouldn't go as far as saying that they could hypothetically cut interest rates to zero even though i understand that you are being facetious. It's understandable fo interest rates to be cut a percentage over time though. Who said that rates need to be continuously cut anyway? What's to say that rates are cut and then put on hold once stability has been obtained?


----------



## insider (8 September 2007)

Awesomandy said:


> I think the market is in quite a bit of troulbe at the moment. Let's say, the Feds cut rates. This would only confirm that there is a serious problem, and will get people thinking, perhaps the risks are indeed a lot greater than what they have been valued to be. Of course, if things turn out to be bullish again, we'll just run into the same problem a little later down the track as debt continue to increase. Then what? Cut rates again? Until the interest rate is zero?
> 
> Alternatively, they don't cut rates, people will think that the Feds don't know what they are doing, and since they are unwilling to bail out the large investors (e.g. hedge funds), they'll have sooner or later have no other choice but to de-risk their highly leveraged portfolio purely for survival.
> 
> So, either way, I think a crash is imminent. The question is not if, it's when.




I think people need to realize that The Feds really can't do anything about it... Having said that a crash is inevitable because it is a result of over investing... Can't wait to see Monday... I reckon the All ords will go down 2.5%...


----------



## noirua (8 September 2007)

Problems remain as lending between banks continues to dry up, forcing countries to pump money into the system. Most Banks have not declared their potential sub-prime losses and until this is done the credit-crunch is set to stick around. 
Australian Banks have kept quiet and their interests may well be substantial.
Banks are now starting to raise rates to claw in cash, whoever goes the highest may have the biggest problem.


----------



## GreatPig (8 September 2007)

If the all-ords goes down about the same as the US last night then it will end up on the support just below 6200.

GP


----------



## Pommiegranite (8 September 2007)

How about this:

_*Inflation has fallen significantly. 2 years of interest rate cuts have achieved what they were meant to.*_

_*Therefore a .25% cut in interest rates.*_

_*The economy is strong and is expected to continue its growth supported by lower interest rates.*_

So we get a correction/volatility in the meantime. Then by October's Fed meeting economic growth, housing market, inflation will all have stabilised on a sustainable growth 'curve'.

Sub prime....sub what?


----------



## explod (8 September 2007)

Pommiegranite said:


> How about this:
> 
> _*Inflation has fallen significantly. 2 years of interest rate cuts have achieved what they were meant to.*_
> 
> ...




Who is the author,  a bland statement without qualification is meaningless.

Ahhh....welllllll     remember in cool hand luke, the great line of the gaoler

"...some people you just can't help"


----------



## nioka (8 September 2007)

insider said:


> . Can't wait to see Monday... I reckon the All ords will go down 2.5%...




If enough people say that and think that then it will. Whether it needs to or should is another matter. Day traders have a vested interest in ramping and downramping the market so some of all this is market manipulation.


----------



## krisbarry (8 September 2007)

nioka said:


> If enough people say that and think that then it will. Whether it needs to or should is another matter. Day traders have a vested interest in ramping and downramping the market so some of all this is market manipulation.




Completley agree, could go either way on Monday, most likely down, but the Aussie market has endured many of the Dows down days, ending in positive territory.

Day traders do tend to ramp or downramp the guts out of the "xjo" etc to suit there short or long positions.


----------



## Pommiegranite (8 September 2007)

explod said:


> Who is the author, a bland statement without qualification is meaningless.
> 
> Ahhh....welllllll remember in cool hand luke, the great line of the gaoler
> 
> "...some people you just can't help"




Sorry...should have made myself a little more clear.

The author is me. I'm just trying to predict some kind of Fed statement this month. Of course they would have to qualify the statement.

Is this really beyond the realms of possibilty??...i.e inflation having been reigned in.

P.S...I reckon Greenspan should just **** *** *** ***. He helped create a mess and now is preaching about it as though he had nothing to do with it.


----------



## Porper (8 September 2007)

Stop_the_clock said:


> Completley agree, could go either way on Monday, most likely down, but the Aussie market has endured many of the Dows down days, ending in positive territory.
> 
> Day traders do tend to ramp or downramp the guts out of the "xjo" etc to suit there short or long positions.




Don't think it can go either way, if the XJO finishes up on Monday it will be a bloomin miracle.

Day traders have no influence on the overall direction of the market in my opinion.Think of all the billions going in and out of stocks, day traders are only a spec on the globe. Manipulation undoubtedly goes on but able to move the direction of the XJO? Not a chance.


----------



## explod (8 September 2007)

Stop_the_clock said:


> Completley agree, could go either way on Monday, most likely down, but the Aussie market has endured many of the Dows down days, ending in positive territory.
> 
> Day traders do tend to ramp or downramp the guts out of the "xjo" etc to suit there short or long positions.




I think there is plenty of that in the spec stock area though, some of us guilty in various degrees on these forums.  Hard to avoid


----------



## vvguru (8 September 2007)

Have you guys noticed on Wiki:

"The next solar eclipse takes place on September 11, 2007", is it a sign? or just me superstitious?

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


----------



## dhukka (8 September 2007)

Pommiegranite said:


> How about this:
> 
> _*Inflation has fallen significantly. 2 years of interest rate cuts have achieved what they were meant to.*_
> 
> ...




Which economy are you talking about? Cutting interest rates has lowered inflation, that must be the bizzaro world economy you're talking about.


----------



## numbercruncher (8 September 2007)

Inflation has lowered, what a farce, the whole Inflation reporting system is a farce.

I know i pay tones more for Petrol, Food, Accomodation, Power, nearly everything infact, and it seems to increase every quarter, except now a days i can go get a trailer load of Kids toys, Dvd players, Microwave ovens etc for not much more than the weekly grocery bill, its a crackup!

They need to bump interest rates to 10pc


----------



## wayneL (8 September 2007)

numbercruncher said:


> Inflation has lowered, what a farce, the whole Inflation reporting system is a farce.
> 
> I know i pay tones more for Petrol, Food, Accomodation, Power, nearly everything infact, and it seems to increase every quarter, except now a days i can go get a trailer load of Kids toys, Dvd players, Microwave ovens etc for not much more than the weekly grocery bill, its a crackup!
> 
> They need to bump interest rates to 10pc



Agree

CPI = Chinese Price Index

Real inflation is MUCH higher


----------



## Knobby22 (8 September 2007)

And they will, in my opinion.
The liquidity crisis has saved us from 10% interest rates for at least an extra 6 months.

I have trouble understanding why the US yield curve is strongly positive yet Australia's is negative. 
Am I missing something?


----------



## explod (8 September 2007)

Knobby22 said:


> And they will, in my opinion.
> The liquidity crisis has saved us from 10% interest rates for at least an extra 6 months.
> 
> I have trouble understanding why the US yield curve is strongly positive yet Australia's is negative.
> Am I missing something?





Would not feel confident about that.    One of the reason for liquidity drying up is because of low cost money (low interest rates) in the first place.  Money has been lent out in essence against a weak collateral base.   Banks no longer trust each other so have withdrawn the availabilty of money (the liquidity).  They will only do that now against tangible assets and then only at ever increasing interest rates.   On the way the market is playing out the last week or so, this transition from a promise to lower rates to an actual increase will be swift.   The fact that the media noise is so loud in reassurance says that things are much worse than anyone wants  to admit.

We cannot postulate, we have to follow what pans out as the future is known only to itself.    A lot is canvassed on market psycholgy, the herd instinct.   People are now very concerned which will probably, quite apart from fundamentals, be self fulfilling and drive the markets down for some time from the action unfolding now.

Not able to postulate on the second part of you question.   Of course the economies of the US and Australia are very different and our trading partnership becoming smaller than is generally realised


----------



## Pommiegranite (8 September 2007)

dhukka said:


> Which economy are you talking about? Cutting interest rates has lowered inflation, that must be the bizzaro world economy you're talking about.





lol...yep...i meant rises...of course the US has been raising interest rates


----------



## dhukka (8 September 2007)

Pommiegranite said:


> lol...yep...i meant rises...of course the US has been raising interest rates




OK then, Now we have identified the economy,



> How about this:
> 
> Inflation has fallen significantly. 2 years of interest rate cuts have achieved what they were meant to.




Yes the Fed has successfully choked 'core inflation,' a narrow measure which doesn't capture the real cause of inflation, as others have alluded to. Not to mention the flawed approach to monetary policy by targeting an inflation rate.  




> Therefore a .25% cut in interest rates.




After yesterday's employment figures the market is pricing in 70% chance of 0.5%. guess we'll have to wait and see whether cool-hand Ben goes the whole hog or just a quarter point.  



> The economy is strong and is expected to continue its growth supported by lower interest rates.




The economy is not strong, employment is the latest shoe to drop, corporate profits are peaking, credit markets are shrinking, housing still tanking.



> So we get a correction/volatility in the meantime. Then by October's Fed meeting economic growth, housing market, inflation will all have stabilized on a sustainable growth 'curve'. Sub prime....sub what?




This is little more than wishful thinking. Housing is nowhere near stabilizing, economic growth is slowing rapidly, inflation...whatever. Funny how people keep throwing sub-prime out there as if it were a cause, it's a symptom of a much larger problem.


----------



## sassa (9 September 2007)

Porper said:


> Don't think it can go either way, if the XJO finishes up on Monday it will be a bloomin miracle.




Have a read of this article
http://www.theage.com.au/news/busin...f-rollercoaster/2007/09/08/1188783556754.html
Particularly interested in these comments-
"We will see the predictable knee-jerk response...." &
"A survey of brokers' stock forecasts for the next 12 months predict the S & P/Asx 200 will gain 17.7%."


----------



## explod (9 September 2007)

sassa said:


> Have a read of this article
> http://www.theage.com.au/news/busin...f-rollercoaster/2007/09/08/1188783556754.html
> Particularly interested in these comments-
> "We will see the predictable knee-jerk response...." &
> "A survey of brokers' stock forecasts for the next 12 months predict the S & P/Asx 200 will gain 17.7%."




Both Craige James and Shane Oliver toe a very right wing line in all that they say.  And thier statements are rarely backed by any evidence.   On the one hand they say that the risk of a recession has gone up and in the same para that they will avoid a recession.      MAKE UP YOUR MIND

Yes the market will go down to some degree tomorrow, but as has been the growing case of late much of that will restore by mid afternoon.

And it is the business of Stockbroker's to talk up the market, they want you in for their commissions.   Like asking a real estate agent which way the housing market is going


----------



## CanOz (9 September 2007)

Has anyone seen Henry Paulson trying to put a positive spin on the jobs data?

Check this out, i really felt sorry for him, he's really sounding desperate here....and this coming from the once, top gun at Sachs.

http://www.bloomberg.com/index.html?Intro=intro3

Second vid on the left.


Cheers,


----------



## dhukka (9 September 2007)

CanOz said:


> Has anyone seen Henry Paulson trying to put a positive spin on the jobs data?
> 
> Check this out, i really felt sorry for him, he's really sounding desperate here....and this coming from the once, top gun at Sachs.
> 
> ...




Yes saw that and was almost going to start a thread about it. What an absolute jibbering idiot, notice how the moron completely avoids answering any of the tough questions and resorts to the same platitudes and generalizations he's been parroting for the last 6 months.  How someone this utterly incompetent can keep his job is amazing - then again look who is leading the country. 

I had the complete opposite reaction to you. I was hoping the reporter would take to his stupid bald head with the microphone then strangle him with the cord until he confessed that he is a bald faced, stupid lying c*&t. But that's just me.


----------



## wayneL (9 September 2007)

dhukka said:


> I was hoping the reporter would take to his stupid bald head with the microphone then strangle him with the cord until he confessed that he is a bald faced, stupid lying c*&t. But that's just me.



ROFL!

Now that is something I'd love to see.


----------



## CanOz (9 September 2007)

dhukka said:


> Yes saw that and was almost going to start a thread about it. What an absolute jibbering idiot, notice how the moron completely avoids answering any of the tough questions and resorts to the same platitudes and generalizations he's been parroting for the last 6 months.  How someone this utterly incompetent can keep his job is amazing - then again look who is leading the country.
> 
> I had the complete opposite reaction to you. I was hoping the reporter would take to his stupid bald head with the microphone then strangle him with the cord until he confessed that he is a bald faced, stupid lying c*&t. But that's just me.




Sure Dhukka, but its sad, very sad when a man so known for his skill is so obviously uncomfortable lying through his teeth. Why on earth would you take THAT job under THAT moron at THIS time is beyond me. What did they do, promise him all the oil in Iraq or something?

Cheers,


----------



## Temjin (9 September 2007)

Everyone is aware of a mysterious trader from Israel is predicting a 9/11 style crash by betting BIG via a billion dollar put option on an European index that tracks around 50 stocks?

Lots of conspiracy rumours around this on the internet. Obviously, he could be a terroist or some insiders know something big will happen...

http://www.prisonplanet.com/articles/august2007/270807_market_crash.htm

Anyway, interesting to know what will happen in the next few days up to the 21st of September. 

I wondered how many money that trader will lose if the market doesn't crash as he/she predicted?


----------



## >Apocalypto< (10 September 2007)

> promise him all the oil in Iraq or something?




Don't worry about oil any more Can, we will be mining Hidrogen3 from the moon in 20-30 years all our energy problems are solved!

Temjin,

That's a interesting fact I think there are alot of people right now thinking we will have a massive plunge, from the end of September to October anniversary of black Wednesday.

Its very weired that two of the big market meltdowns were years ending with a 7. eg 87 97.

Interesting couple 4-6 weeks coming up!


----------



## numbercruncher (10 September 2007)

CanOz said:


> Has anyone seen Henry Paulson trying to put a positive spin on the jobs data?
> 
> Check this out, i really felt sorry for him, he's really sounding desperate here....and this coming from the once, top gun at Sachs.
> 
> ...





omg, obviously someone not comfortable in Lying, Interviewer should of asked him where he has his money invested at the moment


----------



## sassa (11 September 2007)

noirua said:


> Most Banks have not declared their potential sub-prime losses and until this is done the credit-crunch is set to stick around.




And this presents another problem.In an article in The Australian business section today,David Wighton and Jeremy Grant,state that leading commercial and investment banks have held private talks about how to account for losses in their leveraged lending and securities businesses.
"The discussions reflect concern that the various banks could make very different judgments about the impact of the market turmoil.Banks have a high degree of DISCRETION about how to value the losses....."
So what picture will we really get when banks start reporting their quarterly forecasts if they use different approaches to valuing.
It doesn't say much for the honesty of banks when an executive says that some of its American and European rivals will be "playing games."
The most concerning statement was by Cubillas Ding(an analyst at a financial consultancy),"Banks have a high degree of discretion on valuations and the process was subject to conflicts of interest and manipulation."
Now if banks were to use market prices to value their securities instead of 'models' we would get an honest assessment.I hope.


----------



## numbercruncher (22 September 2007)

> The credit crisis could just be beginning
> 
> By Jon D Markman
> 
> Satyajit Das is laughing. It appears I have said something very funny, but I have no idea what it was. My only clue is that the laugh sounds somewhat pitying. One of the world’s leading experts on credit derivatives (financial instruments that transfer credit risk from one party to another), Das is the author of a 4,200-page reference work on the subject, among a half-dozen other tomes. As a developer and marketer of the exotic instruments himself over the past 30 years, he seemed like the ideal industry insider to help us get to the bottom of the recent debt crunch ”” and I expected him to defend and explain the practice. I started by asking the Calcutta-born Australian whether the credit crisis was in what Americans would call the “third inning.” This was pretty amusing, it seemed, judging from the laughter. So I tried again. “Second inning?” More laughter. “First?” Still too optimistic. Das, who knows as much about global money flows as anyone in the world, stopped chuckling long enough to suggest that we’re actually still in the middle of the national anthem before a game destined to go into extra innings. And it won’t end well for the global economy.




http://www.dailytimes.com.pk/default.asp?page=2007%5C09%5C22%5Cstory_22-9-2007_pg5_21

Pretty good read I think this was the same guy interviewed on TV the other night on a doc on the subprimes.


----------



## Buffettology (23 September 2007)

I am still VERY hesitant to put some of my cash into the market.  I just transferred about another 5% of my portfolio to cash for the moment.

Think I will sit out the next few weeks and see where it takes us.

This "sub-prime mortage market" thing is meant to be FAR BIGGER than it appears from the sources I have been reading.  With some even talking about a depression, let alone a recession!

While I disagree, I think a bit of fear creeping in could provide some great buy opportunities as it did a few weeks back (though I wasnt bold enough to capitalise on these low prices).  

Very interesting times!  Though I have made 15% in the last few months, while the market has moved sideways (with high volatility of course).  So not doing too bad out of it.


----------



## krisbarry (16 October 2007)

sassa said:
			
		

> My financial planner has just pulled me in to reorganise my portfolio.He forecasts 5400 by Xmas and could even be as low as 5100.I have enjoyed a period of excellent growth-I entered 4 years ago when the market was 3800.




I hope you sacked your financial planner and have a new one


----------



## GreatPig (16 October 2007)

Better yet, do your own financial planning.

Then you've got no one else to blame...

GP


----------



## sassa (16 October 2007)

Stop_the_clock said:


> I hope you sacked your financial planner and have a new one



By Xmas was the prediction.He is like all stock market players and investors-he hopes his hunch is correct.There are plenty in the same boat just as there are plenty in the 7000 one.They all have reasons for their prediction and the nagging question to all investing is-Which way will the market go?My money is my own.I would not like to be a margin player or one who has not taken some defensive position in these uncertain times.


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## krisbarry (16 October 2007)

sassa said:


> By Xmas was the prediction.He is like all stock market players and investors-he hopes his hunch is correct.There are plenty in the same boat just as there are plenty in the 7000 one.They all have reasons for their prediction and the nagging question to all investing is-Which way will the market go?My money is my own.I would not like to be a margin player or one who has not taken some defensive position in these uncertain times.




Well I guess its closer to 7000, than 5400.  I also don't see too much in the line of doom and gloom. So lets raise our glasses and toast to 7000 by Xmas


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## dhukka (16 October 2007)

Stop_the_clock said:


> Well I guess its closer to 7000, than 5400.  I also don't see too much in the line of doom and gloom. So lets raise our glasses and toast to 7000 by Xmas




Take heed, the great contrarian indicator STC has spoken.


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## nioka (16 October 2007)

It is never the end of the bull run. He just goes to sleep at times. All anyone has to do is invest for the future and choose stocks which have a future and sound financials. Sit back and ignore the fluctuations in the market. You only ever lose money if you sell for less than you pay.


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## nikkothescorpio (16 October 2007)

At any other time in history one would definitely say that there's a number of signs there that would urge caution....however its simple a once in a lifetime event that China and India are 'awakening' and as such no real end to the run will come for some time.

Sure there might be a few pullbacks along the way but 1/2 the worlds population isn't just all of a sudden going to be happy to go without everything they've set their eyes upon.


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## nioka (4 February 2008)

Buffettology said:


> Firstly, as the name says, I am a firm believer in Buffetts investment methadology.  For this, I currently need to see the end of this bull.
> 
> Companies are currently overvalued, and the market has been a bull market for the past few years.  Very similar to the 87 crash situation, the market was a bull market from 82-87 from the top of my head, a very similar length of time to the current climate.  However, baby boomers pouring invesment dollars into the market, trying to gain as large returns as they can before their retirements, is definately a factor of which will maintain a sturdy bull market for the near future.
> 
> ...



 Reviewing your first post establishing this thread and noting you had at that stage pulled your funds out of the market, I would be interested to know if and when you returned to the market and whether you ended up in front of the position you would have been in if you had not been so convinced then that the end of the bull run was nigh.


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## Buffettology (4 February 2008)

nioka said:


> Reviewing your first post establishing this thread and noting you had at that stage pulled your funds out of the market, I would be interested to know if and when you returned to the market and whether you ended up in front of the position you would have been in if you had not been so convinced then that the end of the bull run was nigh.




ha ha, blast from a past this is!  Nearly a year ago now!

I ended up getting most of my funds back in the market, though, never at the highs.  I bought in and out multiple times.  I actually didnt even hold one stock the entire time since I got back in.

I think I got in around May (so a month after this post) and probably bought and sold at least 40 times over the year.  I made 50% before this latest crash (JST and EQN big contributors to that profit).  

Though, I was mostly all in at the time of this most recent crash, and lost about 25%.  I bought a couple stocks cheap during the crash, TOL, EQN and BKL, and have since sold all 3 for higher prices, cutting that loss to about 15%.  I only hold two stocks now, JST and DEX and have about 65% of my portfolio in cash.  

So once again, I am waiting for this bounce to end and us see another turn in sentiment! IR rise maybe announced in a couple days, surely more worse figures released in the US (inflation the big ? for me as I am sure GDP growth will continue to slow).

Am I better or worse off?  No idea.  If I held until we reached close to that 5200 just the other day, then I could have made a decent profit buying some of those cheap stocks.  But still, a 35% profit in a year (well actually higher, closer to 40% once I factor in bank interest for the time my money has been in cash), is probably better than if I stayed out of the market and bought in at the recent crash.


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## dutchie (20 August 2018)

Time to go long....
Stock market correction imminent, says Morgan Stanley


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## Logique (22 August 2018)

Nice find of a 10+ year dormant thread Dutchie! Also saw this bearish piece in the Telegraph, London:







> 22 August 2018 - By Jeremy Warner, Telegraph, London
> *Train wreck is coming: why markets look like an accident waiting to happen  *https://www.smh.com.au/business/mar...cident-waiting-to-happen-20180822-p4zyx5.html
> ....Yet there are at least four other factors, somewhat divorced from the usual ups and downs of the macro-economy, which are also flashing amber, if not outright red - buyback activity, valuation, computer-driven trading, and the related issue of artificial intelligence, or machine learning.....
> 
> ...The flash crashes of 2010 and 2015 were, I suspect, only harbingers of worse to come. Nobody can tell you when the next big train wreck might be, but that it is coming is not in doubt...


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## So_Cynical (22 August 2018)

Buffettology said:


> Sept 23 - 2007
> 
> This "sub-prime mortage market" thing is meant to be FAR BIGGER than it appears from the sources I have been reading.  With some even *talking about a depression*, let alone a recession!




Well who knew?


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## sptrawler (22 August 2018)

There is a concerted push to get inflation and interest rates moving, if that happens and Labor get in and hit negative gearing, capital gains and franking credits, then one would expect some ripple effect.


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