The official "ASX is tanking!" panic thread

[notting]

One of the experts on Inside Business this morning predicted "about a couple of weeks to go of this rally."

It's generally pretty quick when they all start chiming that tune.
The smart money is already moving out, it doesn't wait around for the top to be established you can't profit from looking in the revision mirror.

Pity we stayed down under.

Facebook may be the titroglycerine tablet dropped in the tank!!
White swans are hader to spot than black ones!

 

[Starcraftmazter]

With the Dji up 23% since the October 11 low satisfies the definition of the US being in a bull market with a move of >+20%.

Bear market rally pal. We have been in a secular bear market for a very long time, and I highly doubt we will ever get another bull market. Or at least until new forms of energy are invented to replace oil, coal and nuclear.

 

[lenny]

SCM,

So what's your definition for a Bull/Bear market then?

The standard definition I can find is a move/trend of 20% in the either direction?.

 

[Ves]

We have been in a secular bear market for a very long time, and I highly doubt we will ever get another bull market.

Sorry - but why bother wasting your life researching and posting about shares, then? Seems counter-productive. I am sure you can find better things to do. You under-estimate the power of greed if you believe that another bull market is a low likelyhood of ever happening.

 

[Starcraftmazter]

So what's your definition for a Bull/Bear market then?

If the asx200 passes circa year 2000 heighs on inflated adjusted terms, then I would consider calling a new bull market.

Sorry - but why bother wasting your life researching and posting about shares, then? Seems counter-productive. I am sure you can find better things to do.

Unfortunately there is no other way to grow one's wealth, let alone maintain it.

You under-estimate the power of greed if you believe that another bull market is a low likelyhood of ever happening.

You over-estimate the resources provided by the spherical planet we live on (refer to my sig).

 

[Tysonboss1]

Bear market rally pal. We have been in a secular bear market for a very long time, and I highly doubt we will ever get another bull market. Or at least until new forms of energy are invented to replace oil, coal and nuclear.

Thats an opinion I find a bit weird in todays energy climate. I know alot of people are glass half empty when it comes to future energy, but heres a few things that are in our favour.

1, North America is closer to oil independence than it has been since the 60's,

2, Global Natural gas reserves has gone through the roof, and Natural gas has the ability to offset alot of oil usage.

3, For the fiirst time new nuclear plants are being approved in the US and many more around the world.

4, Vechicles and equipment are becoming more and more efficent, and switching to alternative sources of energy.

5, Renewable energy is just at the beginning of it's development cycle, and this alone will stimulate the economy.

6, Several future techs are under development that should be able to be deployed in about 20 years that will seriously alter the cost of energy.

For now, we are doing OK as far as energy is concerned, and in the future after a few little bumps energy will be plentiful and cheaper than it is today.

 

[Tysonboss1]

If the asx200 passes circa year 2000 heighs on inflated adjusted terms, then I would consider calling a new bull market.



Unfortunately there is no other way to grow one's wealth, let alone maintain it.



You over-estimate the resources provided by the spherical planet we live on (refer to my sig).

1, it's only got to get to 4400 to be equal to the asx200 2000 level, and that was a level inflated by the tech boom.

2, Heaps of ways to both grow and maintain your wealth are available to investors in todays market,

3, you under estimate humans abilty to adapt and over come.

 

[Tysonboss1]

at least until new forms of energy are invented to replace oil, coal and nuclear.

Why do we want to replace nuclear, It's pretty much the best alternative to fossil fuels we have. and with a few adjustments to the way we apply it, it will become an infinate supply,

He is just one of the future possible ideas that will create unlimited cheap energy in the future.

 

[Starcraftmazter]

1, North America is closer to oil independence than it has been since the 60's,

You mean gas right? It is nowhere near oil independence. If you are referring to shale than consider several things;

- Shale oil reserves have been drastically overestimated
- It is an environmentally catastrophic source of oil
- For every one barrel of oil used to convert shale to oil, you will get between 1 and 2 barrels back. A typical oilfield (doesn't have to be large) will give you back 100 barrels of oil for every 1 barrel of energy invested into it.

Shale oil is a pipedream.

2, Global Natural gas reserves has gone through the roof, and Natural gas has the ability to offset alot of oil usage.

Not really. And fracking is also a very environmentally dangerous process - one which also destroys mass quantities of farmland and aquifers used by farmland.

It is bound to be either banned or severely restricted in the near future.

3, For the fiirst time new nuclear plants are being approved in the US and many more around the world.

Those are all uranium nuclear power plants. Uranium nuclear is very dangerous - but even worse, uranium - that is, high grade uranium is one of the rarest substances on Earth. Our current uranium fission technology also sucks, and we can't even extract 1% of energy from uranium.

To be building uranium power plants at a time when uranium is running out is pure insanity and will not solve anything.

4, Vechicles and equipment are becoming more and more efficent, and switching to alternative sources of energy.

There is one economic principle you do not seem to understand. As things become more efficient, they are used more - overall energy consumption usually always goes up. This principle allies everywhere in economics and it is applicable to everything. History has proved it true time and time again.

5, Renewable energy is just at the beginning of it's development cycle, and this alone will stimulate the economy.

How will it do that when China is undercutting everyone as usual? I am all for renewable - but they are not magic. It would take massive amounts of investment and above all political will to make it work. This will never happen in Australia or the US, or most places. EU is the only place that is close to making the correct level of commitment, and unfortunately right now it's in no shape to do more.

No, this is something that should have been done 30 years ago, now it is too late.

6, Several future techs are under development that should be able to be deployed in about 20 years that will seriously alter the cost of energy.

Such as? The governments will always steal and hide it just as they always have. Nikola Tesla was probably the first human to invent a way to harness free energy 70 years ago, and yet today it still "doesn't exist". There will never be cheap, plentiful energy - because that would mean the rich bastards who run the world can't make much money off it.

For now, we are doing OK as far as energy is concerned, and in the future after a few little bumps energy will be plentiful and cheaper than it is today.

I fail to see how we are doing okey, the price of oil is dragging the world into recession and back every few years, our economic cycles are becoming sporadic, there is widespread social unrest in many poorer parts of the world where people cannot meet the rising costs of energy.

This is not OK at all.

1, it's only got to get to 4400 to be equal to the asx200 2000 level, and that was a level inflated by the tech boom.

I said inflation adjusted. Yr 2008 was also inflated by the credit bubble - esp the housing and commodity bubbles. They are still here today in large. Where do you think it will go as they collapse?

2, Heaps of ways to both grow and maintain your wealth are available to investors in todays market,

I didn't say there aren't, I said there aren't outside of markets.

3, you under estimate humans abilty to adapt and over come.

Define "adapt"? The immense social complexity we have is only a result of surplus energy. We are are very quickly running out of surplus energy. The only logical conclusion is the level of social complexity will significantly drop. This has nothing to do with adapting.

Why do we want to replace nuclear, It's pretty much the best alternative to fossil fuels we have. and with a few adjustments to the way we apply it, it will become an infinate supply,

Because all current nuclear technology is based on uranium fission. Like I have already said - uranium is extremely scare. The yields on uranium mines have dropped significantly since it was discovered. High grade uranium used in power plants is even more rare. Uranium is simply not feasible for the future.

This is apart from the fact that it is inherently extremely dangerous (as Fukushima proves) and there is no viable means of storing nuclear waste for as long as it is radioactive. Most nuclear reactors in the US have lots and lots of spent nuclear rods stored at the plants. This alone is very hazardous.

What the world should be doing is researching into thorium nuclear fission. It is self-controlling and nothing can ever go wrong, produces much less hazardous waste which is radioactive for much longer.

Most importantly, there is enough thorium fuel to last for a very very long time.

Unfortunately, the same thing is happening as it has to every single other energy - private companies have massively lobbied governments not to pursue it. In fact the only country that is pursuing it, is China. Just another thing to buy from them...if they sell it to us and we agree to buy it...

He is just one of the future possible ideas that will create unlimited cheap energy in the future.

I hear uranium, I am instantly sceptical. Everything they are doing is extremely unnecessary - thorium nuclear is a proven technology which is far more mature, someone simply needs to make it work and design the big reactors that would generate massive enough amounts of energy. Instead they are pissing away time and money on a scare fuel which is being depleted as we speak. In fact he said 40 years? There will be virtually no uranium of a high enough grade left in the world in 40 years. Just another way for big corporations to hide the truly good sources of energy and throw bull**** in our faces.

Bill Gates is part of the 1% last time I checked isn't he?


But even that, that does not address the issue of how we are going to power cars, trucks, ships and planes. Not to mention where we get the oil and phosphorous necessary for fertilisers.

Buddy, the amount of crap the world is in is beyond belief.

Feel free...
http://www.youtube.com/watch?v=XnXZzx9pAmQ

 

[Tysonboss1]

I said inflation adjusted. Yr 2008 was also inflated by the credit bubble - esp the housing and commodity bubbles. They are still here today in large. Where do you think it will go as they collapse?



[

I disaggree with you on pretty much all of your energy points, so we will have to aggree to disaggree.

I do think you are in danger of crippling your financel position through being an over the top pessimist.

In regards to the above point,

In inflation adjusted terms feb 2000 asx 200 is worth 4400, it's only just under that level now, and it is at a low point, asx 200 in 2000 had a degree of bubblyness from the tech boom, so the two are no really comparible,

Still if you had put your entire networth into the asx 200 in 2000, you would have protected from inflation, while also earning a sound dividend return, doesn't seem like a disaster investment to me.

Secondly, waiting until an established bull market is happening is a bit crazy to me, It gives the impression that you would buy because things have gone up ( when they are probably over priced and due for a correction) ans sell when things have dropped ( just when they are trading at relatively safe levels where price to assets and earning power is at very attractive levels)

 

[Tysonboss1]

Sorry, One final point on energy.

Uranium is not scarce, There are tonnes of it stored all round the world in cooling ponds and dry casking.

The terra power plant bill is backing will use the waste from conventional plants as it burns the 99% unranium content the traditional plants leave behind.

Also, Uranium can be filtered out of sea water for $150 per pound, which they are already doing on a small scale in japan,

So when you factor in the uranium still in the ground as reserves + the undiscovered sources + the waste already above ground + the stuff we can get from sea water It will last longer than the life of the sun. It is truely infinent source.

 

[Starcraftmazter]

In inflation adjusted terms feb 2000 asx 200 is worth 4400, it's only just under that level now, and it is at a low point, asx 200 in 2000 had a degree of bubblyness from the tech boom, so the to are no really comparible,

I actually cannot find an inflation adjusted graph for the asx200 for the life of me, so you may well be correct. Perhaps I meant the sp500 instead (which although is different from our market, there is an obvious and strong correlation).




In terms of bubbllyness as you put it, as I said....our market was again in a bubble (they all were) before the GFC, and to be honest they still are.

Still if you had put you entire networth into the asx 200 in 2000, you would have protected from inflation, while also earning a sound dividend return, doesn't seem like a disaster investment to me.

Sure, but that was the past - so it is no longer relevant.

Secondly, waiting until an extablished bull market is happening is a bit crazy to me, It gives the impression that you would buy because things have gone up ( when they are probably over priced and due for a correction) ans sell when things have dropped ( just when they are trading at relatively safe levels where price to assets and earning power is at very attractive levels)

I am not waiting for any sort of market, I trade very short term (usually days) because I do not believe we will ever have another bull market, so it is pointless to try and long-term invest.

Uranium is not scarce, There are tonnes of it stored all round the world in cooling ponds and dry casking.

I would encourage you to watch the Crash Course from the video I linked in my longer post above. The whole thing is only less than an hour.

The terra power plant bill is backing will use the waste from conventional plants as it burns the 99% unranium content the traditional plants leave behind.

Like I said, that is just a distraction. It is nothing more than a pointless waste of time. In 40 years when they say it will be done, there will not be much of a civilization left.

 

[Tysonboss1]

1, I actually cannot find an inflation adjusted graph for the asx200 for the life of me, so you may well be correct. Perhaps I meant the sp500 instead (which although is different from our market, there is an obvious and strong correlation).



2, In terms of bubbllyness as you put it, as I said....our market was again in a bubble (they all were) before the GFC, and to be honest they still are.



3, Sure, but that was the past - so it is no longer relevant.



4, I am not waiting for any sort of market, I trade very short term (usually days) because I do not believe we will ever have another bull market, so it is pointless to try and long-term invest.



5, I would encourage you to watch the Crash Course from the video I linked in my longer post above. The whole thing is only less than an hour.



6, Like I said, that is just a distraction. It is nothing more than a pointless waste of time. In 40 years when they say it will be done, there will not be much of a civilization left.

1, in feb 2000 the asx 2000 was about 3000, it's not overly hard to do the math.

2, yes they were in a bubble, hence the crash. now they are much lower, offcourse it is safer to buy a company at 10 times earnings than it is to buy that same company at 22 times earnings.

3, yes it was the past, back then most of the leading companies in the asx200 were trading at about 15 - 20 times earnings, now they are trading at 10 - 15 times earnings, So deploying money now would [probably have a better result than deploying in 2000.

4, well I don't believe buying sound businesses at rational prices is ever pointless, and I also don't believe human nature has changed suffiently enough to make a bull market impossible.

5, I have watched it a few times, the points he makes I completely understand, But after a lot of thought and study I have come to some slightly diferent conclusions.

6, well if you trully believe that then you have basically given up, I disaggree 100%. I believe in 40 years we will be living on balance alot better, More goods and services will be generated, better heath care, etc etc, The future is bright kin my opinion.

I am not saying there will not be speed bumps, but thats all there will be speed bumps.

 

[Starcraftmazter]

1, in feb 2000 the asx 2000 was about 3000, it's not overly hard to do the math.

2, yes they were in a bubble, hence the crash. now they are much lower, offcourse it is safer to buy a company at 10 times earnings than it is to buy that same company at 22 times earnings.

3, yes it was the past, back then most of the leading companies in the asx200 were trading at about 15 - 20 times earnings, now they are trading at 10 - 15 times earnings, So deploying money now would [probably have a better result than deploying in 2000.

4, well I don't believe buying sound businesses at rational prices is ever pointless, and I also don't believe human nature has changed suffiently enough to make a bull market impossible.

First of all, the ASX8 (4 biggest banks + 4 biggest miners) are responsible for 90% of the profit growth on the ASX200 and hence other companies are not even worthy of mention if you want to talk about bull and bear markets.

Second of all, what makes you think that companies are cheap at a certain amount of earnings estimates? What makes you think they will not go lower? With the retirement of baby boomers and massive amounts of capital outflow from our stock market, what makes you think prices will follow historic averages for certain earnings amounts?

Further, what makes you think earnings will not fall? How will miners make money once the commodities bubble bursts, and how will banks make money once the housing bubble bursts?

I see the asx tanking to 3000, 2000 and 1000. There will be no earnings growth, only contraction.

5, I have watched it a few times, the points he makes I completely understand, But after a lot of thought and study I have come to some slightly diferent conclusions.

6, well if you trully believe that then you have basically given up, I disaggree 100%. I believe in 40 years we will be living on balance alot better, More goods and services will be generated, better heath care, etc etc, The future is bright kin my opinion.

In 40 years we will run out of oil, coal, aluminium, titanium, prosperous, etc. At the same time, there will be 3 billion more humans on the planet and a far more unpredictable climate.

I just can not agree. At the crux of it all are worldwide corrupt governments, all controlled by the central banking cartel. It is not at all in their interests to improve yours or anyone else's life. Even if it was, it is not possible. The only thing that is in store for us is poverty, misery, mass starvation as a remote few live ever more luxurious lives printing money for themselves and draining everyone who does actual work.

 

[Timmy]

I just can not agree. At the crux of it all are worldwide corrupt governments, all controlled by the central banking cartel. It is not at all in their interests to improve yours or anyone else's life. Even if it was, it is not possible. The only thing that is in store for us is poverty, misery, mass starvation as a remote few live ever more luxurious lives printing money for themselves and draining everyone who does actual work.

There is a bull market in tinfoil hats.

 

[Timmy]

In 40 years we will run out of oil, coal, aluminium, titanium, prosperous, etc.

I <heart> typos.

 

[Starcraftmazter]

There is a bull market in tinfoil hats.

Sorry buddy, it's just a fact of life - he who prints money out of nothing has all the power.

 

[tinhat]

You can search for historic CPI data here:

http://www.rateinflation.com/consumer-price-index/australia-historical-cpi.php?form=auscpi

The current base year for the Australian CPI is 1989-90. So the calculations below will take the value of the All Ords (XAO) back to 1989/90 values). I've only got historical All Ords data available.

The All Ords peaked in Feb 2002 so I'll use that peak, which was 3443.9. Using the previous quarter CPI from Dec-01 (135.4) the adjusted value is 2543.500739. Fast forward to the close of the All Ords last Friday (which is almost exactly ten years on) at 4257.2 CPI adjusted using the Dec-11 CPI of 179.4 this comes out at 2373.021182

The difference is 170.48 (rounded) which works out to -6.7% of the Feb-02 high. So we can say that in real terms the All Ords has fallen 6.7% from its high of Feb-02 to last Friday.

I don't have data for the accumulated all ords but it would be interesting to work out the real return on the accumulated all ords.

 

[skyQuake]

You can search for historic CPI data here:

http://www.rateinflation.com/consumer-price-index/australia-historical-cpi.php?form=auscpi

The current base year for the Australian CPI is 1989-90. So the calculations below will take the value of the All Ords (XAO) back to 1989/90 values). I've only got historical All Ords data available.

The All Ords peaked in Feb 2002 so I'll use that peak, which was 3443.9. Using the previous quarter CPI from Dec-01 (135.4) the adjusted value is 2543.500739. Fast forward to the close of the All Ords last Friday (which is almost exactly ten years on) at 4257.2 CPI adjusted using the Dec-11 CPI of 179.4 this comes out at 2373.021182

The difference is 170.48 (rounded) which works out to -6.7% of the Feb-02 high. So we can say that in real terms the All Ords has fallen 6.7% from its high of Feb-02 to last Friday.

I don't have data for the accumulated all ords but it would be interesting to work out the real return on the accumulated all ords.

22nd Feb 2002 - XJO Accumulation 17268.9
17th Feb 2012 - XJO Accumulation 31970.9

85.1% over 10 years = 6.35% p.a. compounding

Certainly beat CPI growth.

 

[Tysonboss1]

1, Second of all, what makes you think that companies are cheap at a certain amount of earnings estimates?

2, What makes you think they will not go lower?

3, With the retirement of baby boomers and massive amounts of capital outflow from our stock market, what makes you think prices will follow historic averages for certain earnings amounts?

4, Further, what makes you think earnings will not fall? How will miners make money once the commodities bubble bursts, and how will banks make money once the housing bubble bursts?

5, I see the asx tanking to 3000, 2000 and 1000. There will be no earnings growth, only contraction.




5, In 40 years we will run out of oil, coal, aluminium, titanium, prosperous, etc. At the same time, there will be 3 billion more humans on the planet and a far more unpredictable climate.

6, I just can not agree. At the crux of it all are worldwide corrupt governments, all controlled by the central banking cartel. It is not at all in their interests to improve yours or anyone else's life. Even if it was, it is not possible. The only thing that is in store for us is poverty, misery, mass starvation as a remote few live ever more luxurious lives printing money for themselves and draining everyone who does actual work.

1, If I can buy a range of quality companies at 8 times earnings and I believe in aggrigate the earnings will keep pace with inflation then I can see this as being a good investment, offcourse over time the price will flucuate but most likly the prices will rise to a point that it is higher than 8 times earnings, If somthing is producing an inflation hedged return of 12.5% I see that a good thing.

2, They may, But I am of the opinion that if the economy just keeps ticking along the companies I own will continue earning sound returns and eventually the prices of the companies on the market will better reflect a higher earnings multiple.

3, Hell if they don't all the better, I don't personally see the baby boomer arguement being as powerful as sum think, But if it were and prices dropped to 5 or 2 times earnings that would be a wonderful thing, Offcourse as an investor I prefer lower prices.

4, earning may fall, hence why you should buy with a margin of safty, Miners and banks will contiune to be profitable, if the mining boom falters the miners may see a short set back and their return on equity drop from 40% back to say 15% still a profiable business to own.

5, And what do you base that on,

6, we didn't stop lighting our homes when whale oil became scarce, If you believe that you are basically saying our ability to innovate, recycle and find new sources has been pushed to it's full extent, I disaggree.

7, you have an entirely wrong view of the economy, the economy is not a cake where if I get rich you automatically have a smaller slice, It is more like candles where we use our own candle to light other peoples candles, with all the various businesses and people working generating products and services that get distributed and we are all better off, we will all get richer together of course some are richer than others, but on balance an average person today lives better than a king 500 years ago