Stock Market Crash - End of the Bull!

[Buffettology]

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

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

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

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

 

[sleeper88]

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

 

[Buffettology]

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

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

 

[Knobby22]

Valuations are high however not overly.

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

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

 

[Buffettology]

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

Very difficult situation.

 

[mmmmining]

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

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

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

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

 

[Wysiwyg]

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

Very difficult situation.

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

 

[sleeper88]

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

 

[Glenhaven]

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

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

 

[nioka]

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

 

[Freeballinginawetsuit]

Hi Nioka,

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

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

 

[Glenhaven]

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

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

A 10% fall is really not an issue.

 

[nioka]

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

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

 

[Buffettology]

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

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

 

[Freeballinginawetsuit]

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

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

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

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

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

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

 

[nioka]

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

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

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

 

[misterS]

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

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

 

[Freeballinginawetsuit]

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

Yep, see youre point .

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

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

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

 

[ROE]

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

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

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

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

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

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

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

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

 

[vishalt]

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