# SELL EVERYTHING!!! says Dow Theorist



## baby_swallow (20 May 2010)

Dow Theorist Richard Russell: "Sell Everything, You Won't Recognize America By The End Of The Year"


http://www.businessinsider.com/dow-...cognize-america-by-the-end-of-the-year-2010-5


----------



## professor_frink (20 May 2010)

LOL, get ready for a rally then

Richard Russell in October 2002, a couple of days before the low print in the bear market:

http://www.gold-eagle.com/gold_digest_02/russell100702.html



> *This is an historic bear market, and it has a long way to go* (aside from the periodic corrective rallies).




Richard Russell in early May 2007, shortly before the recent bear:

http://www.tradersnarrative.com/richard-russell-dow-theory-buy-signal-925.html



> Richard Russell didn’t miss them. He’s dedicated his life to the study of the markets through the prism of the Dow Theory and for the past 50 years written a newsletter called the Dow Theory Letters.
> 
> Recently he wrote:
> 
> “We saw something that is extremely rare, in fact I can’t remember ever having seen this before. What I’m referring to is that on those two dates all three Dow Jones Averages Industrials, Transports and Utilities ”” closed at simultaneous historic highs. To me, a fellow steeped in Dow Theory for over half a century, this was like a clap of thunder… *My take on the situation is that the stock market (and the Dow Theory) told us that an unprecedented world boom lies ahead.”*


----------



## Bushman (20 May 2010)

'If I read the stock market correctly, it's telling me that there is a *surprise ahead*. And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.'

Err so he thinks that the share market is now pricing in a 'suprise ahead'? So now analysts and brokers are also clairvoyants?


----------



## explod (20 May 2010)

professor_frink said:


> LOL, get ready for a rally then
> 
> Richard Russell in October 2002, a couple of days before the low print in the bear market:
> 
> ...




Gotta get it right oneday Prof., like belting the wall with ones head the wall must break one day too.


----------



## Timmy (20 May 2010)

baby_swallow said:


> You Won't Recognize America By The End Of The Year"




Big joint.  

Just south of Canada, and north of Mexico.  Between the two actually.  
Pacific on the West, Atlantic on the East (again, between the two).

Can't miss it.


----------



## Sean K (20 May 2010)

The world is stuffed. 

I was out a few months ago, and the continued bailout program confirms my view.

Around Dec 08 I was expecting the government support to be short and sharp to save complete disaster but it's gone beyond that now in my opinion.

A perfect storm is brewing.


----------



## nunthewiser (20 May 2010)

Anyone selling there missus?....

Oops wrong thread.


----------



## Naked shorts (20 May 2010)

nunthewiser said:


> Anyone selling there missus?....
> 
> Oops wrong thread.




if your selling missuses, I'd be willing to make you a market


----------



## drsmith (20 May 2010)

nunthewiser said:


> Anyone selling there missus?....
> 
> Oops wrong thread.



You could advertise as follows;



> *WANTED:* Good woman.
> 
> Must be able to clean, cook, say "Hail Mary" and iron habits and wimples.
> 
> Please forward photo of pressed habits and wimples.


----------



## trainspotter (20 May 2010)

kennas said:


> The world is stuffed.
> 
> I was out a few months ago, and the continued bailout program confirms my view.
> 
> ...




Hear ye Hear ye Hear ye ! Would someone please pull out the Ace of Spades to allow this house of cards to fall asunder.


----------



## jersey10 (20 May 2010)

I have heard there are a couple of globally respected traders / investors / theorists / economists who have said things along similar lines, perhaps not as extreme but proposing that the March 09 low will be broken.  Does anyone have any other links to youtube / articles etc.


----------



## Bobby (21 May 2010)

kennas said:


> The world is stuffed.
> 
> I was out a few months ago, and the continued bailout program confirms my view.
> 
> ...




Hello Kennas,
I don't post much on this site anymore but have to agree with you on the above .
I'm legally doing whats  possible for that coming nightmare scenario , just hope we are wrong hey !
Hope your covered ?

Bob.


----------



## noirua (21 May 2010)

Remain calm, the Great Storm will pass as it has always before.

Germany is trying to get out of saving Greece as the figures rise towards â‚¬100 billion. They'd like to see Greece go down and their debts with them.
More likely that Germany and France will leave the Euro and let other countries make up their mind.

Think about it guys. As long as America survives in the West then the rest have to accept that wealth is heading for Asia and the Far East (includes Australia). Let them get on with it.

Am I selling stock. Well, no more than before and I'm carrying on buying to take my cash down to 50%. Depends what your buying of course!


----------



## Aussiejeff (21 May 2010)

THEY'RE TRYING!!! says Dumb Aussiejeff


----------



## Monario (21 May 2010)

I tend to agree with the sell everything theory, unless your following individual stocks that is, and gold in these times is always a sure bet......

I was going to revive this old thread I started, did not seem to get a lot of response as we were in the middle (maybe a bit past it actually) of a bull!! https://www.aussiestockforums.com/forums/showthread.php?t=17481&highlight=bear+bull  but now it seems appropriate again.

You cant expect to artificially create a bull market with with governments around the world injecting trillions of dollars into the economy, not to mention the slow but large trickle back in by all the investment vehicles that pulled out during the "GFC".

I suspect there is a few more skeletons in the USA closet to come out over coming months also, especialy in the automotive industry, it was not enough that they spent 100's of billion sbailing them out directly then they went about artificially creating a market for them by introducing the "cash for clunkers" bill, i wonder what the next bailout for their auto industry will be? maybe the USA government will  offer to take over the 100'000 odd 401k's sitting on the back of the industry....

A very good summary from Peter Schiff. 

http://www.youtube.com/watch?v=Njg8GY_IRuw&feature=related

What was the name of that place inbetween canada and mexico?


----------



## explod (21 May 2010)

noirua said:


> Remain calm, the Great Storm will pass as it has always before.




And the sun bathed in gold will rise each day.

Now that the US dollar is reaching for the sky it has suddenly dawned that the actual value of debt rises with it.  Talk about shooting in the foot.


----------



## Monario (21 May 2010)

explod said:


> Now that the US dollar is reaching for the sky it has suddenly dawned that the actual value of debt rises with it.  Talk about shooting in the foot.




And why does it rise, thi sreally baffles me!!!! the aussie has lost more than 10% in the last 2 weeks, considering our position (compared to USA), I just dont see why.


----------



## Trembling Hand (21 May 2010)

Monario said:


> And why does it rise, thi sreally baffles me!!!! the aussie has lost more than 10% in the last 2 weeks, considering our position (compared to USA), I just dont see why.




Then you have no idea about what fundamentally moves markets. Flow of risk capital. Its clear to see were its flowing from and to.


----------



## Trembling Hand (21 May 2010)

I wounder if this thread will be as prophetic as the "buy with open arms" thread??


----------



## Bushman (21 May 2010)

Trembling Hand said:


> I wounder if this thread will be as prophetic as the "buy with open arms" thread??




Lol, classic!


----------



## Monario (21 May 2010)

Trembling Hand said:


> Then you have no idea about what fundamentally moves markets. Flow of risk capital. Its clear to see were its flowing from and to.




Trembling, I totaly understand that!! what I dont understand is how people can think the USA poses less risk than Australia at the moment!!


----------



## Trembling Hand (21 May 2010)

Monario said:


> Trembling, I totaly understand that!! what I dont understand is how people can think the USA poses less risk than Australia at the moment!!




Mate I disagree, you don't understand IMHO what moves markets. Risk capital dose not originate from Australia but from the US, Japan, EUR (large economies with low interest rates)

When that capital is moving away from risk it has to flow back to where it came. Thus the falls in our currency. It has nothing to do with your line of thinking.


----------



## baby_swallow (21 May 2010)

Monario said:


> Trembling, I totaly understand that!! what I dont understand is how people can think the USA poses less risk than Australia at the moment!!




Unfortunately overseas fund managers  look at the Aussie as a commodity based currency, and so the Australian markets. You don't have to do to many research to figure out where the Australian market is going - just look at the price of copper. (Yes!).. for me, Copper = China = BHP = Australia. There you go... my secret indicator!!!  lol


----------



## Mofra (21 May 2010)

baby_swallow said:


> Unfortunately overseas fund managers  look at the Aussie as a commodity based currency, and so the Australian markets. You don't have to do to many research to figure out where the Australian market is going - just look at the price of copper. (Yes!).. for me, Copper = China = BHP = Australia. There you go... my secret indicator!!!  lol



Our two biggest export markets are iron ore & coal, if you're looking for leading indicators. May be a little harder though to watch the bulk goodies that don't have transparent LME prices to follow.


----------



## Bushman (21 May 2010)

baby_swallow said:


> Unfortunately overseas fund managers  look at the Aussie as a commodity based currency, and so the Australian markets. You don't have to do to many research to figure out where the Australian market is going - just look at the price of copper. (Yes!).. for me, Copper = China = BHP = Australia. There you go... my secret indicator!!!  lol




Yep spot on - it is the good old carry trade unwinding. Borrow in low interest rate markets, invest in high yielding currencies like the Aussie dollar or risk assets like commodities. When you are worried about GDP, unwind the carry trade and flee to safety. 

I agree that copper is the canary on the coal mine for global GDP.

Same happened around the time of Lehman Brothers. In the 12-months before that it was all 'AUD parity with USD'.


----------



## Sir Osisofliver (21 May 2010)

OK I'll bite, why SELL everything rather than

a) short or

b) hedge

I mean I remember a number of people on these very boards about a year ago saying something along the lines of "I've just missed out on the best shorting market for 20 years because I didn't have the balls."  Why does a "professional" commentator saying SELL rather than SHORT?


Cheers 
Sir O


----------



## baby_swallow (21 May 2010)

Sir Osisofliver said:


> OK I'll bite, why SELL everything rather than
> 
> a) short or
> 
> ...




He just wanted his clients to stay in cash rather than having short positions to play it "safe".  
Two scenarios: 
a) If they are short and market reverses - they're stuffed. 
b) If they are in cash and the market tanked - then some good buying opportunities.


----------



## Sir Osisofliver (21 May 2010)

baby_swallow said:


> He just wanted his clients to stay in cash rather than having short positions to play it "safe".
> Two scenarios:
> a) If they are short and market reverses - they're stuffed.
> b) If they are in cash and the market tanked - then some good buying opportunities.




So to paraphase his comments can be boiled down to - I *think* that this market is going down but I'm not really really sure. So don't position yourself to make money from this and don't hedge against the risk I see. Rather you should sell everything and convert it all to cash and gold.


Cluck cluck chicken little.

Cheers

Sir O


----------



## Aussiejeff (21 May 2010)

BUY EVERYTHING!!! says ASX watcher...



[size=-4]Well, SOMEONE has been...since 11.15am[/size]

Hey, sir Osi's post was about then too.... hmmm????


----------



## Bushman (21 May 2010)

Aussiejeff said:


> BUY EVERYTHING!!! says ASX watcher...
> 
> 
> 
> ...




I've just gone 100% tinned foods. Best asset class I know.


----------



## Sir Osisofliver (21 May 2010)

Aussiejeff said:


> BUY EVERYTHING!!! says ASX watcher...
> 
> 
> 
> ...




I didn't do it.

Cheers

Sir O


----------



## skyQuake (21 May 2010)

Sir Osisofliver said:


> I didn't do it.
> 
> Cheers
> 
> Sir O




Also about the time gold popped down $10


----------



## Bill M (21 May 2010)

jersey10 said:


> I have heard there are a couple of globally respected traders / investors / theorists / economists who have said things along similar lines, perhaps not as extreme but proposing that the March 09 low will be broken.  Does anyone have any other links to youtube / articles etc.




Here's one for ya. This so called expert reckons the DOW will crash to

3400  

http://www.youtube.com/watch?v=AEsAjYXlLuI


----------



## Moneybags (21 May 2010)

kennas said:


> The world is stuffed.
> 
> I was out a few months ago, and the continued bailout program confirms my view.
> 
> ...




Kennas.......for once I agree with you.......I have exited the market of all my positions over the last few weeks and will be concentrating on saving for the next little while.

MB


----------



## wayneL (21 May 2010)

Bill M said:


> Here's one for ya. This so called expert reckons the DOW will crash to
> 
> 3400
> 
> http://www.youtube.com/watch?v=AEsAjYXlLuI




Hmmm... This is the man who in 2006 predicted the Dow hitting 40,000 by the end of the decade.

BUY BUY BUY


----------



## explod (21 May 2010)

Bill M said:


> Here's one for ya. This so called expert reckons the DOW will crash to
> 
> 3400
> 
> http://www.youtube.com/watch?v=AEsAjYXlLuI




Some ASF's stated this two years ago, without exact time frame, but inferring back then the next year or two.  Its all just a matter of thinking about the values of money and doing a bit of a sum or two in the head.

If you look at the Dow chart back to 1997 you will see that the main support is at around 7000     Now the rise from this level was on the provision of cheap money (lower interest rates)  So the rise is backed by a lot of borrowing from there.   We now in the US have virtually zero rates yet still the market looks iffy to say the least.   The crash of 08  went in 09 below that support area for a short time.    However a soloid fall through the support sees the next convincing support area at around 4000, the next at 3500 and the bottom support at 2000

Now some of the household names in banking have done it to worthless, why not the Dow.   I think it will.


----------



## noirua (21 May 2010)

Trembling Hand said:


> I wounder if this thread will be as prophetic as the "buy with open arms" thread??



Well, it's more a case of propitious thinking than of a prophetical nature of propheCy, and at least it was propheSy. Whether shares became proprietorial was for your own indications to make and mine, more as an action of a propounder.


----------



## nunthewiser (21 May 2010)

noirua said:


> Well, it's more a case of propitious thinking than of a prophetical nature of propheCy, and at least it was propheSy. Whether shares became proprietorial was for your own indications to make and mine, more as an action of a propounder.




Ah ha

sounds Propopostrus to me


----------



## Smurf1976 (21 May 2010)

jersey10 said:


> I have heard there are a couple of globally respected traders / investors / theorists / economists who have said things along similar lines, perhaps not as extreme but proposing that the March 09 low will be broken.  Does anyone have any other links to youtube / articles etc.



Having read the comments of many well educated people on the subject, it has long been my understanding that the US entered a _secular_ bear market in 2000 and that the various sharp rallies and corrections since are simply part of that. Such secular bears tend to last 1 - 2 decades and ultimately result in markets returning to low _valuation_ levels.


----------



## Smurf1976 (21 May 2010)

Monario said:


> Trembling, I totaly understand that!! what I dont understand is how people can think the USA poses less risk than Australia at the moment!!



It has its' troubles certainly, but the US Dollar is still the world's senior currency whereas the AUD is virtually irrelevant to most of the world.


----------



## MR. (21 May 2010)

Monario said:


> what I dont understand is how people can think the USA poses less risk than Australia at the moment!!




All the currency education one needs:

http://www.abc.net.au/news/video/2010/05/20/2905304.htm


----------



## roland (21 May 2010)

Smurf1976 said:


> It has its' troubles certainly, but the US Dollar is still the world's senior currency whereas the AUD is virtually irrelevant to most of the world.




and even more relevant since Greece helped to discredit the stability of the Euro


----------



## Monario (21 May 2010)

MR. said:


> All the currency education one needs:
> 
> http://www.abc.net.au/news/video/2010/05/20/2905304.htm




Hahaha, thats great!!!


----------



## noirua (22 May 2010)

Smurf1976 said:


> It has its' troubles certainly, but the US Dollar is still the world's senior currency whereas the AUD is virtually irrelevant to most of the world.




There may be TROUBLE AHEAD: http://www.youtube.com/watch?v=TnfKmNRfLYU&feature=related


----------



## Aussiejeff (22 May 2010)

professor_frink said:


> LOL, get ready for a rally then




***BINGO!!!***


----------



## Bill M (22 May 2010)

explod said:


> Now some of the household names in banking have done it to worthless, why not the Dow.   I think it will.




I hope not explod, the world will be in a terrible mess if it does. By the way, if the markets, housing, commodities and even the banks aren't safe places any more where does one put his hard earnt? Where is it safe? A slab of physical gold under the bed or in your 23kg safe at home isn't safe as I'm sure you would agree, any ideas?


----------



## explod (22 May 2010)

Bill M said:


> I hope not explod, the world will be in a terrible mess if it does. By the way, if the markets, housing, commodities and even the banks aren't safe places any more where does one put his hard earnt? Where is it safe? A slab of physical gold under the bed or in your 23kg safe at home isn't safe as I'm sure you would agree, any ideas?




Stockpile the backed beans, grow some spuds and build a very high fence.

Oh and bury the gold 4 foot down in a plastic shopping bag and dig it up when everyone else has perished or, if you do have to venture down to the pub, dig it up at night time on a new moon. 

But it is worth looking back over the dow chart and comparing it to others that have gone from something to nothing.  We will be shown the way.


----------



## Bill M (22 May 2010)

I have been watching a few long term so called experts that predict a crash of this magnitude. These people say that there is a lot of baby boomers who will be cashing in all their chips within the next 2 years. There seems to be some merit to the argument.

Every single person I know doesn't trust superannuation and the share market. They have lost huge amounts of monies from their funds and they are not in an investing and trusting mood. A lot will cash in if the markets jump again and these jokers that see into the future could be right. 

I prefer to think for myself, I do not think the world will come to an end. Sure it is messy right now but my old Mother survived the Great Depression and WW2 and everything that followed there after and this is nothing like that.

I am hanging on to my investment property and my shares and as shares drop further I will buy more good quality stock. A point will come in time when my cash for investments is exhausted but not before I have 10% gross income from what I am buying. I am very patient and if cheaper prices don't come my way then 6% at call is looking good, cheers.


----------



## So_Cynical (22 May 2010)

Aussiejeff said:


> BUY EVERYTHING!!! says ASX watcher...
> 
> 
> 
> ...




My little PFL buy order was filled at 11.20


----------



## noirua (22 May 2010)

NO WORRIES! Ye're, and I'm not taking the urinal here. What the hell was the reason for this sharp correction, well, a lot of people bought into the talk that there was going to be a correction, so they sold, and bingo the correction happened.
What of Greece then? To hell with Greece; one it's small and wont have much effect on anyone except the Eurozone.
The States, Germany and Japan are doing better now and that easily offsets the little failures. Just as if a small company is in financial trouble and Dad, Grandad, Uncles and Aunie pile in cash to save it; what do you mean? - well that's much like Greece.

Where's my confidence then? I bought stock Thursday and Friday to take my cash levels to 50%, that's 20% below my usual 70% level. Hell, do I see a crash; NO! I see an opportunity.


----------



## Julia (22 May 2010)

Bill M said:


> I have been watching a few long term so called experts that predict a crash of this magnitude. These people say that there is a lot of baby boomers who will be cashing in all their chips within the next 2 years. There seems to be some merit to the argument.



And what do they suggest those baby boomers will do with the cash?
They are still going to need to derive an income.



> Every single person I know doesn't trust superannuation and the share market.



"Doesn't trust superannuation"?????Super is simply a tax-advantaged vehicle in which to hold assets.  It is not an investment of itself.  Its success or otherwise depends on the choice of assets held in the super fund, and the proper timing in management of these.
To say that someone doesn't trust superannuation just doesn't make sense.



> They have lost huge amounts of monies from their funds and they are not in an investing and trusting mood.



I'm puzzled by the idea that anyone would 'trust the markets'.  No one ever promised them that by buying shares (within or outside Super) meant that they would always make money *if they didn't take the trouble to acquire some financial education and manage the shares accordingly.*
I can understand someone saying they will no longer trust their financial adviser, but it just doesn't apply to 'the market'.




> I prefer to think for myself, I do not think the world will come to an end. Sure it is messy right now but my old Mother survived the Great Depression and WW2 and everything that followed there after and this is nothing like that.



So far that's true.  However, I'm reminded with some of the optimistic comments of all the experts who at the start of the GFC said "oh, subprime won't affect anyone outside of the US.  It's nothing really.  And we're decoupled from the US, anyway."
Didn't quite turn out that way, did it!

There's an excellent article by Paul Kelly in "The Australian" on, I think, Wednesday 19 May, where he describes people who dismiss the ramifications of the Europe situation as fools.



> I am hanging on to my investment property and my shares and as shares drop further I will buy more good quality stock. A point will come in time when my cash for investments is exhausted but not before I have 10% gross income from what I am buying. I am very patient and if cheaper prices don't come my way then 6% at call is looking good, cheers.



Each to his own.  Personally, I prefer to protect my profits and my capital and stay in cash until it's all sorted.  Probably I have a poor appetite for risk.



noirua said:


> NO WORRIES! Ye're, and I'm not taking the urinal here. What the hell was the reason for this sharp correction, well, a lot of people bought into the talk that there was going to be a correction, so they sold, and bingo the correction happened.
> What of Greece then? To hell with Greece; one it's small and wont have much effect on anyone except the Eurozone.



You may be right.  A lot of people would disagree with you.  I find it hard to see that shifting around the debt, thus contaminating the balance sheets of nations healthier than Greece et al, is any real solution.
For the last nearly three years, there has been bandaid after bandaid, artificial stimulation of markets to keep things afloat.  Do we all really think that this can go on for ever - more and more bailing out?


----------



## nunthewiser (22 May 2010)

noirua said:


> NO WORRIES! Ye're, and I'm not taking the urinal here. What the hell was the reason for this sharp correction, well, a lot of people bought into the talk that there was going to be a correction, so they sold, and bingo the correction happened.
> What of Greece then? To hell with Greece; one it's small and wont have much effect on anyone except the Eurozone.
> The States, Germany and Japan are doing better now and that easily offsets the little failures. Just as if a small company is in financial trouble and Dad, Grandad, Uncles and Aunie pile in cash to save it; what do you mean? - well that's much like Greece.
> 
> Where's my confidence then? I bought stock Thursday and Friday to take my cash levels to 50%, that's 20% below my usual 70% level. Hell, do I see a crash; NO! I see an opportunity.




But according to the " buy with open arms " thread .um you been buying from the recent HIGHS all the way down........ 

funny place the internet .


----------



## noirua (22 May 2010)

Julia said:


> You may be right.  A lot of people would disagree with you.  I find it hard to see that shifting around the debt, thus contaminating the balance sheets of nations healthier than Greece et al, is any real solution.
> For the last nearly three years, there has been bandaid after bandaid, artificial stimulation of markets to keep things afloat.  Do we all really think that this can go on for ever - more and more bailing out?




Much of investment is looking back in history. I remember the events in 1973-76 during the great crash. This was the end, they said; hell, it wasn't. A great boom followed and the biggest mining boom in the history of the planet Earth.
People talked in profit terms in 10 baggers. Many stocks shot up to 100 baggers. The new world had arrived. It's different this time, they said. Upwards, onwards for ever. Hell it wasn't. The biggest mining collapse in the history of planet Earth. followed.
Up they went again and collapsed in 1987. So on and so forth.
Stock prices. imho, are dirt cheap and a boom will arrive and when it couldn't happen, a collapse will follow.

As to debt: What is it? I think a countries debts depend upon all the assets held by every person in the country. The UK is in the debts doo doo, - or is it really? No, as its assets owned abroad are 4 times all the debts. That's what it is all about really; you can owe $3 trillion but if all your assets add up to $10 trillion then you have zero short term problems.

Greece is a bit different as its assets are in doubt. Still, there are many historical parts of Greece which they could hive off for a fortune.

Aussie stocks appear very cheap and some like Woolworth, and many more of course, are worth $40 a share. I think, imho, Woolworth know this and their buyback goes on. 

The collapse of 2000/2001 desimated markets, imho imho, a boom is yet to come.


----------



## Smurf1976 (23 May 2010)

Julia said:


> "Doesn't trust superannuation"?????Super is simply a tax-advantaged vehicle in which to hold assets.  It is not an investment of itself.  Its success or otherwise depends on the choice of assets held in the super fund, and the proper timing in management of these.
> To say that someone doesn't trust superannuation just doesn't make sense.



I don't trust it for the simple reason that government, not me, is largely in control. They could announce tomorrow that it is locked up until I'm 70, 80 or 100 years old if government so chooses. That's a huge risk over and above the normal market risks of investing.


----------



## Bill M (23 May 2010)

Julia said:


> And what do they suggest those baby boomers will do with the cash?
> They are still going to need to derive an income.



He is suggesting people liquidate their investment properties and stocks and go to cash and when the depression hits you will be able to buy assets very very cheap.

From the hsdent website:
---
Between mid to late 2009 and mid to late 2012, the U.S. will see the next Great Depression and the deflation of the “three bears,” bubbles in stocks, housing, and commodities. This occurrence will represent the de-leveraging of the greatest credit bubble in history and will have much greater effects
than we have seen thus far on banking and financial systems. Americans will see the first and last “Great Depression” of most of our lifetimes. Most people simply are not prepared for this coming dramatic change in our economy. 
---
Click here for that link




> "Doesn't trust superannuation"?????Super is simply a tax-advantaged vehicle in which to hold assets.  It is not an investment of itself.  Its success or otherwise depends on the choice of assets held in the super fund, and the proper timing in management of these. To say that someone doesn't trust superannuation just doesn't make sense.



Unfortunately the average Australian hasn't much of a clue about investments and only a bit of a clue about superannuation. Most of them have never heard of ASF and have no interest in reading similar forums. Simple comment over the fence to my neighbour the other day, he is a mechanic. I said I am loading up my super and he said mines gone down, there is no point putting money into that. Loads of younger Aussies think like that and if I was 30 with 30 years to go I probably would too.




> I'm puzzled by the idea that anyone would 'trust the markets'.  No one ever promised them that by buying shares (within or outside Super) meant that they would always make money *if they didn't take the trouble to acquire some financial education and manage the shares accordingly.*
> I can understand someone saying they will no longer trust their financial adviser, but it just doesn't apply to 'the market'.



Classic case, a mate of mine retired about 3 years ago. He knows nothing about finance but was a good property investor. His super was not going to pay him anything for 3 years so he went to a financial planner who suggested he buy a basket of shares with the cash he had left to see him through. That basket went down 50% in value and is probably still down about 30%, he said to me that he will never ever put another $1 into any shares again. He says it was the biggest rip off investment he had ever had. There are heaps of people who think like this. I have other friends who have suggested that the stockmarket is nothing more than just a gambling den. They refuse to listen to any rational argument and will not invest in it.




> So far that's true.  However, I'm reminded with some of the optimistic comments of all the experts who at the start of the GFC said "oh, subprime won't affect anyone outside of the US.  It's nothing really.  And we're decoupled from the US, anyway."



No doubt, anything the US markets do we shall follow. Decoupled? little old Australia and it's 1.75% of the whole world economy? Never, I agree.




> Each to his own.  Personally, I prefer to protect my profits and my capital and stay in cash until it's all sorted.  Probably I have a poor appetite for risk.



Considering what happened when the all ords hit 3100 and the ridiculously low valuation of our stock market I did quite well. I always buy at lower prices and not when the market is reaching tops. The hard part is trying to pick those lows. lets use CBA as an example, no one was buying it when it was $26, not even when it was a share purchase plan at a discount and yet 12 Months later some people were paying $60 for it. I bought heaps of it in the $20's and some in the 40's then I bought that house and I sold the lot in the $50's. It's all about buying low when blood is in the streets and everyone is panicking for no real reason.



Smurf1976 said:


> I don't trust it for the simple reason that government, not me, is largely in control. They could announce tomorrow that it is locked up until I'm 70, 80 or 100 years old if government so chooses. That's a huge risk over and above the normal market risks of investing.



That is exactly right and they did this already once. 23 years ago I walked into The Colonial Mutual Head office in Sydney and saw someone about getting a super plan going. The advisor told me how the money would accumulate and how much I would have at age 55. He said that I could withdraw the lot at age 55. Then in the 90's the government of the day changed the rules and made the withdrawal age 60. Luckily it does not affect me because I was born before July 1960 but anyone say 30 or 40 y/o now has to wait until 60, they were lied too. What next as you say? 65? 70? 80?


----------



## explod (23 May 2010)

Bill M, what a very good post, thanks for sharing your insights and I think you are spot on.

In particular as the words go "some people yar just caant reach"

And my sardonic comment a few posts back was unfair.   I believe physical bullion to be a very good investment *at this time* and I keep my silver in a personal access bank vault.


----------



## Bill M (23 May 2010)

explod said:


> In particular as the words go "some people yar just caant reach"



By the way, I just read an article in the Commsec Market Bulletin that just goes to show how much some people care about their super.

According to the ATO at the end of the last financial year there was *$13.5 Billion dollars* value of lost super in Australia, Unbelievable.


----------



## Julia (23 May 2010)

Smurf1976 said:


> I don't trust it for the simple reason that government, not me, is largely in control. They could announce tomorrow that it is locked up until I'm 70, 80 or 100 years old if government so chooses. That's a huge risk over and above the normal market risks of investing.



That's a reasonable point and as I'm already using my Super, one I wasn't thinking about.
But everyone is still going to have to save for their retirement, whenever that occurs.  What I was suggesting is that people need to become more involved in managing their Super and either have a SMSF where they can make decisions re asset allocation all the time, or understand markets enough to give their public Super fund appropriate direction.

No one (so far!) has suggested all personal savings have to go into Super, but for someone on the highest personal tax rate, it makes good sense to have some taxed at just 15%.

However, given the ageing population, I guess it's not impossible that the preservation age will be extended, along with the official retirement age.




Bill M said:


> He is suggesting people liquidate their investment properties and stocks and go to cash and when the depression hits you will be able to buy assets very very cheap.
> 
> From the hsdent website:
> ---
> ...



Sounds dire, doesn't it!  If he's only just now suggesting liquidating stocks when we've had a fall in the XAO of around 15% and could be at or close to a bottom (for now), that's just locking in losses.
I can't comment about investment property as I haven't had any for some time, but would be far more inclined to hold that through any market corrections.

But if you moved to cash a couple of weeks ago, then obviously you're in a good position to buy some cheap stocks.  All I'm suggesting is that this strategy beats buy and hold through thick and thin because by preserving your capital you have the capacity to buy more shares (and hence derive more dividend income if that's important to you) than you had before.

---




> Unfortunately the average Australian hasn't much of a clue about investments and only a bit of a clue about superannuation. Most of them have never heard of ASF and have no interest in reading similar forums. Simple comment over the fence to my neighbour the other day, he is a mechanic. I said I am loading up my super and he said mines gone down, there is no point putting money into that. Loads of younger Aussies think like that and if I was 30 with 30 years to go I probably would too.



That's undoubtedly true, Bill.  In fact I recall when I was about 30 joining a new company and being offered participation in the Super scheme.  I rejected it totally with the preference of making my own provision for the years ahead.

Your other example is, I know, also typical.

I suppose I'm just protesting against this widespread ignorance and reluctance to take some responsibility for financial outcomes.
Perhaps I'm being too tough, but to me it's another symptom of how too many people expect governments and society at large to take responsibility for looking after them.

The current petition from Storm Financial clients to be compensated for their losses by the taxpayer is a case in point.
Why should those who are financially responsible necessarily have to provide for those who just can't be bothered to educate themselves?
Too much of a socialist philosophy for me.
It's one thing to help those unable to help themselves, e.g. the sick, disabled, genuinely disadvantaged and I'm all for way more of this happening, but I'm just getting damn sick of people who are irresponsible wanting others to make it all better for them.

Apologies for the rant.


----------



## local (23 May 2010)

Looking at these charts and if you believe in divergence
you have to SELL everything.


----------



## professor_frink (23 May 2010)

local said:


> Looking at these charts and if you believe in divergence
> you have to SELL everything.




here's another great example  of that happening in the DOW. This great divergence trade saw the DOW up near 1000 a few years later


----------



## namrog (23 May 2010)

Julia said:


> It's one thing to help those unable to help themselves, e.g. the sick, disabled, genuinely disadvantaged and I'm all for way more of this happening, but I'm just getting damn sick of people who are irresponsible wanting others to make it all better for them.
> 
> Apologies for the rant.




Very well said Julia,, if taken within the context that I think you mean, and having said so , there are many levels to which this applies, and if such thing as a level playing field exists or ever existed, then isn't your bank guaranteed 6% or whatever your getting for your cash from a "government guaranteed bank"  a case of others taking the responsibility i.e. taxpayers ? despite this not being your decision.., a case of others taking up the slack ?
Mind you, there'nothing stopping all of us doing the same thing...

My point being, that almost somewhere along the line, our finances are controlled by some other entity, like it or not. and most times  by the government !!!!

By the way Julia, I agree with almost all else you say. 

Local, what are those charts from or off  ???

Most of the divergence that I see in those charts has already played out, and don't prove much at all, no offence meant, just my reading of it ...


----------



## explod (23 May 2010)

> professor_frink
> Moderator
> 
> Looking at these charts and if you believe in divergence
> ...




One of the great problems with charts, particularly from different periods is that they do not reflect underlying fundamentals.   It will be also noted that chart behaviour over time in different stock classes also behave differenty.

This is not directed at you prof., but when I looked at your time period it was just after the 2nd WW, industry was just moving again, I remember on the farm wool going through the roof because there was a large and growing market.    I do think things may be vastly different today and the precarious way in which the great financial gurus are trying to print money to keep our heads up is failing and the market, which required the support of good business like in 1955 is just not there.

So you are correct, charts can be read in many ways but are particularly looked at by many in the way of the wish.

Its boring when the markets are closed.


----------



## Julia (23 May 2010)

namrog said:


> if such thing as a level playing field exists or ever existed, then isn't your bank guaranteed 6% or whatever your getting for your cash from a "government guaranteed bank"  a case of others taking the responsibility i.e. taxpayers ? despite this not being your decision.., a case of others taking up the slack ?
> Mind you, there'nothing stopping all of us doing the same thing...



I hardly think a comparison between someone diverting shares to cash can be compared with people who borrowed on their homes with a high LVR to buy shares, then further took out a margin loan on the shares bought with that borrowed money, then finally failed to put in place any protective mechanism for a market turn down.
These are the people now asking for a taxpayer funded compensation of their losses.

And to suggest there was ever any likelihood of the government guarantee actually being called on is laughable.  It was simply put in place as a purely political measure (and sensibly at the time) to avoid panic withdrawing of bank funds.  Our banks at all times are overseen quite diligently by APRA, and the government knew very well there was no financial reason to offer the guarantee.


----------



## billv (23 May 2010)

Bill M said:


> if the markets, housing, commodities and even the banks aren't safe places any more where does one put his hard earnt? Where is it safe? A slab of physical gold under the bed or in your 23kg safe at home isn't safe




Gold under the bed and a loaded shotgun sounds good 

It's not pretty out there and IMHO current share prices haven't adjusted for the amount of risk visible in the horizon.

The risk of government defaults is currently small but is increasing. The problem is with government deficits worldwide which are at record high levels and are becoming unsustainable. Everyone says let's spend now to keep our economies afloat and better times will come next year. 

But the fact is that they've been doing this for 2 years in a row and now entered a 3rd year. They can't be doing this forever. They're staying above water with borrowed money. At the same time bad debt from the private sector is slowly passing over to governments who chose not to let their banking institutions lose money.

If this continues the debt situation of some countries will get to levels of no return.

http://www.abc.net.au/sundayprofile/stories/2906914.htm?site=sydney


----------



## local (23 May 2010)

Namrog 
This is SPX and DJI

Some years ago I had this little program called Echart where you could backtest any of indicators.
For the period I backtested quite few stocks absolutely most came out losses.
This is TA.


----------



## Wysiwyg (23 May 2010)

billv said:


> The risk of government defaults is currently small but is increasing. The problem is with government deficits worldwide which are at record high levels and are becoming unsustainable.




Well .... where IS all the money going to or has it disappeared into thin air? Surely the borrower 'and'   lender aren't both in debt?


----------



## billv (23 May 2010)

Wysiwyg said:


> Well .... where IS all the money going to or has it disappeared into thin air? Surely the borrower 'and'   lender aren't both in debt?



Good question, someone must be printing paper.
I'm sure the US are and perhaps it's time for the ECB to start the printing press going as well...

Actually, I don't know if I understood your question correctly.

Maybe the example of Greece will clear things up.
In the past the Greek Gov. issued their own bonds which were bought by German superannuation funds, insurance companies etc.
These bonds are now maturing but as they mature they are being replaced by EU and IMF backed loans or will be even bought by the ECB.
So just like the subprime loans we now have a situation where bad loans are moving from being a problem of the private sector and are becoming a problem of the public sector.
http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html


----------



## namrog (24 May 2010)

Julia said:


> I hardly think a comparison between someone diverting shares to cash can be compared with people who borrowed on their homes with a high LVR to buy shares, then further took out a margin loan on the shares bought with that borrowed money, then finally failed to put in place any protective mechanism for a market turn down.





Fair enough, in hindsight it was a silly statement to make...one extreme example to another possibly...

Local, yes I know what it is , and agree that hard to severe divergence for want of better words usually lead to a reversal of direction, but not always, and in my humble oppinion the divergence in your charts is mild enough at this stage to hold off on a decision , thats only my oppinion though, and will probably be proven wrong...


----------



## professor_frink (24 May 2010)

explod said:


> One of the great problems with charts, particularly from different periods is that they do not reflect underlying fundamentals.   It will be also noted that chart behaviour over time in different stock classes also behave differenty.
> 
> This is not directed at you prof., but when I looked at your time period it was just after the 2nd WW, industry was just moving again, I remember on the farm wool going through the roof because there was a large and growing market.    I do think things may be vastly different today and the precarious way in which the great financial gurus are trying to print money to keep our heads up is failing and the market, which required the support of good business like in 1955 is just not there.
> 
> ...




Can't disagree with you there explod. Times are very different. 

The only reason I posted it up was that someone said that "if you believe in divergence you have to sell everything", and I wanted to show that if you believed in divergence you would have sold in the early 60's just before the market went on a good rally. The divergence follower would have also sold in the early 90's when the DOW was at 2500. Divergence on a monthly chart that has an upward bias isn't going to give very many good signals. By the time you get a confirmed divergence the market has already taken a dump and is ready to reverse. One would literally need the next great depression to arrive to have made the right decision in selling out.

I'll leave the discussion about whether that's happening now to the economists of the forum


----------



## billv (24 May 2010)

*No one will bail out America as EU did for Greece*

If you think its safe out there, think again


> The European Union has put forth its rescue plan. The U.S. stock markets have stabilized. And the protests in Greece have receded from the headlines. All's well, right?
> 
> No, not even close.
> 
> ...



http://www.sun-sentinel.com/news/op...eral-deficit--us-gree20100524,0,4637768.story


----------



## baby_swallow (25 May 2010)

Here's from ZeroHedge.com

I Know What Keeps Obama Awake at Night IISubmitted by madhedgefundtrader on 05/24/2010 08:06 -0500

While Obama spent the weekend shorting through contradictory primary results, trying to figure out what next to say about the Gulf oil spill, and basking in the afterglow of his Senate win on financial reform, a potential nightmare is giving him sleepless nights. 

The $887 billion stimulus wad has now been mostly spent or committed, delivering us with a couple of quarters of decent growth. The effect was no doubt help by the Fed’s ZIRP strategy and massive housing subsidies. The “V” is in. Once the effects of this spendfest wear off, we slip back into a deep recession, setting up the classic “W.” Unemployment stays stick in the high nines, and around 18% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits, and the underemployed. This afflicted Franklin D. Roosevelt in the thirties. 

So Congress passes another $1 trillion reflationary budget. Everybody gets wonderful new mass transit upgrades, alternative energy infrastructure, smart grids, and bridges to nowhere. But with $2 trillion in extra spending packed into two years, inflation really takes off. The bond market collapses, as China and Japan boycott the Treasury auctions. The dollar tanks big time, gold breaks $2,300, and silver explodes to $50. Ben Bernanke has no choice but to engineer an interest rate spike to dampen inflationary fires and rescue the dollar, taking the Fed funds rate up to a Volkeresque 18%. %. The stock market crashes, taking the S&P well below the 666 low we saw in March. Housing, having never recovered, drops by half again, wiping out more bank equity, and forcing the Treasury to launch TARP II. 

The bad news accelerates into the 2012 election year. Obama is burned in effigy; Sarah Palin is elected president on a “Tea Party” platform, and immediately sets to undoing all of his work. Republicans, reinvigorated by new leadership, and energized by a failing economy, retake both houses of congress. National health care is shut down as a wasteful socialist mistake, boondoggle subsidies for alternative energy are eliminated, and the savings are used to justify huge tax cuts for high income earners. We invade Iran, and crude hits $500.

 If you’re over 50, and all of this sounds vaguely familiar, it’s because we’ve been through it all before. Remember Jimmy Carter? Remember the “misery index,” the unemployment rate plus the inflation rate, which hit 30, and catapulted Ronald Reagan into an eight year presidency? A replay is not exactly a low probability scenario. This is why virtually every category of risk asset has melted down in the last two weeks. It’s also why the investing public is gun shy, favoring bonds over stocks by a ten to one margin. Are the equity markets pricing in these possibilities? Not a chance. 

The risk of economic Armageddon is still out there. Personally, I give it a 50:50 chance. Batten the hatches, and please pass the Xanax.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on the “Today’s Radio Show” menu tab on the left on my home page.


----------



## explod (25 May 2010)

Looks like we should increase our fences higher and putting in even more spuds. And do not forget the baked beans before they run out.  Now this is creating a new uptrend maybe.

Reading Jason Hommell this morning, Gods angry too and interest rates are supposed to be *zero* according to the Bible.   He says 6%'s a sin and this codger Zerohedge is saying 18%

Someone wake me up please


----------



## irish joe (9 July 2010)

Suggest all the bears read a bit of commonsense from independent economist, Adam Carr. He wries a regular column in business spectator.

The world is not ending. Some economies around the world have some issues but at the end of the day, even in those economies there are good companies making good profits. The old maxim, markets are not economies and economies are not markets

Japan has been a basket case for how long??? how many of you out there drive a nissan or toyota. Up to 50% of their sales are outside japan and in Nissans case an enormouse profit coming from JV in china.

Who has japanese technology in their home somewhere? GO On all of you do.

Equally, look at pharmaceuticals companies or better still have a look in your medicine cabinet. How many of these companies are domiciled in so called basket case economies.

At home our economy is starting to fire and company earnings will again suprise on the upside. 

If anyone is considering selling anything in the top 100 I'll gladly buy them.Have any of you teddies thought about the fact that when you sell something someone is actually buying it on the other side. Do you ever wonder why?At these prices the yield alone is comparable to what i can get in cash and I am happy to take a 3-5yr view on growth so don't see much downside.

No doubt some volatility still ahead but "be greedy when others are fearful" and start building a quality portfolio. AND Don't go down to the woods today...


----------



## kincella (10 July 2010)

seems obvious with the figures quoted here.....over a trillion dollars hoarded in cash....larger than the market capitalisation of the entire stockmarket....

Australia's four major banks hold total deposits from businesses, households, governments and other banks of $938.4 billion, up 11.9 per cent from a year ago.

This is money that could be pumped into the market but is being held back.

The Commonwealth Bank of Australia has the largest amount of deposits on its books with at least $276.03bn -- more than the sum of all deposits in Australian banks before the financial crisis.

Total deposits in all Australian banks now top $1.26 trillion.

To put that in context, it is a figure larger than the market capitalisation of the entire stockmarket.
http://www.theaustralian.com.au/bus...around-the-world/story-e6frg8zx-1225889998927


----------



## Garpal Gumnut (10 July 2010)

The large amount of portfolios and managers in Cash has been noted by the press at last.

This could in part account for tech/a's low volumes in the xao thread. Rather than a lack of supply leading to higher prices, it may be a lack of demand which will drive prices down in to the double dip, and then a recovery.

gg


----------



## SmellyTerror (10 July 2010)

Sir Osisofliver said:


> OK I'll bite, why SELL everything rather than
> 
> a) short or
> 
> ...




Came to say this. Leaving redundant.

But not brief. Never brief...

I can understand that most people can't/won't trade some conditions, and that's fine, but if you're predicting a massive crash, if you're making a call that big - not some vague "oh it'll keep going down for a while yet" sorta call, but a monster "WE'RE DOOMED" announcement - then surely you must have enough confidence to trade short. Surely!

Unless it's your **** talking, and you know it.

Re: True Values - maybe people are over-reacting with companies vs economies, Greece vs Australia. But I can't go down the exchange, politely explain that, actually, you guys are all over-reacting, and can I sell my shares for 50% extra, please? I can't see that working.

*Being right doesn't make you any money if everyone else keeps being wrong.*

...and I don't think the situation *is* being under-estimated in general at the moment. I don't go as far as the "buy tinned food" folk, but I think a solid slump is unwinding, this last week aside (I'll consider bulling it at 4000 or 4500, whichever comes first . *People are ready to respond to bad news*, and there is plenty of it coming along to oblige. There's no much crap that's been fairly blatantly swept under the carpet now... Elephant in the room? Yeah, there he is, standing in the corner with a rug on his head.

Hell, here's some simple fundamental analysis: management is important, right? Well global recovery has been bankrolled / driven by governments. That means that we're actually at the mercy of politicians right now.

...has anyone ever gone broke betting that pollies will do stupid ****?


----------



## basilio (10 July 2010)

It's all a bit interesting... we do know that the financial system runs on confidence. While we believe our money is safe in the bank it generally stays that way. If lots of us decide the bank isn't a safe place (or the stock market, or the housing market ) and lot's of us try to get out *there will be  a crash*. Banks can't stay  solvent with mass exits, neither can stock markets.

Trouble is the economic system as a whole uses this reality to hide it's own  creative accounting. For example banks simply create more credit with multiple key strokes. Companies create more shares with similar activities.  These are supposed to be new wealth that has magically appeared.  If we decide to take the first view that we must have confidence in the system if the system is to work then we swallow our doubts and believe  these new assets are real, solid, valuable.

But they might not be and that is the problem that is facing us. We havn't had the courage to question our economic masters on the reality of all their fake story telling. While we were making a dollar on the deal the smart idea seemed to be to shut up and take the dollars.  Even when every fibre of our being told us this was a giant con.

Let's look at some obvious examples. The huge property spiral and subsequent bust in America was largely based on poor quality or even totally corrupt housing loans. On the way through the banks made profits on the transactions and then flipped the loans to someone else to take the fall. (Pension funds, local councils etc)

On the stock market itself we see multiple companies like Firepower, Storm, Bancock and Brown, ABC learning, property developers and many others who managed to make big bucks through deception.

The problem now seems to be that there are just too many crooked deals in the whole economic/financial system to enable the process to stay solvent. There are more crooked deals than good one. It will be this reality that will firstly severely weaken the profitability of our economy *and then destroy confidence in the financial institutions that unfortunately are critical in running the actual nuts and bolts of our industrial society*

The theory should have been that the government protects the essential infrastructure of it's society ie the nuts and bolts banking system to ensure that our collective stability is maintained. But to do this it had to make sure  this core banking system did not have excessive exposure to the giant crap game that our financial world has become. It's now just a matter of time.


----------



## noirua (10 July 2010)

Excellent publicity that should drag in a few thousand more subscribers - job done.


----------

