What shares would you buy in a market crash?

[burglar]

Wow very useful data, thx for the pics.

Although it's still not easy to interpret even with this diagram. Right now, are we still in the "Hesitant Uneven Recovery" stage or the "Strong Recovery" stage or the "Boom" stage? My guess would be the "Boom" stage...though it certainly doesn't feel like one

You sound "hesitant"!

 

[beachlife]

Those clocks are based on historical behaviour that doesnt include QE. The new clock needs Fed manipulation and build empty cities in China inserted somewhere.

 

[burglar]

Those clocks are based on historical behaviour that doesnt include QE. The new clock needs Fed manipulation and build empty cities in China inserted somewhere.

I would hesitatingly suggest that these things are built into the clock!

 

[galumay]

The clocks share the same fault as any other attempt to predict the future based on history.

 

[Craton]

@lawnmower79. What makes you think we are in a Boom? You've said it yourself doesn't feel like it.

@galumay. Broad statement you made there. Using history, to predict the future, may be flawed that is true as the future in inherently uncertain, with many variables and reactions to consider, especially when humans are in the picture.

It is, however, a starting point and a good guide to avoiding future, shall we say, mishaps.

 

[lawnmower79]

@lawnmower79. What makes you think we are in a Boom? You've said it yourself doesn't feel like it.

A couple of signs that made me think we're in a "Boom", although a fragile one:
Referring to the economic clock posted earlier in this thread we have:

- US stock market at all-time highs.
- Easier money through QE that's starting to end (maybe).
- US real estate price recovery
http://au.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index
- There are talks of some countries raising interest rates again. Turkey had to do it to protect the Lira from falling through the floor. Talks of the Reserve Bank of New Zealand possibly raising interest rates. http://www.cnbc.com/id/101375490
Talks of Australia stopping rate cuts and possibly switching to increasing interest rates sometime down the track this year following New Zealand's footsteps.

Based on the above, I believe the closest state in the cycle that we are in currently in is the "Boom" state. Commodities is a mixed bag as you've gotta separate industrial (eg. iron) into wealth preservation commodities (eg. gold). If I'm missing something to indicate otherwise please point it out.

 

[Valued]

Wont increasing interest rates bring down the price of stocks?

 

[RADO]

As title says a market crash happens like 08-09. What shares would you purchase?
Banks? Blue Chips?

We all seen what happened to CBA during and after crash in 08.

What are your picks?

Hmmm maybe GOLD....

 

[GlobeTrekker]

If/when the market crashes I'll be keeping an eye out for the larger 'safer' LICs (eg AFI, ARG, MLT, BKI etc) trading at big discounts to their NTA. When this happens after a market crash, you're effectively picking up parcels of already cheap blue chip stocks at an even bigger discount.

 

[Craton]

A couple of signs that made me think we're in a "Boom", although a fragile one:
Referring to the economic clock posted earlier in this thread we have:

- US stock market at all-time highs.
- Easier money through QE that's starting to end (maybe).
- US real estate price recovery
http://au.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index
- There are talks of some countries raising interest rates again. Turkey had to do it to protect the Lira from falling through the floor. Talks of the Reserve Bank of New Zealand possibly raising interest rates. http://www.cnbc.com/id/101375490
Talks of Australia stopping rate cuts and possibly switching to increasing interest rates sometime down the track this year following New Zealand's footsteps.

Based on the above, I believe the closest state in the cycle that we are in currently in is the "Boom" state. Commodities is a mixed bag as you've gotta separate industrial (eg. iron) into wealth preservation commodities (eg. gold). If I'm missing something to indicate otherwise please point it out.

Ok, nice wrap up but I don't read it that way LM79 and a quick google foo of world interest rates shows that, the majority of countries have lowered or kept rates on hold with only a handful raising. The market, especially the property market, may be indicating a boom state but isn't that from a low base? So to me (and I'm just a pleb) overall it's at 7~8pm at best.

These charts/pix of course are just guides and an astute observer would note that there are cycles within cycles and thus, act according to his or hers trading strategy.

I guess too that a Boom predisposes there's a Bust coming. Hmm...markets down a bit lately. Bottom trawling anyone?

 

[lawnmower79]

Ok, nice wrap up but I don't read it that way LM79 and a quick google foo of world interest rates shows that, the majority of countries have lowered or kept rates on hold with only a handful raising. The market, especially the property market, may be indicating a boom state but isn't that from a low base? So to me (and I'm just a pleb) overall it's at 7~8pm at best.

These charts/pix of course are just guides and an astute observer would note that there are cycles within cycles and thus, act according to his or hers trading strategy.

I guess too that a Boom predisposes there's a Bust coming. Hmm...markets down a bit lately. Bottom trawling anyone?

The problem is that, fundamentally, there's not a lot of reasons to believe the Aussie economy is improving. With the closure of Holden, unemployment figures have increased.
The RBA is not cutting interest rates down any further as per the announcement today: http://www.rba.gov.au/media-releases/2014/mr-14-01.html
Commodity prices have declined as China's demand have slumped, which does not help mining in Australia:
http://www.rba.gov.au/statistics/frequency/commodity-prices/2014/icp-0114.html

With mining slowing down in Australia and manufacturing hanging on by a thread, what reason is left for the ASX to spur itself into another bull run? Sorry for sounding pessimistic, but this is what we're facing at the moment. If I'm missing something or if someone can think of a good reason for a market booster, please let us know.

 

[Craton]

No need to be sorry LM79, agreed there's not much to be optimistic about although today's rally might bring some joy to day traders and bottom feeders.

Having said that, with interest rates being so low the never ending chase for higher yields will continue to drive equity and property markets up IMHO.

 

[Craton]

If/when the market crashes I'll be keeping an eye out for the larger 'safer' LICs (eg AFI, ARG, MLT, BKI etc) trading at big discounts to their NTA. When this happens after a market crash, you're effectively picking up parcels of already cheap blue chip stocks at an even bigger discount.

I like ya logic GT and agree totally. FWIW, what I like about LIC's is the distribution of (usually) fully franked div's!

 

[greggles]

Time to dust off this thread. When the fit finally hits the shan at some point before the end of 2021, what shares would you buy:

1. Firstly, to profit from the collapsing market.
2. Secondly, at the bottom of the market, the stocks that will recover the fastest after being oversold.

My instinct will be:

1. Unhedged gold miners with large reserves, lean operations and a very low AISC per oz. Unless the gold price collapses too.
2. Meat and potatoes stocks like WOW will probably recover quickly. People gotta eat. WES & CSL too.

 

[over9k]

Any country with a positive demographic profile.

(India, Mexico, USA)

 

[Greynomad99]

Time to dust off this thread. When the fit finally hits the shan at some point before the end of 2021, what shares would you buy:

1. Firstly, to profit from the collapsing market.
2. Secondly, at the bottom of the market, the stocks that will recover the fastest after being oversold.

My instinct will be:

1. Unhedged gold miners with large reserves, lean operations and a very low AISC per oz. Unless the gold price collapses too.
2. Meat and potatoes stocks like WOW will probably recover quickly. People gotta eat. WES & CSL too.

Unless you are shorting it is pretty hard to profit in a falling market. Some stocks still rise but those rises are usually restrained because they are swimming updtream against the general market trend. And, unless you are Nostradamus and know when the fall has bottomed, you are still catching falling knives.
Pretty much any good solid medium/large cap share will show good recovery when the tide turns, and those that fell the most (probably financials if it is a financial induced bear market) may perform best.
Things don't look too rosy for the market right now but I feel we're only looking at a potential correction (10% - 15% fall) not a bear market (20%+) - although anything is possible as rapid falls can get a life of their own (like the March 20 Covid fall). Whether we've started to journey into the abyss, I'd say 'probably'. We're coming off an all-time high at the top of my projected range and making lower weekly troughs and peaks on the XAO. That see-saw ever lower (assuming it continues) may see a soft landing.
Evergrande is seen as a potential catalyst for a market pullback, however, I'm not sure the Chinese government could bring themselves to turn their back on the company given the likely flow on effect - and perhaps a 'loss of face'. Needless to say I won't be running out to buy a heap of shares in the big iron ore miners any time soon.