Recovery or Dead Cat Bounce?

[Gordon Gekko]

While you were sitting on the sidelines as the market rallied 20+% a lot of us were taking advantage of this rally and not giving two hoots as to why it was happening.

If the trend turns, then many of us will simply about face and attempt to make money out of the ride down.

Glad to hear you are happy

I haven't always been on the sidelines mate
But thats great news you are making such awesome gains!
Hopefully over a five year period you will still be ahead and hey if you are you should become a fund manager as you would be a Warren buffet class trader!

G

 

[nunthewiser]

you would be a Warren buffet class trader!

G

um thats hardly anything to be proud of at present

 

[Real1ty]

I haven't always been on the sidelines mate
But thats great news you are making such awesome gains!
Hopefully over a five year period you will still be ahead and hey if you are you should become a fund manager as you would be a Warren buffet class trader!

G

Not smart enough to be a WB class investor (he isn't a trader) and i'm really just a sheep, follow the trend, it's pretty simple stuff.

 

[Gordon Gekko]

Not smart enough to be a WB class investor (he isn't a trader) and i'm really just a sheep, follow the trend, it's pretty simple stuff.

I was being facetious as I'm sure are
Hey if you can make consistent gains of 20% and pick to bottoms and tops then good on you man!

Let me get my wallet

G

 

[Real1ty]

I was being facetious as I'm sure are
Hey if you can make consistent gains of 20% and pick to bottoms and tops then good on you man!

Let me get my wallet

G

You might want to read my post again.

The Market rallied 20+%, many stocks rallied a lot more.

Following a trend is not picking tops and bottoms...

 

[Gordon Gekko]

You might want to read my post again.

The Market rallied 20+%, many stocks rallied a lot more.

Following a trend is not picking tops and bottoms...

Duely noted!

So which way is the trend going then?

G

 

[haunting]

Depression Drivel? Anyone?

Make a lot of sense to me. It would be totally disastrous for someone to have firstly missed the rebound from the March low to the current level (say 3100 to 4000 = 29% gain in the index, with individual stock gaining much much higher than that, stocks like CBA and BHP from 27 to 38 =about +40% gain); and then further missing out the subsequent rebound at the end of the current correction. I guess it's horses for courses huh?

That correction call, in part, is based on some drivel about how this global recession is following the same path as the Great Depression thus far. While I don’t pretend to have a perfect crystal ball and I’m certainly not suggesting that we’re out of the woods, I think it is dangerous and completely disingenuous to be making such a comparison.

Learn from these episodes, absolutely, find out what we did wrong, you bet, but to suggest that we are automatically on the same path now I think is just lazy. It completely overlooks the significant changes to institutions, frameworks and what have you – moreover, it underplays the significant difference in policy responses. The economic setting that affected decisions was very different back then – it’s a very different scenario. So my suggestion is not to be sucked in by this stuff – it makes an interesting read for history buffs but I wouldn’t use any of it to guide investment decisions.

 

[grace]

Depression Drivel? Anyone?

Make a lot of sense to me. It would be totally disastrous for someone to have firstly missed the rebound from the March low to the current level (say 3100 to 4000 = 29% gain in the index, with individual stock gaining much much higher than that, stocks like CBA and BHP from 27 to 38 =about +40% gain); and then further missing out the subsequent rebound at the end of the current correction. I guess it's horses for courses huh?

That correction call, in part, is based on some drivel about how this global recession is following the same path as the Great Depression thus far. While I don’t pretend to have a perfect crystal ball and I’m certainly not suggesting that we’re out of the woods, I think it is dangerous and completely disingenuous to be making such a comparison.

Learn from these episodes, absolutely, find out what we did wrong, you bet, but to suggest that we are automatically on the same path now I think is just lazy. It completely overlooks the significant changes to institutions, frameworks and what have you – moreover, it underplays the significant difference in policy responses. The economic setting that affected decisions was very different back then – it’s a very different scenario. So my suggestion is not to be sucked in by this stuff – it makes an interesting read for history buffs but I wouldn’t use any of it to guide investment decisions.

Kohler also said at the beginning of 2008, BHP would outperform having money in the bank. I don't think he is always right!

 

[haunting]

Kohler also said at the beginning of 2008, BHP would outperform having money in the bank. I don't think he is always right!

Yes I agree. Kohler is not always right. You should read that article again. May do you some good.

 

[Beej]

Kohler also said at the beginning of 2008, BHP would outperform having money in the bank. I don't think he is always right!

BHP certainly has massively outperformed the XJO index (ie ASX-200) since start of 2008 (see attached chart). And in fact depending on exactly when in early 2008 you bought, up to 10%+ capital gain (up to this point in time), plus about 3-4% in dividends could have been made, which means it would have out-performed having cash in the bank, especially after tax!

PS: I'm not saying AK is always right or anything - but on BHP he may have made a good call - at least from a stock market point of view?

Cheers,

Beej

 

[lasty]

"Kohler also said at the beginning of 2008, BHP would outperform having money in the bank."

Outperform what? BNB... big tick there

 

[gfresh]

Kohler also said at the beginning of 2008, BHP would outperform having money in the bank. I don't think he is always right!

The article above was written by Adam Carr

 

[grace]

The article above was written by Adam Carr

Oops, I hope you will all forgive me, Kohler did not write that after all. He only just got it wrong on the cash vs BHP call for 2008 I see. He was very very confident on that call I recall when he wrote it up in the first week in Jan 08.

 

[dan-o]

Kohler also said last night that in the past 4 days we have broken out of the trading range we have been in for the past 3 months, on the downside. What do people think will happen next??

 

[gfresh]

Depends on where you wish to draw your trend line, but according to mine, 3850 is right at the trend line which begun in late March. At close today we were 3887. Very close, but still holding.. just

There was some good volume today on some of the larger stocks (also note option expiry), which tends to indicate some buying on a fairly flat day. We will see.

A decisive break below 3850 in the next day or two may mean the current rally is over, and would be a sell signal if you were following this trend.

 

[Uncle Festivus]

Kohler also said last night that in the past 4 days we have broken out of the trading range we have been in for the past 3 months, on the downside. What do people think will happen next??

The trading range of doji's for the last 2 weeks broke to the downside this week. Goldman & Morgan Stanley are doing their best in the quant pit with the support of the US Fed & treasury, but Mr Bond is telling them otherwise?

Window dressing till fin year end then look out below

The US market is being held up till the banks get their capital issues out of the way, despite the 300 pts dip this week and the 60pt 'rally' today (suspiciously due to a surge in banking shares?).

There are only 2 types of US banks these day - the ones that have gone bankrupt and the ones that are insolvent. They are still undercapitalised despite the so called stress test.

The real unfunded liability of the US government present & future debt is now somewhere near $100 TRILLION! The US is insolvent......

 

[adobee]

Oops, I hope you will all forgive me, Kohler did not write that after all. He only just got it wrong on the cash vs BHP call for 2008 I see. He was very very confident on that call I recall when he wrote it up in the first week in Jan 08.

I looked at Kohlers report pretty much everything he wrote up to a year ago was 'why the mining boom will last for ten years' buy bhp its a $50 stock...

 

[IntrinsicValue]

Which shows you don't have a clue about how lucrative day trading can be.

hehe, just think of all the brokerage expenses added up along with the CGT expenses (without using the discount method) that you could have used to compound from . feels like such a waste just thinking about it.

of course - if you want to look at the bright side - day trading will be helping the government with their deficit lol

 

[Nyden]

hehe, just think of all the brokerage expenses added up along with the CGT expenses (without using the discount method) that you could have used to compound from . feels like such a waste just thinking about it.

of course - if you want to look at the bright side - day trading will be helping the government with their deficit lol

Often, traders don't pay CGT, they pay ordinary tax - because they're actually traders as a profession, and not investors.

Try paying the bills with a buy and hold strategy mate, you'll be living on the street in a month.

 

[AustSS]

This is definitely not advice or meant to be accurate, but I have 'heard' from some sources that the problems with the banking system and credit markets in Australia hasn't even come to light completely yet - and Australia is in for some more pain before there is any real recovery.