Stock Market Crash - End of the Bull!

Freeballinginawetsuit said:

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

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I have a nephew who was an exchange student in India years ago. Has a lot of time for them. They are english speaking, which makes doing business easier.
With regards to the USA/China relationship I think the India buffer applies there as well. I am looking at investing in more companies who will be operating in India. Maybe we should have a new thread " India - the bull calf"

misterS said:

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.

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Japan never had the economies of scale of China, nore the resources, global marketplace, foriegn investment, accesibility to infrastructure/ tecnology etc. In fact Japans industrialisation would have come much sooner, if it had the resources to fuel the fire without the need to land grab necissating WW2 in the Pacific. The US has had its thumb on Japan since .

Post 'Isolation Policy' the US have thumbed many emerging economies, this time around with China the scenario is all to clear, not only can they not thumb it.........they have to invest in it for thier own survival. Being the greedy pig of free enterprise they are, invest heavily they will!.

ROE said:

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

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Any hot tip for tomorrow?

nioka said:

I have a nephew who was an exchange student in India years ago. Has a lot of time for them. They are english speaking, which makes doing business easier.
With regards to the USA/China relationship I think the India buffer applies there as well. I am looking at investing in more companies who will be operating in India. Maybe we should have a new thread " India - the bull calf"

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I have only been to India once Nioka (93) and it was an experience...........lovely culture and people, but a culture shock indeed.

I sat on an internal flight next to a guy who was sweating profusely with no deoderant on and holding a bunch of smelly dead flowers.........I won't even mention the 'herded like cattle', train trips.

vishalt said:

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.

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There it is, the, "This time it's different" quote.
The top is nigh.

jog on
d998

vishalt said:

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.

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In every boom people believe its different and thats why they get caught. You are right it's different, but every boom overshoots and then falls back to fair value, actually because of panic it falls below fair value.

nioka said:

Any hot tip for tomorrow?

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I think IFM is pretty good at current price (0.69 cents) ...check for yourself thought..
Awesome profit margin, very little debt, very high rate of return on equity..

I like PFL too at current price (1.65) ..new stock but people still eat pies at all the football matches and at home
and potential of capturing the US market is money making machine if they can convince the American
meat pie is a pie with meat not pie with with stuffed apple

Glenhaven said:

In every boom people believe its different and thats why they get caught. You are right it's different, but every boom overshoots and then falls back to fair value, actually because of panic it falls below fair value.

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Exactly!

The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.

Though, China seems to be doing very well at managing their growth so that it is sustainable in the long-term. We may just see an upward trend in the market for a couple of years yet, but no doubt we will see a crash, or at least a VERY LARGE correction over the next couple of years I beleive.

Might bump up to 50% of my portfolio in stocks, just to neutralise the risk.

Buffettology said:

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.....?`

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Coal Stocks are not overpriced

CEY, MCC, GCL, RSP, FLX, etc

thx

MS

Buffettology said:

Exactly!

The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.

Though, China seems to be doing very well at managing their growth so that it is sustainable in the long-term. We may just see an upward trend in the market for a couple of years yet, but no doubt we will see a crash, or at least a VERY LARGE correction over the next couple of years I beleive.

Might bump up to 50% of my portfolio in stocks, just to neutralise the risk.

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I am watching PE ratios closely to see if they get too high then I will move more to cash as you suggest. In the meanwhile the opportunity cost if you have too much cash in a rising market is an issue.

The other think people forget is their superannuation funds. Depending on what you have you could lose more on your super than on your direct share investments. You can of course make these a more defensive mix as well.

Glenhaven said:

I am watching PE ratios closely to see if they get too high then I will move more to cash as you suggest. In the meanwhile the opportunity cost if you have too much cash in a rising market is an issue.

The other think people forget is their superannuation funds. Depending on what you have you could lose more on your super than on your direct share investments. You can of course make these a more defensive mix as well.

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Yeh, how do you define a high PE ratio? What would it have to get to before you would withdraw?

I currently have a far larger amount to invest than I do in super, probably 30 fold, so its definitely my direct share investments I am worried about.

michael_selway said:

Coal Stocks are not overpriced

CEY, MCC, GCL, RSP, FLX, etc

thx

MS

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You think Coal will maintain a high return over several years? I am more into long-term investments than short-sighted trading. Hence, my need for a crash/large correction to find undervalued, solid companies again. Most seem to be through the roof at the moment, I am talking Woolworthes, JB Hi-Fi etc.

Buffettology said:

Exactly!

The other thing is, all you need is a slowdown in the Chinese growth in GDP, and you could have a HUGE crash on the ASX.

Though, China seems to be doing very well at managing their growth so that it is sustainable in the long-term. We may just see an upward trend in the market for a couple of years yet, but no doubt we will see a crash, or at least a VERY LARGE correction over the next couple of years I beleive.

Might bump up to 50% of my portfolio in stocks, just to neutralise the risk.

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Dear Mr. Bluffettology.....Since you have no idea what the markets will do (and neither do I) maybe a question mark at the end of the thread opener would be more appropriate. :axt:

Wysiwyg said:

Dear Mr. Bluffettology.....Since you have no idea what the markets will do (and neither do I) maybe a question mark at the end of the thread opener would be more appropriate. :axt:

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Obviously, that is why I stated opinions.

No need for sarcasm. It is a very interesting topic though, and one that is debated by numerous experts, why not begin discussion on the topic on this forum.

Buffettology said:

Obviously, that is why I stated opinions.

No need for sarcasm. It is a very interesting topic though, and one that is debated by numerous experts, why not begin discussion on the topic on this forum.

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Post is not sarcastic and I mean what I say.You have no idea.A question is what you ask.

FWIW

Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.

I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - "Goldilocks has left the building".

wayneL said:

FWIW

Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.

I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - "Goldilocks has left the building".

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Yep corn not looking to flash

Corn futures dropped more than 5% Friday -- the maximum price movement allowed for the contracts on the Chicago Board of Trade -- after the U.S. Department of Agriculture said it expects U.S. farmers to plant about 15% more corn acres than last year, as farmers take advantage of market demand for corn-based ethanol.
The annual USDA prospective plantings survey showed farmers intending to use 90.45 million acres for corn, above the 88 million acres predicted by analysts.
The data set "the stage for a rebuilding of depleted corn inventories and a subsequent reduction in corn prices during the fall of 2007," David Driscoll, an analyst at Citigroup, said in a research note Friday.
'The USDA's Plantings report sets the stage for a rebuilding of depleted corn inventories and a subsequent reduction in corn prices during the fall of 2007.'
— David Driscoll, Citigroup

Against this backdrop, corn for May delivery dropped 20 cents, or 5.1%, to settle at $3.74 1/2 a bushel in Chicago. Trading was halted at that level because that's the exchange's daily price move limit. The contract hasn't traded at a level that low since Jan. 10.
The intended plantings would be a record number, according to Darin Newsom, an analyst at Omaha, Nebraska-based DTN. "But it doesn't mean anything," he said. Other analysts say the figure would be the largest since the 1940s.
"Production is also expected to be a record (theoretically), but ending stocks should still drop," he said.
Tim Hannagan, a grains analyst at Alaron Trading, said it best: "Come Monday, the trade will say it is not what you plant, but wheat you grow."
"A drought from mid-June to July 25th -- key yield development time -- could reduce yields sharply enough to void the current bearish acreage number," he said in a note to clients.
At 90.45 million acres planted and about 81.4 million acres harvested, using the trend-line yield of 153.1, that would mean production of about 12.5 billion bushels, said Newsom in e-mailed comments.
"That would just cover, if not still lose ground to the expected growth in demand in 2007-2008 -- meaning ending stocks could decrease despite record production," he explained.
So overall, the plantings number could be viewed as bearish for corn prices, but the final number of plantings will depend heavily on weather in the Midwest, which has endured rainstorms that lead to less corn planting, he said.
Another thing for traders to consider is whether the plantings report will discourage some from actually planting as much corn as they earlier intended, said Todd Hultman, president of DailyFutures.com, in his Web site commentary.
The 2007 USDA survey also showed farmers planned 67.14 million acres of soybeans, down from 76.9 million planned in the previous survey. See the full report.

Buffettology said:

Yeh, how do you define a high PE ratio? What would it have to get to before you would withdraw?

I currently have a far larger amount to invest than I do in super, probably 30 fold, so its definatley my direct share investments I am worried about.

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I look at historical PE's. One think to note is that Australian PE's generally been lower than world PE's and lately they have risen to be at a premium. This would usually be of concern for the strengh of the Australian market, however, it has in large part been driven by the resources boom.

wayneL said:

FWIW

Rumours of the bear's demise have been greatly exaggerated... with apologies to Mark Twain.

I'm not certain yet, but I think I have detected a changing of sentiment in the market I trade and to borrow a phrase from Mr Barry Ritholtz - "Goldilocks has left the building".

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Do I assume from the response of Freeballinginawetsuit that you are in the corn market??

Glenhaven said:

Do I assume from the response of Freeballinginawetsuit that you are in the corn market??

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That's just one market I trade. Unless specified, I mean the US stock market.