# What's happening with all ords?



## emily (23 February 2005)

There has been a big decrease in the all ords this week -15 points and then now -35 today. Every stock is going down and down , noooooooooo. why is this happening? what is taking into consideration that effects the all ords?

emily


----------



## Warren Buffet II (23 February 2005)

emily said:
			
		

> There has been a big decrease in the all ords this week -15 points and then now -35 today. Every stock is going down and down , noooooooooo. why is this happening? what is taking into consideration that effects the all ords?
> 
> emily




Hi Emily,

I think these are some of the factors:

1) Interest rates up next month and probably in April or May again. So, Term Deposit yields better than Share yields.

2) Report season with companies overvalued. Gains already built-in the share prices.

3) US economy worries.

4) And, when there is a bull market "new" people start putting money in companies without checking fundamentals (again overvalued stocks) and simply the big guys are cashing-in.

There are still some shares that keep going up and up, BHP, RIO, Macquiare Bank but the problem is that the sharemarket is driven but sentiment and as soon as someone get scared the ball will just drop no matter how good your results and earnings are.

I personally got out of the market about 1 week ago after seeing some of the result season "results". I am waiting now for new opportunities but I think the market can get back to normal after the Reserve Bank decision next week. 

So, what I guess I am trying to say is what happens with the Bakery store story. You know a person which owns a Bakery and wants to sell it to you. This place will give you a return of 6%/year (with a lot of risk). So you have to think twice if that business is OK for you level of risk or you just prefer to put the money in your bank at @5.25%/year. I found a very interesting article at www.smh.com.au this morning but I can't find it anymore.

Those are my thoughts and I could be wrong.   

Regards,

WBII


----------



## money tree (23 February 2005)

"sometimes stocks go down"


----------



## wayneL (24 February 2005)

money tree said:
			
		

> "sometimes stocks go down"




LOL Very Succinct MT! But what more can be said?


----------



## Aussiejeff (24 February 2005)

wayneL said:
			
		

> LOL Very Succinct MT! But what more can be said?




I think the first stock market analyst - Sir Isaac Newton - had it in the bag - "What goes UP must come DOWN" !!

It's just a question of by HOW MUCH. hehe.

Obviously, it's a good idea to have sufficient cash reserves on hand at these moments to buy back into your fave shares or "top up" if you like. 

Cyclical falls can be GOOD NEWS if you can manage that........

Good trading,

AJ


----------



## Warren Buffet II (24 February 2005)

money tree said:
			
		

> "sometimes stocks go down"




Classic example of how people invest in the sharemarket, "sometimes stocks go up sometimes down".   

Very depth


----------



## money tree (24 February 2005)

unfortunately for new investors who watched the market from about August, daily rises were just what they got used to. Then when the market turns, they get surprised. "What? the market can fall? nobody told me that!"

Beware newbies.


----------



## TjamesX (24 February 2005)

I'm gonna take a punt that this was the article WBII was referring to;

http://www.smh.com.au/news/Alan-Koh...for-risk-taking/2005/02/22/1109046918604.html

Alan Kholer is one finance journalist I read a lot of.

Cheers


----------



## TjamesX (24 February 2005)

money tree said:
			
		

> unfortunately for new investors who watched the market from about August, daily rises were just what they got used to. Then when the market turns, they get surprised. "What? the market can fall? nobody told me that!"
> 
> Beware newbies.




Replace 'August' with '1999' and 'daily rises' with 'yearly rises' and there you have the property market. Pity the consequences of that market will be a lot more severe on the economy.......


----------



## DTM (24 February 2005)

Nice input TjamesX.  This is a good thread.


----------



## emily (24 February 2005)

gees .... i was having so much fun last week. this week has been very bad.  -16 points today........ when ur talking about interest rates, do u mean the banks interst rates? In what ways does interest rates effect the market ?where can i find this info?....... i guess if u wana trade, u gota accept ur downs at times. this is my first dramatic downturns of my trading life - not fun at all. im just laughing at it cuz im learning alot at the momment.

emily


----------



## Warren Buffet II (24 February 2005)

emily said:
			
		

> gees .... i was having so much fun last week. this week has been very bad.  -16 points today........ when ur talking about interest rates, do u mean the banks interst rates? In what ways does interest rates effect the market ?where can i find this info?....... i guess if u wana trade, u gota accept ur downs at times. this is my first dramatic downturns of my trading life - not fun at all. im just laughing at it cuz im learning alot at the momment.
> 
> emily




Emily,

Have a look at the article I mentioned before: http://www.smh.com.au/news/Alan-Koh...for-risk-taking/2005/02/22/1109046918604.html

Basically, why do you want to put money in the Sharemarket to get a 6% or 8% return when you can do the something similar with your saving account 5.25% (today) (next month probably 5.50%, April or May 5.75%). So, each time the Reserve Bank increases the interest rates, the sharemarket becomes more and more risky. People could argue that this is not happening yet but I am pretty sure this is already affecting the market.

Regards,

WBII


----------



## emily (24 February 2005)

ohhhhhhhhhhhhhhh now that makes sense. i get ya nows! thanx a whole heaps !
i understand how interest rates have effect on the markets now. thanx a whole bunch mate!

cheers, 
emily


----------



## emily (25 February 2005)

awww its up 29.7 today. i see that it is very depth. i learnt alot from this and now aware of the circumstances.



cheers,
emily


----------



## kooka1956 (28 February 2005)

The market has gone up in leaps and bounds for at least the last two years . It is about time for a little profit taking, particularly in light of comments made recently about the American economy and interest rate rises. The Australian market may weather a 'correction' on the American market, but it will still be affected by it. Interest rate rises also don't auger well with share prices.Theoreticaly the higher the interest rates the lower the share price.Superannuation funds are likely to swap part of their portfolios from shares to cash. Regards KOOKA


----------



## bruham (1 March 2005)

I've been sitting on my hands since December.
Being a bit of a pessimist, i've been waiting for the bubble to burst.
In my opinion, the market is too high for the returns. As mentioned you can put your money into Bankwest or Ing for the same return, and not lose it.
I'm sweating on the market to drop when the RBA announces an interest rate rise of 0.5%.

bruham.


----------



## RichKid (1 March 2005)

bruham said:
			
		

> I'm sweating on the market to drop when the RBA announces an interest rate rise of 0.5%.
> bruham.




That's a lot isn't it? If it is 0.5% in one hit the markets certainly will shudder. I got the impression they were preparing us for two small ones of .25 and talking it up to ease the effect, maybe only one hike will be required, depends on how the data turns out over the month. Bluechips were generally doing well today. We'll all know in a few hours about the hike, no point in guessing now. AllOrds looks like it's heading for new highs.


----------



## doctorj (2 March 2005)

I'm expecting only a single rise tomorrow of 0.25. I don't expect a follow up rise in the next 3 months.


----------



## tech/a (2 March 2005)

My veiw is that it is already factored in by the market.
The falls of recient days came straight after the anouncement there would be a rise.

If there isnt one (Highly unlikely) watch it fly.


----------



## Aussiejeff (2 March 2005)

Interestingly, the Dow hasn't fallen dramatically with the series of interest rate rises the Fed has made in the US over the last year. Up again today..

Maybe share markets these days move so fast on interest rate rise rumours that they affectively pre-empt such announcements to a degree (ie: the rise is already factored in?)

And 5.5% PA from a bank account (pre-tax and not counting inflation) is a pi$$ poor return in my book. I'd rather continue riding the dips and swells in the market any day..... at least until that option hits the proverbial brick wall.

Cheers,

AJ

PS:  When I look at every one of the charts here http://finance.yahoo.com/intlindices  I don't feel at all negative about the world economy at large!!! Anyone know how to trade Egyptian stocks?? hehe...


----------



## dutchie (2 March 2005)

Yes I do, theres a new new IPO that is being offered now.

The company is making mechanical camels which will revolutionise travel across the deserts (runs on raw oil - but only needs filling up once a month).

Price will soar so get in early!!


----------



## Aussiejeff (2 March 2005)

dutchie said:
			
		

> Yes I do, theres a new new IPO that is being offered now.
> 
> The company is making mechanical camels which will revolutionise travel across the deserts (runs on raw oil - but only needs filling up once a month).
> 
> Price will soar so get in early!!




Haha!

I'd prefer Robocamels that run on coal. Especially Gloucester Coal....  ;o)

AJ


----------

