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The official "ASX is tanking!" panic thread

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No WPL there Abyss?
 
The conventional wisdom says to hang in there because the market always recovers. However with another GFC looming so hard on the heels of the last one without many tangible signs of recovery to previous levels it would be foolish to assume that recovery is inevitable.

Read Marcus Hadley's thoughts on this fantasy.


I am 100% liquid, and got out relatively unscathed The signs have been obvious for some time.

Read more: http://www.smh.com.au/money/countin...ally-stupid-20110909-1k1nt.html#ixzz1XVPAZEnr
 
My longterm view is this

CREDIT DEFAULT SWAPS

ARE the charged nuclear device in the financial world.
If say GREECE doesn't pay it's debt then those holding the debt will be called to make good the debt.----that's how Banks go broke---super quickly.

There are credit default swaps on most anything with a risk of default
From Mortgages to Govt debt.
It's so highly leveraged that there is 100s of Trillions covered 100s of times above any asset backing.

THE LOW AT 3100 IS IN
Govts now understand the risk of financial armegedon if a serious default occurs.
The collapse is like falling dominos
The task now is to wind the swaps down.
This will take years and in the meantime there will be swings between 3100 to 5000
Until this risk is gone.
It is very real and required World co operation to stem the default crisis in the US mortgage market.

I'm not expecting a long term up trend anytime in the next 3 yrs
Much of what we've had over the last 3 yrs!
 
I watched a bit of 'The Finance Corner' on ABC 24 this morning, I missed the start of it but caught the bit where a financial 'planner' was giving advice on what people should be doing in the current market.

His comment was that people should stay in the market and not worry as the market has ups and downs, he then went on to say "anyone selling out now is just realising a capital loss".

Good advice eh
 

Financial planners are the modern version of priests and parsons.

If you sin you go to hell.

If you sell you make a capital loss.

At least financial planners pay tax.

gg
 
tech/a said:
I'm not expecting a long term up trend anytime in the next 3 yrs
Much of what we've had over the last 3 yrs!
Click to expand...

hmmmmmm, is that 3 years or 30 years. Going to take a long time to shake all those credit default swaps from the trees.

Ciao
 
I hope we see a good rise in gold and silver this week.

If gold breaks 2K and silver breaks 50, i'm going to buy me a lobster for lunch.
 
This is an extract from an email I received from Elliott Wave International, interesting...

Wall Street and the money-management industry stay in business based on the assumption that "stocks are a good investment." They know the greatest threat they face is for most investors to reject that assumption.

That's why Wall Street "counterattacked" on all fronts as the August market declines unfolded. They enlisted willing help from the media. Going forward, there's no limit to what the industry will spend to make the public stick with the "stocks are a good investment" assumption.
 
Was the complete article doom and gloom or did they actually have a productive alternative in their view that is a good investment - or is this more con-theory?
 
LostMyShirt said:
Was the complete article doom and gloom or did they actually have a productive alternative in their view that is a good investment - or is this more con-theory?
Click to expand...

"Con-theory" would be confidently telling people that as long as they hold long term they will be fine (even if they are retiring in the next 10 years).
 
LostMyShirt said:
Was the complete article doom and gloom or did they actually have a productive alternative in their view that is a good investment - or is this more con-theory?
Click to expand...

I don't subscribe to their detailed reports but they have been criticised for having a negative view of the market.

The Bob Prechter basic theory is to recognise when to get out and stay out regardless of what the mass media/financial guru's are telling you, I don't believe that he is providing an alternative investment, just don't give back what you have gained with your current one.

To me the theory is commonsense, ie, stand aside when the market is falling.

The simple concept is that if a stock falls from $10 to $5 it has lost 50% of its value, but to get back to $10 requires a 100% increase in value.
Why lose the 50% ?
 
Good summary. I totally agree.

I can understand the difficulty, however, for those who haven't exited while their profits were intact and would now be facing significant losses if they sold.

Those losses could be double in a few months time, however.
 

They should learn how to hedge
The easiest is to short an index if Europe is weaker than Aus then short Dax or FTSE.
Take a longer view.
Roughly $ 50,000 worth of stock in one FTSE contract.

You can also sell part of your portfolio
 
I do agree - now I understand what is meant.

I would say it comes down to the experience and skill of the trader, in terms of entry/exit.
 
IFocus said:
No WPL there Abyss?
Click to expand...

I didnt quote WPL due to its SP suffering badly due to the cost overuns atm so hardly a guide for broader market sentiment.

FWIW i would say mid $26 but i wouldnt use this one as a guide or this upcoming market fall (which may not even happen).
 
Julia said:
I can understand the difficulty, however, for those who haven't exited while their profits were intact and would now be facing significant losses if they sold.

Those losses could be double in a few months time, however.
Click to expand...

Yes, an awkward situation Julia and as you say the risk is that it could get worse.

The thing that most of us keep banging on about is 'Do not get yourself in this situation in the first place'.

I gave back for the very same reason years ago, won't be getting caught like that again.
My only holding at the moment is PRR and that is on a short leash.
 
On Monday if the ASX is capitulating, like it did on Aug 9 - as I'm expecting it will - I'll be looking at picking up some bargains for the inevitable dead cat bounce. TVN, BHP, FGE, DTM, MRM spring to mind.

I'm hoping to see some proper capitulation though, big selling, big volumes - not that limp rubbish trading we saw 22 Aug or 6 Sept.
 

The big volumes will come on Tuesday when the next round of margin loan calls kick into the sell down. How brave do you feel that it will definitely bounce?
 
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