You know, this comes across as being a little bit jealous and/or bitter towards those who may have been more successful for whatever reason? Eg, not everyone who drives down the street in a sports car, or purchases an "expensive" (maybe for you) house in the inner city, has done so with bucket loads of borrowed money. Many people I know have bought marque sports cars and "expensive" houses for cash, or bulk cash (50-80% of cost) plus very moderate borrowing in the case of houses. That cash is what they saved, earned, and/or gained through returns from other investments etc. Likewise for people that build their dream home out in the burbs - many have saved for years and years, already owned a house that they sold etc. Very few purchase assets of this kind on 100% borrowed funds, yet world views such as that expressed above suggests a view that the majority have done this! If this is what you truly believe, then I would argue that is a very naive view of the world.
Recessions certainly sort out the chafe though! After a recession you could be almost certain that the next expensive sports car you see is owned outright and not on a lease or hire purchase
Anyway back on topic now.....
Cheers,
Beej
Actually just to get back on topic - attached is an interesting chart I found. It shows the annual percentage returns of the All-Ords Accumulation Index going back to 1900. It is interesting to note that the worst sell-offs (over either a 1 or 2 year period) have almost inevitably been followed by a year of stellar returns.
Cheers,
Beej
Actually just to get back on topic - attached is an interesting chart I found. It shows the annual percentage returns of the All-Ords Accumulation Index going back to 1900. It is interesting to note that the worst sell-offs (over either a 1 or 2 year period) have almost inevitably been followed by a year of stellar returns.
Cheers,
Beej
You know, this comes across as being a little bit jealous and/or bitter towards those who may have been more successful for whatever reason? Eg, not everyone who drives down the street in a sports car, or purchases an "expensive" (maybe for you) house in the inner city, has done so with bucket loads of borrowed money. Many people I know have bought marque sports cars and "expensive" houses for cash, or bulk cash (50-80% of cost) plus very moderate borrowing in the case of houses. That cash is what they saved, earned, and/or gained through returns from other investments etc. Likewise for people that build their dream home out in the burbs - many have saved for years and years, already owned a house that they sold etc. Very few purchase assets of this kind on 100% borrowed funds, yet world views such as that expressed above suggests a view that the majority have done this! If this is what you truly believe, then I would argue that is a very naive view of the world.
Recessions certainly sort out the chafe though! After a recession you could be almost certain that the next expensive sports car you see is owned outright and not on a lease or hire purchase
Anyway back on topic now.....
Cheers,
Beej
the same people involved in the 'manufactored financial crisis" are now manufactoring a financial recovery....
anyone feeling just a little bit duped by this fiasco...its been well organised
oh, and all the old names are still there whether ceo's or pollies....well most of them...
extract........
Precisely kincella
I can see how the sportscar example is a bit of a generalisation. Point taken Beej.
I can use any number of other examples.
Such as a young person maxing out a credit card on consumer goods they cannot afford. Like a young lady who might want to buy fashion items or a young buck on salary wanting to buy a new holden/ford to impress his mates at the factory. All I'm saying is what happens when these people lose their jobs. The same example could be applied to the business owner who has to call in the receivers because no-one has wages or access to credit to buy his stuff anymore.
All I'm trying to say is this rally has no substance, it has been fueled by US Banks laden with debt.
The property boom has been substantial in the US as well as OZ. Although prosperity in OZ has had a greater connection and run parallel to the mining boom. Also if you look at the FHOG grants over the last few months from ABS stats you will notice the majority have no money down. Also how many households are paying down mortgages with credit cards ATM. A small percentage??
China will continue to buy Aussie Commods real cheap! But our economy is inextricably linked to the US anyway, so when the bear comes growling back look out below!
There is no envy on my part at all. But from my contacts in Melbourne I hear the repossessed luxury car auction trade has done extremely well in the past 12 months. I certainly envy those guys, what a great business to have in times like this.
But just to stay on topic. Still firmly believe this is a Dead Cat and would go short financials if the ban wasn't in place.
Here's a great interview with Jim Rogers telling everyone the reality of bank bailouts. I don't think he is envious of anyone maybe a bit pissed-off at stupid government decisions. Just go 2 minutes into the Youtube link. The bankers keeping their maseratis, lamborghinis or ferraris
If I had the means to buy a Ferrari, I wouldn't buy one anyway because they don't make a model with a cup-holder:
That intervew is like 6 months old.
I like Jim rogers but the information might be a little dated.
Best
G
Yeah it's about 2 months old.
The abstract has not changed though.
Next will be commercial real estate, prime mortgages, Alt-A's,
credit cards etc..
Unsustainable.
Yeah just thought I would mention the date as he says he is shorting IBM in that interview. I believe they are releasing results tomorrow and I would not want anyone to get stuffed around thinking its current. They should realease awesome less worse then expected green shoots yada yada, so shorting may or may not be a good idea on IBM tomorrow.
Best
G
In the markets and in life it may be sunny in the foreground but the background is dark and scary. Likewise it may be dark and scary in the foreground but sunny and wonderful in the background. To ignore the background would be foolish.
Good luck!
Like most off you I am waivering between bullishness and bearishness. When will this rally end? Will there be a mild correction or depression style engulfing correction? will there be a correction at all?(Hell we're going to 10000 baby)
A couple of sayings might be appropriate:
"History always repeats itself in the Markets"
"Sell in May and go away and don't come back to St Ledger's day"
The similarities between last years rally and this years rally are quite striking.
For instance :
After several months of the DOW market going down it finally bottomed on Monday the 9th March 2008 at 11740 day close.
This year it bottomed on Monday the 10th March at 6547 day close.
The Dow then peaked on Friday 2nd May 2008 at 13058 close
Yesterday, 1st May (A Friday) the market closed at 8212.
2008 Rally went for 54 days
2009 Rally has gone for 54 days.
Next week the US government reveals the results of the bank stress tests. Could this be the turning point? To say yes would be sheer speculation but similarities to last year are there.
My advice is to see how the US markets react to these stress tests. Don't go commiting all your money into longs on Monday.
In the markets and in life it may be sunny in the foreground but the background is dark and scary. Likewise it may be dark and scary in the foreground but sunny and wonderful in the background. To ignore the background would be foolish.
Good luck!
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