What determines if the All Ords is up or down today?

[imaginator]

It seems that the media is setting the confidence or fear of the public every day.

See a few weeks ago, when the US rate rose, 1 week before on a day the fell tumbled "because of worries of rate rise". Then the next 2 days it shot up. Then 3 days before rate actually rose, the news said people were scared again. BUt 2 days before the rate rose, it went up. And on the day of the rate rise, it went up.

And in Australian side, when they announced rate could rise on Tuesday, stocks went up because USA went up. BUt on Wedmesday, even when USA went up, the news in Australia says "Australians panic over rate rise" right in the morning. It made the All Ords tumble.

Anyone agree with this?

 

[Knobby22]

Market commentators know as much as you or me.
Their reasons for why the market goes up and down are just guesses and fill.
The market is more complex than this.
They are commentators, so they have to say something.

 

[swingstar]

Traders determine it. Ask every single trader who participated today and you will have your answer. The underlying theme will be fear. Why is anyone's guess and the majority won't necessarily be related to any one occurence (like commentators will have you believe).

 

[Smurf1976]

IMO the market does whatever it wants then the media just picks an explanation which appears to fit with whatever the market did today.

If the market falls today then it was due to the inflation figures.

If the market went up then it was because some commodity became more valuable or perhaps John Howard's birthday.

If the market goes nowhere then it was because investors were undecided about what is going to happen in the middle east.

...

If I lose weight then my fitness plan, exercise etc must be working.

If I gain weight then just apply some seasonal adjustment, hedonics or whatever and it becomes a weight loss... And if there's still any gain then that's muscle not fat.

 

[imaginator]

but what is the 'thing' that traders fear?
The news of that day, which the traders know will affect public fear/greed of the market. Hence this morning's stupid news release that "Australians panic over rate rise and fuel rise", it makes trader weary becuase they know the puiblic will be selling today and not follow trader's footings to push the price up.
Australians panic? I didn't panic. I think "concerned" is a better word the stupid media

 

[Realist]

Maybe.... (bear with my rant for a moment)

Maybe the market and all shares and all investors and traders revolve around one thing.

A future PER of about 15 for each company listed.

Each company whether it is making a profit now or just struck gold, or is digging blindly for something, each company is worth their future earnings per year times about 15.

A company that is making fantastic earnings now with a poor outlook has a PER lower than 15 - because in the future people don't think it can make the PER of 15.

A company that has just struck gold is worth a PER of 15 times it's profit when they start selling their gold in 5 years time.

A company that is digging for anything but found nothing has a chance, a very small chance of finding something they can sell, and then they are worth about 15 times 1 years profit from that. Divided by the chance of actually finding anything - hence penny miners.

So overnight when gold goes up, interest rates go up, uranium mining is approved, war in middle east, oil goes down - it just changes peoples estiamates of companies future earnings..

I'm sure some genius could do a very good mathematical equation to work out what the ASX will do depending on all the factors.

Except one! Market sentiment - sometimes based on no facts at all people wear rose tinted glasses and buy ridiculous stocks for ridiculous prices, some times they hide in the corner ignoring absoulte bargains. And no-one can ever predict that. Peoples emotions can not be predicted and the market therefore can be estimated reasonably accurately but never exactly.

At the moment it seems people are a bit scared.

 

[redandgreen]

Maybe.... (bear with my rant for a moment)

Maybe the market and all shares and all investors and traders revolve around one thing.

A future PER of about 15 for each company listed.

Each company whether it is making a profit now or just struck gold, or is digging blindly for something, each company is worth their future earnings per year times about 15.

A company that is making fantastic earnings now with a poor outlook has a PER lower than 15 - because in the future people don't think it can make the PER of 15.

A company that has just struck gold is worth a PER of 15 times it's profit when they start selling their gold in 5 years time.

A company that is digging for anything but found nothing has a chance, a very small chance of finding something they can sell, and then they are worth about 15 times 1 years profit from that. Divided by the chance of actually finding anything - hence penny miners.

So overnight when gold goes up, interest rates go up, uranium mining is approved, war in middle east, oil goes down - it just changes peoples estiamates of companies future earnings..

I'm sure some genius could do a very good mathematical equation to work out what the ASX will do depending on all the factors.

Except one! Market sentiment - sometimes based on no facts at all people wear rose tinted glasses and buy ridiculous stocks for ridiculous prices, some times they hide in the corner ignoring absoulte bargains. And no-one can ever predict that. Peoples emotions can not be predicted and the market therefore can be estimated reasonably accurately but never exactly.

At the moment it seems people are a bit scared.

forgive me for asking but was CQT @44.5c as per your post on another thread an absolute bargain???

 

[Realist]

forgive me for asking but was CQT @44.5c as per your post on another thread an absolute bargain???

You are having a go at me for buying CQT?

why are you having a go at me?

I mean you posted this...

redandgreen Re: CDU - Cudeco Limited

likewise, I bought into today encouraged mainly by comments late last night by an analyst from Macquarie Bank on SKY NEWS that seemed to think that the drill results could easily see the price again @ $10
I was fully expecting that the shares would rally today.... they didn't so I decided to buy.

I'd rather buy a few more CQT (I bought most cheap on July 18) at 44.5 cents than CDU at $3.50.

Please explain why you are having a go at me about CQT? And why CDU is a better buy at $3.50 than CQT at 44.5 cents.

 

[redandgreen]

You are having a go at me for buying CQT?

why are you having a go at me?

I mean you posted this...

I am not having a go but yes I did buy CDU (not at $3.50 and I note you conveniently the deleted my complete post, a harmless punt, nothing more.
I have found your mindless "ramping" of certain stocks recently as reminiscent of the "ramping" that went on in the dotcom era.
You are purchasing on "momentum" nothing more and I say good luck to you.
If trading was that easy we would all be very, very rich...

 

[wayneL]

Maybe.... (bear with my rant for a moment)

Maybe the market and all shares and all investors and traders revolve around one thing.

A future PER of about 15 for each company listed.

Each company whether it is making a profit now or just struck gold, or is digging blindly for something, each company is worth their future earnings per year times about 15.

A company that is making fantastic earnings now with a poor outlook has a PER lower than 15 - because in the future people don't think it can make the PER of 15.

A company that has just struck gold is worth a PER of 15 times it's profit when they start selling their gold in 5 years time.

A company that is digging for anything but found nothing has a chance, a very small chance of finding something they can sell, and then they are worth about 15 times 1 years profit from that. Divided by the chance of actually finding anything - hence penny miners.

So overnight when gold goes up, interest rates go up, uranium mining is approved, war in middle east, oil goes down - it just changes peoples estiamates of companies future earnings..

I'm sure some genius could do a very good mathematical equation to work out what the ASX will do depending on all the factors.

Except one! Market sentiment - sometimes based on no facts at all people wear rose tinted glasses and buy ridiculous stocks for ridiculous prices, some times they hide in the corner ignoring absoulte bargains. And no-one can ever predict that. Peoples emotions can not be predicted and the market therefore can be estimated reasonably accurately but never exactly.

At the moment it seems people are a bit scared.

Furure PER 15??

I think investors should go do some hard thinking about what "value" is.

It ain't PER 15. That's quite expensive. No risk premium whatsoever.

Gimmmeeee 7-9 future PER I might be interested.

 

[Realist]

You are having a go at me for buying CQT?

why are you having a go at me?

I mean you posted this...

I am not having a go but yes I did buy CDU (not at $3.50 and I note you conveniently the deleted my complete post, a harmless punt, nothing more.
I have found your mindless "ramping" of certain stocks recently as reminiscent of the "ramping" that went on in the dotcom era.
You are purchasing on "momentum" nothing more and I say good luck to you.
If trading was that easy we would all be very, very rich...

Well I did ramp CQT I admit, not for self gain though, more for fun. I have more than 10 times the amount I have in CQT in BHP and RIO. No ramping there, I just sit and wait, don't even watch. am hoping for a special divvie from BHP soon!

I am willing to post what I buy on here, not to ramp it, people can criticise all they like - I hope they do, I'd rather be criticised and learn from my mistakes than lose money.

you seem against CQT - any reason??

Serious question : what is the difference in CQT and CDU in your eyes, not price difference but companies and results so far how do they compare?

Furure PER 15??

I think investors should go do some hard thinking about what "value" is.

It ain't PER 15. That's quite expensive. No risk premium whatsoever.

Gimmmeeee 7-9 future PER I might be interested

That is the point though Wayne, if you can buy a stock for a certain price that works out under a future PER of 15 you've done okay.

You need a margin of safety thoguh so you need to buy something at a certain price that your calculated future PER is well under 15 of course. 15 is a break even, leave your money in the bank scenario really. However a lot of companies don't even get to make a profit so a PER of 15 is not to be laughed at. The ASX average current PER is 15.8 from memory.

 

[redandgreen]

I prefer not to comment on either stock.
As far as both are concerned they are both interesting punts. nothing more nothing less.
It is impossible to get any idea of value or what is driving the momentum other than directors buying in CQT's case and drilling results in both that few can interpret,
I normally steer clear of these "opportunities" leaving them to the day traders.

 

[wayneL]

That is the point though Wayne, if you can buy a stock for a certain price that works out under a future PER of 15 you've done okay.

You need a margin of safety thoguh so you need to buy something at a certain price that your calculated future PER is well under 15 of course. 15 is a break even, leave your money in the bank scenario really. However a lot of companies don't even get to make a profit so a PER of 15 is not to be laughed at. The ASX average current PER is 15.8 from memory.

What happens when interest rates rise and/or growth rates fall? :batman:

15 won't look very reasonable at all

 

[Realist]

I prefer not to comment on either stock.
As far as both are concerned they are both interesting punts. nothing more nothing less.
It is impossible to get any idea of value or what is driving the momentum other than directors buying in CQT's case and drilling results in both that few can interpret,
I normally steer clear of these "opportunities" leaving them to the day traders.

I totally agree, both are complete punts really.

CQT's drilling results look good so far, But when they actually start producing a profit is a long way off and they do not have much money so the share price will be dilluted to buggery by the time they do make a profit I suspect - if a profit ever happens that is.

Still for a punt I think the odds are slightly better than other punts. I'll hold and hope simple as that. I'll risk losing some money in the hope this is a 5 to 10 bagger, the upside potential is good enough for me to hold. Unfortunately I did not buy many in the first place, so I decided instead of taking profits to pump even more money in at what I deem to be a reasonable price considering their results so far, it could be a stupid mistake or I could have a real winner, I'll wait and see (and pray).

 

[Knobby22]

Realist.

Plenty of stocks under 10. I suggest Symex sym 6.9 and Magna Pacific MPH 5.5. are OK buys. Both pay dividends too.

15 is only a good price if growth is very good.

 

[Realist]

What happens when interest rates rise and/or growth rates fall? :batman:

15 won't look very reasonable at all

Agreed.


But interest rates, inflation, growth rates etc. all average out over time to warrant a yield of 6% being just adequate.

If you can get much over 6% from a bank account then that is where you should have some of your money, the higher the interest return the greater proportion you should have there. This year you should have more in the bank and less in shares than last year.

 

[Realist]

Realist.

Plenty of stocks under 10. I suggest Symex sym 6.9 and Magna Pacific MPH 5.5. are OK buys. Both pay dividends too.

15 is only a good price if growth is very good.

Well I'm guessing SYM and MPH must have announced future earnings will be down? A profit warning or something.

So investors calculate future earnings against the current price and they value it less, so the current PER may be 5 or 10 but they are bargaining on future earnings being lower not higher.

Companies with good future earnings have a high current PER and companies with poor future earnings have a lower current PER. Again the pass mark is around 15.

Try and find a company with excellent future earnings prospects and a lowish current PER - you wont!!

 

[wayneL]

Try and find a company with excellent future earnings prospects and a lowish current PER - you wont!!

Not at the moment.

You will in the future... after all the shoe shine boys have been flushed from the market.

 

[Realist]

Actually both SYM and MPH have had recent profit downgrades.

Not at the moment.

You will in the future... after all the shoe shine boys have been flushed from the market

Correct, that will happen, and that is the time to buy of course.

 

[wayneL]

Actually both SYM and MPH have had recent profit downgrades.




Correct, that will happen, and that is the time to buy of course.

Yes indeed!

Meanwhile :hide:

(Just had to have an excuse to use that emoticon )