November Correction???

[austek]

Not as experienced as some of you, but I would have thought 50/50 was ok.

It's not the amount of wins, and times you get the prediction right, but I believe it's getting the average win amount far greater than the average
loss. Not so?

 

[Buffettology]

To tell you the truth, I converted 90% of my portfolio into cash for the first time in a very very long while!

I have made 45% over the past 6 months, and with 20% p.a as my target rate, I can afford to sit on the sidelines for a while now.

With 7000 approaching, I think that will act as a resistance point for a while, and if we move through it, we will probably get a correction soon after.

Not to mention, with the IR expected to rise, I can see a correction coming, if not at least a fall of 5% upto Wed this week. We already took nearly 2% today, so I will buy back my stocks at a bit of a discount.

Now wait and see.............

 

[Bush Trader]

Well, I have had all my Super (Fairly large) in cash, since Oct 1 this year, and have been day trading trying to profit on bounces after solid pullbacks (2 Days). I haven't been holding overnight, so basically I am waiting for a large correction. The problem with this play is I hardly ever get it right... In fact, it is usually when I jump back into the market that the major corrections happen. So, If this theory holds up, you all should be safe til Jan 2008. (Although, I may stay in cash for an extra 3 months if nothing has corrected).

I am banking on the big pullback before the end of the year, then load up at discount prices and ride the wave to the China Olympics. (My Plan for what it is worth).

As I mentioned before, I am often wrong... And while I am picking up a lousy 5% or so in cash, evryone else is getting 20%...

The market has taught me to stick with my plan though.

G’Day. Stick to your guns I’ve been out since the 30/9/07 with my super as well and 60% cash 40% still invested. I have since seen the market put on 400 odd points, however I have learnt from past mistakes and have found that if you change your plans you often get burnt. Look at the selling pressure that BHP was under today, and I got ribbed for selling out on the 25th of September for $45 collected 2 divs, CGT discount and 79% return for the 12 months. The buzz was after the sub-prime that the US dollar was going to tank, gold was going to bust $1000, commodities and all things Asia were the place to be. I don’t discount any of these thins, however a lot of hot money has entered our market, an alternate way of purchasing Aus$ in effect. BHP and RIO were popular parking spots and potentially overbought as such. Whilst these two were going gangbusters indexes were rising and as such index funds were required to purchase other stock to balance their indexes for no other reason than the indexes were rising. Due to the weight of these two in the indexes what will happen if they are sold off? What will happen when the sub-prime baby becomes a toddler? What will happen if there is a short term bounce in the US$? Good Luck, stick to your guns at least you have the satisfaction of being wrong all by yourself.


Cheers


BT

 

[explod]

G’Day. Stick to your guns I’ve been out since the 30/9/07 with my super as well and 60% cash 40% still invested. I have since seen the market put on 400 odd points, however I have learnt from past mistakes and have found that if you change your plans you often get burnt. Look at the selling pressure that BHP was under today, and I got ribbed for selling out on the 25th of September for $45 collected 2 divs, CGT discount and 79% return for the 12 months. The buzz was after the sub-prime that the US dollar was going to tank, gold was going to bust $1000, commodities and all things Asia were the place to be. I don’t discount any of these thins, however a lot of hot money has entered our market, an alternate way of purchasing Aus$ in effect. BHP and RIO were popular parking spots and potentially overbought as such. Whilst these two were going gangbusters indexes were rising and as such index funds were required to purchase other stock to balance their indexes for no other reason than the indexes were rising. Due to the weight of these two in the indexes what will happen if they are sold off? What will happen when the sub-prime baby becomes a toddler? What will happen if there is a short term bounce in the US$? Good Luck, stick to your guns at least you have the satisfaction of being wrong all by yourself.


Cheers


BT

I concure also with Gundini and in fact after reading his post I wondered all day and just before the market closed I liquidated 50% of my holdings. As with you both mine is also DIY Super so caution and protection of principal is paramount. I am happy with the holding I still have as it is defensive and selected specifically for the situation we are in.

Cheers to you both for the reasurance.

 

[Edwood]

ASX200 now off 4.7% from the high last week, Hindenburg called it in July, looks like its doing it again

 

[Awesomandy]

I've just done the opposite, actually. Recently, I decided to put the equity back into my super portfolio. It sounds a little silly, but having watched everything happening, and realising that, at my age and my super balance, the principal isn't really worth protecting.

 

[Rainmaker2000]

Interesting thread Awesomandy......I must agree with taking risks while your young although I don't play around with my super......I see super as more of a booby prize for if I fail to get rich before then......To be honest, I started this thread on the correction but I pretty much always stay fully invested in stocks with a margin loan as well!!! Capital protection is however the most important objective and the most important thing is that your investment method is a risk mitigating tool. For example, I pretty much never buy cyclicals, I don't trade, almost never buy popular stocks......I had BHP and Leighton on a platter at 12$ and $7.30 respectively and could not break my rule....in retrospect, I should have made an exception on Leighten, a truly great cyclical......my point is I love risk but its the type of risk.....if you are into mining, construction, banks at this stage of the cycle, you are paying a high valuation for what very well could be declining businesses

 

[prawn_86]

I think/(hope) that once the RBA raises rates tomorrow, it should start to see a flow on effect as more money enters our market looking for higher yeilds.

This should help to stabnot push the ASX back up to its recent highs.

Thats just my theory and my macro knowledge isnt really up to scratch yet...

 

[nizar]

Interesting thread Awesomandy......I must agree with taking risks while your young although I don't play around with my super......I see super as more of a booby prize for if I fail to get rich before then......

LOL so do I.

 

[Nick Radge]

it should start to see a flow on effect as more money enters our market looking for higher yields.

Prawn_86,
You're looking at this the wrong way. Assuming the basic economic principal, the flow goes out of stocks and into fixed income.

 

[prawn_86]

Thanks Nick,

I knew that this would happen locally (mental blank i guess ). But if overseas funds enter the country, specifically looking for yeilds, so mainly into the debt/bonds market wont there be a flow on effect into our equity markets?

serious question, sorry if it sounds like im not with it...

 

[Nick Radge]

The same thing occurs but it has a few other 'added; complexities such as currency risk etc. The widening gap in the interest rate spreads should keep the A$ on a higher trajectory which may suit an overseas' fund manager, but they still need to invest the funds into an asset class of some type once the funds hit.

90-day paper at 7.5% with no risk, or
the banking sector at 4.5% with possible risk, or
resources sector at 1.0% with higher risks...

 

[Edwood]

things are not looking too hot at the moment, Dow currently off 2.5% (350 pts), SPX has taken out a key level for the bullish case