# Why is our market so down?



## CATAPILLAR (19 December 2007)

Just wondering why All Ords is down for so long when US market have had some upward/downward  movement. This is the sixth day the market been negative. If the subprime doesn't effect Australia as much as US why are we so low in confidence?
CATAPILLAR


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## prawn_86 (19 December 2007)

Perhaps we are decoupling downwards instead of up? :


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## Bushman (19 December 2007)

I would change 'why is our market down' with 'any reasons for our market to be up'? I am racking my brain for an answer. Maybe if those Yank Investment Banks say they have contained their losses then we might have a chance as the credit markets start to thaw.


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## numbercruncher (19 December 2007)

All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on


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## Wysiwyg (19 December 2007)

numbercruncher said:


> All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on




Gold nerds reckon there is 285  gold and silver companies listed here.

Is that a record.How many more are gonna jump on the bandwagon?


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## tronic72 (20 December 2007)

numbercruncher said:


> All we have to offer the world is stuff from holes in the ground, if demand slows, we get spanked, If demand increases we rock on




I couldn't agree more. 

Sure the Commodities stocks have done well and some people have made a packet but it's getting a lot harder. As for spec stocks, they are EVERYWHERE. People have been throwing money at companies with a view that they MIGHT find something. (myself included) but I'm certainly less keen to do it these days.

I think companies that provide services will start to come back in favour. We no longer have much in the way of farm produce to offer the world (shame considering the current wheat price) wool can't be given away and the commodities boom is just that)


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## ta2693 (20 December 2007)

"God make it happen and give you a chance to make you rich once in a lifetime. Sell you house and put you money into the market." Just kidding


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## shaunnell (20 December 2007)

CATAPILLAR said:


> Just wondering why All Ords is down for so long when US market have had some upward/downward  movement.




I've often heard the saying "When America sneezes, we catch a cold".
Maybe this time the cold is a nasty one that may even be the flu.
It is frustrating, especially for someone like myself that does not understand macro economics, how credit problems in the US can affect my _insert Australian company of choice here_


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## Nyden (20 December 2007)

Sigh, base metals up...and commodity stocks? What do you know, down! A long with every blooming other stock. What's todays reason? How can we fall for 7 days straight...it's rubbish. The US hasn't even fallen that hard this week. They go up 60pts, we go down. They go down 25, we go down 36.

We can't just ignore their gains, yet overstep their drops. It's just ridiculous.

Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets


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## Yezzy (20 December 2007)

Nyden said:


> Sigh, base metals up...and commodity stocks? What do ...
> Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets




They don't tax losses :


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## Nyden (20 December 2007)

Yezzy said:


> They don't tax losses :




There wouldn't be losses, if they did that


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## M34N (20 December 2007)

Nyden said:


> Sigh, base metals up...and commodity stocks? What do you know, down! A long with every blooming other stock. What's todays reason? How can we fall for 7 days straight...it's rubbish. The US hasn't even fallen that hard this week. They go up 60pts, we go down. They go down 25, we go down 36.
> 
> We can't just ignore their gains, yet overstep their drops. It's just ridiculous.
> 
> Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets



To me, this sounds like a buying opportunity, a lot of people who are bailing are the same nervous folk who bailed during the August "crisis". But only time will tell whether I'm right, or wrong. But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.

I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again. This is the main reason why I still believe in the market now, otherwise I wouldn't put a cent in and put it into some term deposit account.

FYI, the 7 day losing streak is actually the longest in 5 years, according to CNBC.


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## vishalt (20 December 2007)

Relax peeps, our market is still way up, I hope it finds a bottom soon and consolidates for weeks there so we can start trumping upwards linearly again. 

I've also noticed that there's always a lag between when metal prices jumps and the effect on stocks. I remember when metals where going crazy at 5% high each day yet BHP would struggle and sit around at $24 (before shooting to $47.50). 

Just figure out whats a good buy!


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## wayneL (20 December 2007)

Nyden said:


> How can we fall for 7 days straight...it's rubbish.



You haven't been trading very long have you?


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## Nyden (20 December 2007)

wayneL said:


> You haven't been trading very long have you?




Define _very_ long? Very long as in 4-5 years, or 30? :

I'm still under the belief that everything is generally fine, and that everyone is overreacting. A few companies made a few stupid greedy mistakes, & business will continue as usual... minus a few home owners.

As mentioned by someone else here - this hasn't happened since 2002, so I believe labelling it as rubbish is justifiable, as it's obviously not a common occurrence (and I'm sure it was rubbish back then as well).

 I tend to believe that the whole concept of recessions, & slow downs are inefficient to the market; what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other. I'm sure many try to keep the market that way, though 

I guess if there's one thing in this world to rely on - it's that people are idiotic morons, fooled into debt, fooled into losses, & they never learn. How can we make money off of this?


Not to mention Wayne, as is my understanding; you're some kind of uber bear : So I shall take what you say with a grain of salt


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## M34N (20 December 2007)

wayneL said:


> You haven't been trading very long have you?



To be honest, I've only been doing it for about 2-3 years (actively trading, but have watched for much longer), and don't remember a fall this long either.

All I can say; "Buy when there's blood in the streets".

Best quote I've ever heard.


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## wayneL (20 December 2007)

Nyden said:


> Define _very_ long? Very long as in 4-5 years, or 30? :
> 
> I'm still under the belief that everything is generally fine, and that everyone is overreacting. A few companies made a few stupid greedy mistakes, & business will continue as usual... minus a few home owners.
> 
> ...



Why is it fine to go up 7 days in a row but rubbish to go down 7 days in a row?

The markets are nothing more than an auctioning mechanism for a group of assets and do what they will do, supply and demand. They will go down 20 days in a row if they want to.

As far as "what's the point of going down, if it's only going to go back up - should just instead slowly climb as opposed to swinging one way, & then the other" goes... ROTFL! Would you be happy to pay $10 for Centro? It'll go back up one day! How about RAMS, HIH etc etc etc?

What you are talking about is the complete disregard of risk... and that is why we find ourselves where we are.


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## Real1ty (20 December 2007)

M34N said:


> To me, this sounds like a buying opportunity, a lot of people who are bailing are the same nervous folk who bailed during the August "crisis". But only time will tell whether I'm right, or wrong. But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.
> 
> I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again. This is the main reason why I still believe in the market now, otherwise I wouldn't put a cent in and put it into some term deposit account.
> 
> FYI, the 7 day losing streak is actually the longest in 5 years, according to CNBC.







> a lot of people who are bailing are the same nervous folk who bailed during the August "crisis".




Yes but the August crises is what alerted everyone to the issue.
Then from there people expected it to be a short term thing.

"she'll be right mate", that is the attitude people get when the markets have been so good, throw a line and reel in a profit.

Then the effects started to show up in different areas, combined with high inflation, houses with the value of tin sheds and slowing growth.

Then people realised, "****, this thing is bigger than we thought"
"I wonder if this might actually effect us here?"

Bam, enter Centro, Bam enter realisation that it MIGHT actually be more far reaching than we thought and that have we seen the worst of it yet?




> But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.




I don't think we have when you consider where we have come from.

People have become accustomed to us bouncing back and are not used to the volatility or the extended losses.




> I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again.




They might do that yes, but one of the problems they face is inflation is at high levels already.

As for restoring confidence, imo, that would not be a good thing in the long run.
While it is harsh and while most of us are hurting a bit from the backtracking we are doing, most of us probably need a good slap around the head to knock some sense into us and get us to re evaluate our risk management.

All the above is a very simplistic view, as i am certainly no economic evaluator

Just my 2c
Actually, i shouldn't risk 2, just my 1c


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## Nyden (20 December 2007)

wayneL said:


> Why is it fine to go up 7 days in a row but rubbish to go down 7 days in a row?
> 
> The markets are nothing more than an auctioning mechanism for a group of assets and do what they will do, supply and demand. They will go down 20 days in a row if they want to.
> 
> ...





The disregard for risk is tied to the fact that a lot of stocks may be over-valued as a result of people never foreseeing any kind of slow down, I guess that's the difference between the markets, & a savings account though.

I believe you misunderstand me; my real objections are tied to the fact that we'll drop massively one day, rally hard the next - what efficieny is there in that? It's irrational behaviour. Our market is irrational at the moment, and I very much dislike it : 

I do understand that many markets are cyclical, and that recessions need to occur - I guess my real frustration is tied to short-term instanbility. News is perceived differently every hour, everything is twisted & manipulated...I just don't like it, is all.


That isn't good either Wayne - to go up for 7 days, that's what I dislike. Up heavy for 7 days, down heavy for 7 days. At the end of it - "What was the point of that?" I guess this is from an investors perspective though, as opposed to a trader. I'd prefer a slow, & steady market as opposed to a red-hot one day, iced cold the next.


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## wayneL (20 December 2007)

Nyden said:


> The disregard for risk is tied to the fact that a lot of stocks may be over-valued as a result of people never foreseeing any kind of slow down, I guess that's the difference between the markets, & a savings account though.
> 
> I believe you misunderstand me; my real objections are tied to the fact that we'll drop massively one day, rally hard the next - what efficieny is there in that? It's irrational behaviour. Our market is irrational at the moment, and I very much dislike it :
> 
> I do understand that many markets are cyclical, and that recessions need to occur - I guess my real frustration is tied to short-term instanbility. News is perceived differently every hour, everything is twisted & manipulated...I just don't like it, is all.




Sure it's irrational! How many rational humans do you know, particularly when greed and fear become involved?

You have two choices really. 1/Trade the irrationality (day and short term trading) or 2/ Take a few steps back, ignore the volatilty, and take long term trends, or buy and hold...


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## Nyden (20 December 2007)

wayneL said:


> Sure it's irrational! How many rational humans do you know, particularly when greed and fear become involved?
> 
> You have two choices really. 1/Trade the irrationality (day and short term trading) or 2/ Take a few steps back, ignore the volatilty, and take long term trends, or buy and hold...




Absolutely agree, & I know that's what I need to do. It's just *very* hard not peeking at the markets, & becoming a little irrational myself watching it drop every day 

I am holding for the long term, still - it's always enjoyable seeing short term gains!


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## sassa (20 December 2007)

And the market can stay irrational longer than some investors can stay solvent.


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## The Mint Man (20 December 2007)

Nyden said:


> Sigh, base metals up...and commodity stocks? What do you know, down! A long with every blooming other stock. What's todays reason? How can we fall for 7 days straight...it's rubbish. The US hasn't even fallen that hard this week. They go up 60pts, we go down. They go down 25, we go down 36.
> 
> We can't just ignore their gains, yet overstep their drops. It's just ridiculous.
> 
> Gov should abolish CGT at the 12 month holding period for shares, that would get interest back into the markets



exactly my thoughts for the last couple of weeks... very frustrating, thats for sure

Cheers


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## Bushman (20 December 2007)

Investors (people) are worried at the moment. They are worried, as they have worried before, because participants in capital markets are not very good at disclosing bad news. So the overwhleming perception out there is that there is more bad news to come. When you are worried, self preservation is your over riding concern. When investors are confident again, then they will buy more stocks than are sold and the market will go up again. 

A note on Centro. If Centro had been able to 'digest' New Plan as per the business model, $10 would have been a solid price over the longer term horizon. Acquisitions had been working for Centro and Centro investors by providing returns that exceeded that of other participants in the LPT market. However the business model became flawed in that it was not flexible enough to consider the worst case scenario of a prolonged credit crunch and banks sudden aversion to perceived default risk. So $10 in May was not a good price after all because the game changed but the company's debt profile did not change with it. The thing to note is that debt markets will not remain frozen over for eternity. Hence paying $10 for an LPT with US exposure in the future could once again be a good investment option. The key thing to note is that debt, while providing substantial returns when things are good, exposes the investor to liquidity risk when things are bad. Very simple lesson that will be at the forefront of Boards, ASIC and the ASX's thinking in the future. Or at least lets hope it is. That was what Sarbannes Oxley legislation was meant to instill after the Enron debacle.


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## M34N (20 December 2007)

Real1ty: Fair enough, mate. The markets don't always follow the economy, though. I realize inflation is going to rear its head, but would you think the central banks will sit back and watch the markets (including housing) collapse, or fix the problem now by creating the inflation dragon for later? I think they would rather at least now try to create some growth for 2008/09 by lowering rates now, and then eventually raise rates later when inflation starts to get _further_ out of control later on. Maybe its their view that at least we should have some moderate growth if there's going to be inflation anyway, rather than just have inflation and little growth, or possibly even a recession, then stagflation?

What's peculiar is that growth is slowing, but spending by consumers remains relatively strong, and employment remains pretty good. It's mostly just the big banks who took stupid risks and caused this "sub prime" mess in the first place, and companies in the resource, energy and even tech sectors seem to still be doing OK. I think only when you start seeing _all_ sectors of the economy dropping like the financials have, then it's time to get out.

Like you, my  (actually 1 cent


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## dhukka (20 December 2007)

sassa said:


> And the market can stay irrational longer than some investors can stay solvent.




Sassa, that's a great quote and entirely appropriate for this thread however you may want to quote the source as it could appear as though you are trying to pass it off as your own pearl of wisdom. 

You know when the markets are going down because threads like these pop up. 
We could put them all together and rename it "I'm confused because reality isn't doing what I expected it to do."   Why do people expect the market to act rationally or for the declines in our markets to mirror those of other major indices? 

You'll only succeed in doing your head in looking for rationality in an inherently irrational mechanism such as the market.


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## tronic72 (20 December 2007)

Here's another one for the bears

Irish growth to hit 15-year low in 2008



> DUBLIN (AFP) - Ireland's leading economic think tank on Thursday downgraded its forecast for the country's gross domestic product (GDP) growth next year to 2.3 percent.
> 
> In its previous quarterly commentary, the Economic and Social Research Institute (ESRI) had forecast that GDP would drop to 2.7 percent in 2008.
> 
> ...




Yeah I know it's only little old Ireland, but lets add the US's woes which may have got much worse today with the new bill to build cleaner cars (only 20 years late). Germany is complaining because it says their auto industry will suffer. 

No much good news around at the moment.


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## kaleon (21 December 2007)

Just on a TA slant on the August correction and what is happening now. If you look at the MACD back around the august lows there was a bullish divergence between the MACD and price action. Not so this time. I would err on the caution. I feel there is a lot more downside to come....


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## Aussiejeff (21 December 2007)

kaleon said:


> Just on a TA slant on the August correction and what is happening now. If you look at the MACD back around the august lows there was a bullish divergence between the MACD and price action. Not so this time. I would err on the caution. I feel there is a lot more downside to come....




You mean ... Santa might have a nasty surprise lurking in his sack of "goodies"? I have a hunch you might be right. 

All this volatility and negativity goes to show that our tiny market is at the whim of demand from international players. As others have stated, we have put almost ALL our eggs into the one big basket (ie: dig and sell or perish). If other economies can find more sources of coal, oil, gas, iron ore, gold or uranium at better mined and transported prices (like out of Africa for instance), we are going to be screwed bigtime - plain and simple. We shouldn't think that for one minute, other nations are happy with our exported prices. If they can source it cheaper from elsewhere, preferably nearer their own back yards, by heck they will! The costs of "the tyranny of distance" still applies to us, floating as we are on an isolated island in the middle of a vast expanse of ocean...

Speaking of things NUKLEAR, the current massive push by OZ uranium miners doesn't give me any confidence either, looking forward. The risk in sinking squillions into that industry seems painfully obvious to me, especially with the change of government and the huge negative sentiment toward nuclear reactors in Australia - but many others seem far more optimistic about the ATOMIC SOLUTION outlook. 

The other big earner for OZ is tourism. Not an industry you want to rely on for income if world economies slow down, that's for sure! So, is there any hope? Sure! If the new government can see the predicament we are getting ourselves deeper into, maybe, just maybe, there will be a big push to create wealth out of the emerging renewable and clean energy sectors. If China finds significant alternative sources of coal or iron ore, we at least might be able to stay engaged in processes that help them achieve better pollution or productivity outcomes... that is where I think the future of our economy lies. 

It would appear that our markets are capable of racing ahead in the *good* times when world demand is sky high for our resources. But we need a solid alternative when the international demand for stuff from the ground sags when time get tough - like now.


AJ


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## tronic72 (21 December 2007)

Aussiejeff said:


> You mean ... Santa might have a nasty surprise lurking in his sack of "goodies"? I have a hunch you might be right.
> 
> All this volatility and negativity goes to show that our tiny market is at the whim of demand from international players. As others have stated, we have put almost ALL our eggs into the one big basket (ie: dig and sell or perish). If other economies can find more sources of coal, oil, gas, iron ore, gold or uranium at better mined and transported prices (like out of Africa for instance), we are going to be screwed bigtime - plain and simple. We shouldn't think that for one minute, other nations are happy with our exported prices. If they can source it cheaper from elsewhere, preferably nearer their own back yards, by heck they will! The costs of "the tyranny of distance" still applies to us, floating as we are on an isolated island in the middle of a vast expanse of ocean...
> 
> ...




In regards to your comments "The risk in sinking squillions into that industry seems painfully obvious to me, especially with the change of government and the huge negative sentiment toward nuclear reactors in Australia"

If Rudd wants to get our coal dependent emissions down then I think nuclear power is the only current option for "on demand" power. There currently aren't any other types of power that can simply be "turned up" when demand requires it. 

my 2c

BTW. I'm not endorsing it or saying we shouldn't go for renewable energy.


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## huyha123 (22 December 2007)

Real1ty said:


> Yes but the August crises is what alerted everyone to the issue.
> Then from there people expected it to be a short term thing.
> 
> "she'll be right mate", that is the attitude people get when the markets have been so good, throw a line and reel in a profit.
> ...




very very newbie here. just want to say thank you and good write for a good read!


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## explod (23 December 2007)

tronic72 said:


> In regards to your comments "The risk in sinking squillions into that industry seems painfully obvious to me, especially with the change of government and the huge negative sentiment toward nuclear reactors in Australia"
> 
> If Rudd wants to get our coal dependent emissions down then I think nuclear power is the only current option for "on demand" power. There currently aren't any other types of power that can simply be "turned up" when demand requires it.
> 
> ...




My sintiments exactly.  I have spoken to my local State member of Parliament on the issue a number of times and find they are just not ready to listen to any part of the arguments yet.  

The latest reactors (particularly the French) are very efficient and safe.  The problem of destroying the ongoing dangerous waste will also be solved through methods of re-processing or jettisoning into the sun.

It is expensive though, but as a meantime measure needed.   This talk about reductions by 2050 is rediculous.   The level of pollution now is way beyond the pale.   Some say that if all pollution stopped today out planet is still going to suffer chaos for centuries before it can normalise.


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## Bruza (24 December 2007)

It is probably getting of subject here, but feel I must comment on your thoughts on Nuclear.



> If Rudd wants to get our coal dependent emissions down then I think nuclear power is the only current option for "on demand" power. There currently aren't any other types of power that can simply be "turned up" when demand requires it



(I realize tronic you said you didn't endorse etc.)


For one thing Kevin Rudd's platform was against nuclear, so I feel that won't be the way Labour want to get coal emissions down.

One thing that is underway in Os, is "clean coal technology", and I have no doubt the Gov will be offering (big) grants for this, as we have so much of it.
However one must think this will bring the cost up near to, or close to, other more expensive power sources, and with what carbon footprint?

"On demand" power could probably be called "base load" power and we certainly need that to give the "Backbone" to other emerging power sources, such as Solar, Wind, Wave (bio fuel deliberately excluded).
 Natural Gas has the offering of Base Load power, and it has a far better carbon footprint than coal. Many companies are exploring and producing more of this great resource, it seems.

The other fantastic Base Load power source, that we have in abundance is Geothermal! There are some 16 companies applied for or has leases to drill for this wonderful carbon/pollution free power source. I certainly hope the Gov will give equal opportunity (grants) to help develop this, as Australia could be a world leader.




> The latest reactors (particularly the French) are very efficient and safe. The problem of destroying the ongoing dangerous waste will also be solved through methods of re-processing or jettisoning into the sun.



explod,
 I enjoy reading your posts (I think I've read them all), but mate!
Could you imagine the devastation if the rocket launching this $#!t to the sun had a mishap? 

Any way of trying to get rid of Nuke waste has got to be hazardous, I won't go on about the other hazards of Nuke Plants as everyone knows them.

No offence intended, I just feel there have GOT to be cleaner, greener ways of producing power, in a world facing global warming. 
Bruza.


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## Real1ty (24 December 2007)

A couple points.

At this stage the Federal government have no power over the states when it comes to handing out mining licenses for Uranium.
Of course IF they were really opposed to it, i'm sure they could find away around it.

I think that we are going to be left with no choice other than Uranium one day and if Labour were in then, i'm sure they wouldn't find a way around it and would let the State governments hand out the licenses while still maintaining their position

All these alternative fuel sources are great and we certainly need to look at them but they will never be anywhere near ready or provide enough fuel for what we will need, imo.

I'm of the belief that we are in far worse shape, global warming wise than anyone knows and that countries will eventually be forced (By some form of worlwide governing body) to turn to an alternative and none will be acceptable or ready other than U.


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## Wysiwyg (24 December 2007)

Real1ty said:


> A couple points
> I think that we are going to be left with no choice other than Uranium one day and if Labour were in then, i'm sure they wouldn't find a way around it and would let the State governments hand out the licenses while still maintaining their position
> 
> All these alternative fuel sources are great and we certainly need to look at them but they will never be anywhere near ready or provide enough fuel for what we will need, imo.




Queensland has the bulk of coal reserves in Australia.The present day prime minister was born in Queensland.Port expansion is ongoing to accomodate the growing coal mine production.
I don`t see nuclear power plants in Australia for another 30 years.


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## ithatheekret (25 December 2007)

I was thinking that the main cause of the markets retreat was , firstly linked to the financials and a couple of other sector retreaters , some even dropped their colours . Then we had the end of year book squaring , couple of events had portfolios reshuffling , the FMG split ( FMGDA ) 10:1 and the Centro chaos factor that spread across property trusts as is the norm , even good trusts copped it . The fall back in RIO and ZFX which has slowly coming back , and last but not least ........ banks .

............  and SGB IMHO has a major bonus if it can swoop on all those malls for $1.6B , that would be the property deal of the decade , but commentators etc., see it and push the fact in a negative bias .

That's why it always pays to have a small percentage in cash I suppose , some smart traders would have been out sitting back waiting to pounce , many of them here on ASF .

Good on 'em , dilegence and research backed up effort which can be time consuming , would have paid off nicely for them .

My hats off too 'em .

PS... not a dig , but we did see 6200 tested .


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## kaleon (11 January 2008)

kaleon said:


> Just on a TA slant on the August correction and what is happening now. If you look at the MACD back around the august lows there was a bullish divergence between the MACD and price action. Not so this time. I would err on the caution. I feel there is a lot more downside to come....




Following on from the above statement,there now appears to be a bullish divergence between the MACD and price action. So I would expect some short term rally in the next few days possibly up to the 6200 level. From there I expect a test of the 5600 level. The market is in a clear downtrend now.....


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## Aussie2Aussie (11 January 2008)

There a number of reasons for the market being in a poor condition. The most significant are:

1. The obvious - subprime (this will be know as the Year of the Subprime). It will take between 12 - 18 months for it to wash its way through the system. There is up to $500 trillion that will not be available to businesses wanting to expand, buy Centro and help people wanting to buy a house. 

2. Increasing oil and commodity prices at its impact on world growth. See point 3.

3. Chinas growth will soon begin to affect the world growth. China is fighting rampant inflation because of greed, wage blowouts and commodity prices, this will soon be exported to its trading partners. That packet of noodles will soon cost 60c, not 50c and that hammer $7.00 instead of $6.20. The world is now more reliant on Chinas GDP than the USAs.

There are others but I see these as the most pressing and of greatest concern.


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## Julia (11 January 2008)

M34N said:


> To me, this sounds like a buying opportunity, a lot of people who are bailing are the same nervous folk who bailed during the August "crisis". But only time will tell whether I'm right, or wrong. But who knows, we've fallen very hard very fast lately so I'm cautiously investing in this market.



In August there was little indication of the extent of the ramifications of the sub prime mess.  We are now daily becoming aware of just how far it has spread, e.g. in August we had no idea that all of our big banks were actually involved themselves.



> I personally believe if things get much worse, the central banks across the world will be forced to lower rates again, probably more fiercely, and hopefully that will help restore confidence again. This is the main reason why I still believe in the market now, otherwise I wouldn't put a cent in and put it into some term deposit account.



I suspect  the fear factor has now become so great that it is outweighing any benefit which could occur as a result of yet more interest rate cuts:
Mr Bernanke yesterday made pretty clear that he would move to cut as much as .5%  at the  29/30 January meeting. but our market has been unimpressed.

I've always been a long term investor, but I've now sold off more than half my portfolio.  Will be happy to re-enter when it's all sorted but believe that will be some time from now.

Incidentally, re term deposit rates:  I did some phoning around to check rates.
Then went into my ANZ Branch and was offered .5% more than quoted on the phone for the same amount/same term.


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## Lucky_Country (11 January 2008)

Volatility creating nervousness causing people too sell shares they really should hold onto.
People not entering the market because of volatility and uncertainty over shares that may or may not be affected by the sub prime fiasco.
Fear and greed rule the market up and down


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## So_Cynical (11 January 2008)

Lucky_Country said:


> Volatility creating nervousness causing people too sell shares they really should hold onto.
> People not entering the market because of volatility and uncertainty over shares that may or may not be affected by the sub prime fiasco.
> Fear and greed rule the market up and down



Yep thats about it...well that and the margin call factor.

so many great stocks at great prices....easy money to make
cept im fully committed.


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## tronic72 (11 January 2008)

I've had half my capital out of the Market recently and been buying in at prices that seemed "cheap as chips" only a few weeks ago. Todays trading saw my invested capital "slashed". Glad only half of it was in the Market!

I've been doing this for nearly 2 year and don't remember seeing a run of negative days like the last week. Even when the US or commodities are up we are still declining.

Has anyone HONESTLY predicted this much decline without ANY upside? I thought I was being cautious enough as I've been selling and buying back in but the upside just isn't happening.


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## numbercruncher (11 January 2008)

I cant understand how you guys can be so optimistic when major problems in International markets are unfolding before our very eyes 

Some people dont even sound to be erring on the side of caution 


This is the worst start to a trading year since 1971 according to bubblevision tonight.


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## numbercruncher (12 January 2008)

Julia said:


> I've always been a long term investor, but I've now sold off more than half my portfolio.  Will be happy to re-enter when it's all sorted but believe that will be some time from now.
> 
> Incidentally, re term deposit rates:  I did some phoning around to check rates.
> Then went into my ANZ Branch and was offered .5% more than quoted on the phone for the same amount/same term.





Pendulum says good move !


I read recently ANZ ceo was trying to bolster domestic deposits, not surprised they are offering a good rate !


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## Julia (12 January 2008)

numbercruncher said:


> I cant understand how you guys can be so optimistic when major problems in International markets are unfolding before our very eyes
> 
> Some people dont even sound to be erring on the side of caution
> 
> ...



Yes.  There seems to be a level of denial as to what's actually happening.


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## MS+Tradesim (12 January 2008)

Amen numbercruncher. I'm sounding like a broken record but in US recession their market falls by average 28% and we follow with average fall of 33%.  It pays to be ultra-cautious right now.


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## tronic72 (12 January 2008)

I don't see who's being optimistic????? Are you guys referring to this site in general or the market or the posters on this thread?

Sure there's some Longer term investors who are holding on but most traders seem to have started reducing weeks ago. (see my" jump ship" post), where myself and many other cautious ASF members was referred to as a Lemmings for selling.


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## Real1ty (12 January 2008)

tronic72 said:


> *I don't see who's being optimistic????? Are you guys referring to this site in general or the market or the posters on this thread?*
> 
> Sure there's some Longer term investors who are holding on but most traders seem to have started reducing weeks ago. (see my" jump ship" post), where myself and many other cautious ASF members was referred to as a Lemmings for selling.




I would say you could find the answer to that question on this very page

I was one of those "lemmings" and it has saved me a lot of money and my Super is sitting in a nice safe place sleeping quietly.


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## numbercruncher (12 January 2008)

Hi Tronic,


I see loads of people being overly optimistic in this thread and on this site .....

example top of this page comment    " easy money to make " - now thats wildly optimistic in my humble opinion, I have no idea what he's invested in but its still a massive call!

Another thread a guy says hes done alot of Dosh and unhappy about it, but was fully invested and fully margined, again wildly optimistic , arguably could be called Gambling ...

Loads of examples throughout site. 

Anyway just saying what I noticed 

Lets hope it doesnt get as bad as it potentially could !


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## numbercruncher (12 January 2008)

MS+Tradesim said:


> Amen numbercruncher. I'm sounding like a broken record but in US recession their market falls by average 28% and we follow with average fall of 33%.  It pays to be ultra-cautious right now.





This is an important historical fact that MS has pointed out ....

And with more bullish economists saying 50/50 on US recession and Markets down 10pc (ish) , the downside potential seems to outweigh the upside potential from a simplistic standpoint.


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## son of baglimit (12 January 2008)

from my readings it appears many of the optimists have based their thoughts purely on how the resources sector will handle the current situation, and whether china can reduce the damage from a US recession.

problem is the resources sector, whilst important, isnt the only sector is the ASX. without doing the research, youd just about guarantee most of the remaining sectors have slid alarmingly, and for some time now, not 1 month, or 3, or 6, but for 12 months and over. it was the endless takeovers, and speculation, that created so much of the boom in 06/07, not just increased profits.

and its this point that made me move out of everything except 1 during the 
1st half of 07.

have no optimists realised that the news of cash takeovers (cash sourced from various locations) has disappeared since august, and its only strong cash flow companies that will survive the upcoming mess ? and successful scrip takeovers will only come from those whos scrip is strong and backed by those same strong cashflows (ie BHP)

cash is king folks.

and a favour please.

is anyone with the right stuff able to create some form of listing which shows for example the ASX100 (excluding resources), with the 12 month high, current price, and the % difference ??


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## Captain Haddock (12 January 2008)

So it's not a good time for a noob like me to enter the market?   

I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....


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## tronic72 (12 January 2008)

Captain Haddock said:


> So it's not a good time for a noob like me to enter the market?
> 
> I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....




Now is great time to get into the market as long as you don't use any leverage, what so ever. Don't go near CFDs, Margin Loans or options!!!

Will you be a trader or Investor?

There's some good value around at the moment if you are looking to invest. Trading is much more difficult at the moment because the market isn't making much sense at all.


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## MS+Tradesim (12 January 2008)

Captain Haddock,

This would be an ideal time for you to learn the nuts and bolts of trading such as risk management and money management, position sizing, stop losses, entries and exits, psychology etc 

Leave your trading money in a high interest online savings accounts and spend time paper trading and educating yourself. If you don't already have an account with a broker, then grab a free membership on the ASX site where you can set up pretend portfolios. You can track your "shares" and decide on entries and exits and use a spreadsheet to log your results. Sure, it's not as "exciting" but if excitement is what you're after take up an extreme sport. But play your finances carefully until you can read the market in a basic way. Now isn't the time to commit money if you are a total newbie to shares. The worst thing that could happen to you is if your first few investments are profitable. The result will be a disproportionate sense of ability with far larger losses down the track.


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## mfp (12 January 2008)

Captain Haddock said:


> So it's not a good time for a noob like me to enter the market?
> 
> I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....




CH, my advice to you is to stay out completely and just watch (and learn as the previous post suggests) from the sidelines. IMO we have just entered a bear market, a quick look at a chart of the XAO will clearly show that since Oct it's been making lower highs and lower lows, unlike the previous 4 years. I find that many people are still in denial calling this another correction and some are still expecting our market to hit new highs by the end of 2008! The last bear market we had lasted 3 years, from early 2000 to early 2003, so I have a feeling that if you are a long term investor, you will be able to snap up many stocks a fair bit cheaper in months, maybe years, to come. I can tell you from experience that the beginning of a bear market is the absolute worst time for a newbie to be entering the market. And one other thing, don't try looking for the bottom of the bear market. It is a long, gruelling and agonising wait, especially if you are holding stocks, or even worse and topping up on the way down. You will only know the bottom is in place months after it occurs. Just my opinion, I by no means am an expert.


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## Captain Haddock (12 January 2008)

tronic72 said:


> Now is great time to get into the market as long as you don't use any leverage, what so ever. Don't go near CFDs, Margin Loans or options!!!
> 
> Will you be a trader or Investor?
> 
> There's some good value around at the moment if you are looking to invest. Trading is much more difficult at the moment because the market isn't making much sense at all.




Well, intially I thought I'd be a trader.  I discovered CFDs and thought YEAH BABY!  But having done quite a bit of reading on the subject I don't think they're for me. Sure you can set up stop losses but the whole DMA issue and betting against your broker makes me a little nervous.  I have a 9-5 job and won't be able to watch the market like a hawk.  So, CFDs are out.

SO, now I think I'll be more of an investor, hoping to get some reasonable returns in 1-2 years.  I'm still in my 20s so I guess I can take slightly more risk.  I was looking at some mining/oil companies and contemplating putting some savings in.  I am thinking about AED and OEL...but not sure yet.  I'm flying solo, with no advice from a broker, so I will either suceed or fail on my own merits!  Any advice gratefully received, I like trawling through this forum and reading what you guys have to say.  Cheers


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## Captain Haddock (12 January 2008)

mfp said:


> CH, my advice to you is to stay out completely and just watch (and learn as the previous post suggests) from the sidelines. IMO we have just entered a bear market, a quick look at a chart of the XAO will clearly show that since Oct it's been making lower highs and lower lows, unlike the previous 4 years. I find that many people are still in denial calling this another correction and some are still expecting our market to hit new highs by the end of 2008! The last bear market we had lasted 3 years, from early 2000 to early 2003, so I have a feeling that if you are a long term investor, you will be able to snap up many stocks a fair bit cheaper in months, maybe years, to come. I can tell you from experience that the beginning of a bear market is the absolute worst time for a newbie to be entering the market. And one other thing, don't try looking for the bottom of the bear market. It is a long, gruelling and agonising wait, especially if you are holding stocks, or even worse and topping up on the way down. You will only know the bottom is in place months after it occurs. Just my opinion, I by no means am an expert.



good points, will certainly take that on board.  Thanks.


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## mfp (12 January 2008)

By the way, if you are a trader it's a lot harder making profitable trades in a bear market as the overall trend won't rescue you, unlike in a bull market, if you mistime your entry. Unless of course you're into "shorting".


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## austek (12 January 2008)

The market moved down over bad news initially, and that the rally since August was much too fast anyways.

So I guess the Financial Institutions that plunder our Aussie market will soon say enough is enough, and away we go again, but I suspect any upmove will be slower and more volatile than the August rally.

All we can do is sit there & profit from it.  We do not have the funds to move it ourselves.


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## skint (12 January 2008)

mfp said:


> By the way, if you are a trader it's a lot harder making profitable trades in a bear market as the overall trend won't rescue you, unlike in a bull market, if you mistime your entry. Unless of course you're into "shorting".




Valid point, but before you corrected the typo, "rescue" read as "re-sue". lol. Mistiming an entry point in a bear market is very much like being sued, again..and again. I took all my funds off the table a couple of months ago. I'm currently looking at stocks with good cashflow from gold and ideally with some FE interests (or other in vogue projects) to take advantage of any rebound. "Shorting" some stocks is an option, but this can also be a dicey game as no-one rings a bell to signify the bottom. Probably best for newcomers to avoid it. Timing..timing.


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## Captain Haddock (12 January 2008)

So what happens typically in a bear market?  Do people pull out and put their money under their matress, or ride it out, or still bravely invest in certain companies...?  What's the general feeling/strategy?  Sounds like I should keep my $ in the bank earning 8.5%...perhaps I should wait until the markets hit rock bottom (whenever that might be!  : )  

(Thanks for humouring a noob like me)


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## Nick Radge (12 January 2008)

I think there is a good chance we'll see the kind of market as we did in 1988 - 1993. Choppy and broad sideways trading for a number of years. 

Those of you who think things can't get bad, just take a look back at the early 70's for a dose of what can happen. Try buying that dip; 4-years from top to bottom and some 66% decline. 

I'll put a thought forward for 'discussion': Is it remotely possible, seeing as we're all so well versed in the impact of what China and India can demand, that indeed it - the Chindia phenomena -is already fully priced in?


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## rustyheela (12 January 2008)

In my opinion this is a decent correction and maybe a good time to look at buying sum of the banks. The fed speaks this friday, with a high possibility/ bias to interest rate cuts for the U.S. this MAY halt the slide, reduce the volatility, and maybe just find a bottom for our market.
 according to 90% of my charts in downtrends isnt this a bearmarket already?
especially resources. buy when there is blood in the streets and all the talk is -!!


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## Captain Haddock (12 January 2008)

rustyheela said:


> The fed speaks this friday, with a high possibility/ bias to interest rate cuts for the U.S. this MAY halt the slide, reduce the volatility, and maybe just find a bottom for our market.



A bottom....already?


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## dhukka (12 January 2008)

Nick Radge said:


> I'll put a thought forward for 'discussion': Is it remotely possible, seeing as we're all so well versed in the impact of what China and India can demand, that indeed it - the Chindia phenomena -is already fully priced in?





Nick,

If I remember correctly I think you put that thought forward in another thread months ago. I agreed with you then and even more so now. Difficult to know how much of the Chindia phenomenon is fully priced in given that it is a fast moving beast but the fact that so many parrot the same platitudes may indicate it is well known. 

Conversely it can be useful to look at what is not priced in. A sharp slowdown in Chindia expansion is certainly not priced in.  That to me seems to be where a good proportion of the downside risk lies for the Australian economy and stock market.


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## krisbarry (12 January 2008)

Nick Radge said:


> Those of you who think things can't get bad, just take a look back at the early 70's for a dose of what can happen. Try buying that dip; 4-years from top to bottom and some 66% decline.





Lots has happened since the early 70's though...including fully computerised trading systems and a so called "Plunge Protection Team".  After Monday's open, which is expected to be down, I reckon we will have hit the bottom.  from Tuesday onwards all eyes will be firmly focused on the US, and the upcoming Fed rate cut.  A massive rally in late Jan/ early Feb, then the reporting season kicks off.


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## Nick Radge (12 January 2008)

dhukka,
Thanks. I hadn't realized I had posted that here before. I actually started discussing this theory back in February last year but the run into the June highs gave me some pause. As is commonly said, big trends take some time to turn.

rustyheela,
Australia is trying to cool its heels by raising rates and regardless of what  the US is doing on its own accord, higher rates here will have a negative impact eventually. Usually when rates pass through 7.5% (which are now priced into 3-month futures) will we start to see fund managers think long and hard. If the growth of the market is forecast to be flat this year then 7.5% risk free becomes a good equation. This in turn produces the flat growth.

What we should be concerned about is how 'relaxed' the rate of decline currently is. It hasn't been a rapid shock like we saw in August. It has the same distinct flavour as the start of the 2002 bear market.

Stop the clock,
I am not insinuating that we're going to see a return of that 70's scenario, unless hyper-inflation kicks in. I'm simply suggesting that if people are hurting after what we've had so far then they have a lot of history to look forward to. Best they do the study now before it hurts their hip pocket.


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## Real1ty (12 January 2008)

Captain Haddock said:


> A bottom....already?




No where near it yet.

There has been a lot of good avice to you so far.

Keep your money in a safe Bank in a safe account and learn to play the market and watch your play money diminish, not your real money.


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## MS+Tradesim (12 January 2008)

Stop_the_clock said:


> Lots has happened since the early 70's though...including fully computerised trading systems and a so called "Plunge Protection Team".  After Monday's open, which is expected to be down, I reckon we will have hit the bottom.  from Tuesday onwards all eyes will be firmly focused on the US, and the upcoming Fed rate cut.  A massive rally in late Jan/ early Feb, then the reporting season kicks off.




Unbridled optimism = sheep to the slaughter. 

http://globaleconomicanalysis.blogspot.com/2007/12/things-that-cant-happen.html

EDIT: There will very probably be short-term rallies, but there's no reason to think the bull will be back any time soon.


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## Captain Haddock (12 January 2008)

Real1ty said:


> No where near it yet.
> 
> There has been a lot of good avice to you so far.
> 
> Keep your money in a safe Bank in a safe account and learn to play the market and watch your play money diminish, not your real money.




hmmm...ok, I'll bow to your greater wisdom 

I thought I'd invest in shares this year, I've done a lot of reading in preparation, but if you guys are telling me to sit back and watch, then I will.


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## jman2007 (12 January 2008)

Here's my 

the market is always going to go through cycles, and periods of ups and downs. Some people don't seem to realise that for the market to function properly, there HAS to be periods of downtrends in stock prices. 

If everyone held their postions, it would simply lead to fewer sellers and a grossly over-valued index. My advice would be to stop worrying about the short-term trends, and take a long-term view.  Look at the buying opportunities that appeared after the Sept sell-off, for those that were brave enough to go against the dooms-day mood that was prevailing.

If I was a jittery investor, I would be turning towards gold, gas and oil stocks, and perhaps reducing my postion in companies with direct exposure to the US, particularly in the credit sector.

As always, DYOR.
jman


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## Gundini (12 January 2008)

Captain Haddock said:


> hmmm...ok, I'll bow to your greater wisdom
> 
> I thought I'd invest in shares this year, I've done a lot of reading in preparation, but if you guys are telling me to sit back and watch, then I will.




Captain, there will be opportunities that may present themselves shortly, but for now it is best to wait til the dust settles.

Important factors are:

Are we heading into a bear market? This is important because they can last for years. If we are not, then usually after a downturn like this it can take 6 months for the stocks to pass their previous highs. It's too early to call a bear market, but there is enough information to suggest it is possible/probable. Your risk is in trying to pick the bottom. I am sure you are aware of basic phrases like, "Don't try to catch a falling knife", or "Bottom pickers get dirty fingers"...

Consider that the US is on line to drastically reduce interest rates. A gambling man may suggest there may be a bit of a rally to fuel the market. But rest assure, the underlying problems exist, and no bandaid sollution will acheive their required balance of growth with low inflation. 

Also remember the US dollar has been plumeting for a long time. It has alot further to go, but there will be a point where they will be able to export cheaply, and compete Globally and fiercely. The US is a very resilient economy. If they can't kick start the old stars and stripes, they will start a war! It's worked for them in the past, and it will work for them again. 

The big picture here will ultimately tell the story. Check out the all time data on the S&P 500. A pretty picture it is not! It is warning us that these times are rare, and bravado should remain with the patient.

At the end of the day, it becomes an individual choice, so I can't tell you what to do, because I don't know, but if you would like to make an informed decission, you could do alot worse than DYOR...


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## weird (12 January 2008)

> This is important because they can last for years.




http://www.fool.com/dripport/2002/dripport020725.htm



> What is a bear market?
> We thought you'd never ask. A bear market is defined as a 20% or greater decline in value for a major stock market index (namely the Dow Jones Industrial Average, S&P 500, or Nasdaq Composite). Once stock indexes fall 20% or more from prior prices, we're said to be in a bear market.
> 
> How often do bear markets happen?
> Since 1956, a bear market has occurred, on average, once every five years. In the last 50 years, we've seen about 10 bear markets. Prior to this one, 1990 was our last true bear market. So, when this bear market started in 2000, we were statistically overdue.






> When will the bear market end?
> Since 1942, the average bear market lasted about 10 months, peak to trough, while about 35% of bear markets have lasted 1.5 to 1.8 years. After a bottom is hit, rebounding is usually a volatile, sporadic process. If we assume this bear market began in spring 2000, it's more than two years old, making it one of the longer bear markets in history. If history is any guide (there's always a chance history will mislead us), we can "expect" stocks to stop sliding in this dramatic fashion soon.




On a side note, major Bank stocks are already down about 20% from recent highs ... however the overall index has not fallen this far (yet ???) ... And not a bad call for that article, which was written in July 25, 2002.


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## nizar (12 January 2008)

weird said:


> And not a bad call for that article, which was written in July 25, 2002.




Yeh i was thinking the same thing.


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## cordelia (13 January 2008)

Captain Haddock said:


> So what happens typically in a bear market?  Do people pull out and put their money under their matress, or ride it out, or still bravely invest in certain companies...?  What's the general feeling/strategy?  Sounds like I should keep my $ in the bank earning 8.5%...perhaps I should wait until the markets hit rock bottom (whenever that might be!  : )
> 
> (Thanks for humouring a noob like me)




You have to do what's right for you. Basically how much are you prepared to lose. How will you know when the markets hit rock bottom?

I am a novice and like everyone else I hate losing money. I started dabbling in the stock market as a hobby and unbelievably up until dec have never had a loss. I haven't made a fortune but its been a lot of fun and I have never risked money that I needed in the short term. 

However, I bought into some bank stocks in December and PEM..fortunately I got rid of most of banks but the ones I still had took a tumble ..mqg    Anyway I don't know enough about the stock market or charting to guess where its going so I have converted a lot to cash and parked it in my mortgage. At 8.4% I get security and no cgt. Its not huge but its safe.

I can draw down on it when I need to so its still liquid.. I still have some shares which are down but they are solid stocks. 

I just asked myself if everything went pear shaped did I have enough cash to ride it out and the answer was no.....so I took a loss on the stocks that would give me less return than my mortgage. I don't want to be in the position of being forced to sell stocks at dirt cheap prices because I need the money. That's when the smart people buy. 

It may go the other way and I could lose some profit but I just don't have the skills to play the game.  

...build on your strengths.....embrace your weaknesses.


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## weird (13 January 2008)

Hi Nizar,

Just some further thoughts, after reading your reply (thanks),  considering that in the above post, if we require a 20% fall in an index, to finally conclude we have a 'bear market', which then possibly could rapidly start again into a bull market, that is, we acknowledge we have a very 'lagging' indicator, I ponder over the effectiveness of attempts at 'market timing', especially for long term trading systems which are designed to take advantage of the historical market upward bias.  The other extreme of a lagging indicator , could be to have a very "over-sensitive" or a predictive indicator.

And further, if only such lagging indicators are an absolute to our present position in a cycle, I also wonder of the effectiveness of other attempts to determine whether a market (that is, tradeable or group of tradeables) has also changed to a trending or ranging behavior, to then attempt  a 'timing' switch for a change in strategy (which may include standing aside) which I also see attempted by other system designers.

One method I am aware of, that does not include general "market timing", uses system feedback only based on its own equity curve. And the trader may use a group of systems, and may stop trading one system for a while until the 'imaginary' equity curve points back up again, and will simultaneously  continue to trade his/her other systems until similar feedback is provided. That is, instead of 'predicting', one waits to be told that the conditions may have changed.

Another alternative, particularly if one solely uses a long only stock system, which is designed to take advantage of the 'upward bias' of the market, and has filtered his signals to only trade stocks which have extreme bullish sentiment regardless of wherever we are in the overall market cycle, one may just grin and bear the pain for the duration of a bear market, but continue to take signals whenever they arrive (and hopefully beat the index, with his/her trading in the positive territory), even if it means falling into cash for some of this cycle due to lack of signals. As a technical system trader, I assume that an exit would have been decided on before entering the trade. Hopefully one has an expected historical drawdown, that one has accepted before trading, and if exceeded then one would decide whether to continue trading (either completely or that system).

The above, are just some of my thoughts at this current time, and in no way a recommendation or suggestion. DYOR.


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## treefrog (13 January 2008)

good post weird - was wondering when someone was going to post a definition of what was being discussed - hadn't "bought in" to this thread because of that.

I think the following from wikipedia also helps:

Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time. By one common definition, a bear market is marked by a price decline of 20% or more in a key stock market index from a recent peak over a 12-month period. However, no consensual definition of a bear market exists to clearly differentiate a primary market trend from a secondary market trend.

Investors frequently confuse bear markets with corrections. Corrections are much shorter lived, whereas bear markets occur over a longer period with typically a greater magnitude of loss from top to bottom.

treefrog's long held view is that it all depends on your trading time base

if day by day, most sectors/indexes are in bear mode now

but week end by week end   - the long term trader/investor, we don't yet have a bear

and according to definiton etc, you can't be sure until its over/nearly over

but I am definately not happy with that idea so I use the old basic, tried and true market rules to define trend
*Uptrend:* [but first decide if you are trading EOD (end of day prices) or EOW week) and put that on your chart] the price action makes higher highs and higher lows after a downtrend has been broken
Downtrend:the price action makes lower highs and lower lows after an uptrend has been broken

for me, a bear market is the establishment of a weekly downtrend

I suspect there will be a lot more agreement on this site when (if ) the EOW downtrend is confirmed
most indexes on the EOW chart are *near* to breaking the Uptrend and confirming a new downtrend

an important one that already has confirmed is the "engine room" of the US the russell2000 index


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