When would you feel safe going back into the market?

[young-gun]

Yeah - I tend to agree - the new low won't be apparent until after it's climbed about 10% above it.

And given the US and China seems to be heading down, this might end up lower than March 2009.

The euro drama you would think should already be priced in. This sudden tank over the past week surely can't be due to this greece thing, it's old news imo, we all knew it was going to happen. It was inevitable spain was sure to follow, as will most of the euro nations.

I'd say this is the US stimulus wearing off, just as it did last time. Bernanke will be due to announce QE3 within a month.

And yes, much lower if it's allowed.

 

[StumpyPhantom]

The euro drama you would think should already be priced in. This sudden tank over the past week surely can't be due to this greece thing, it's old news imo, we all knew it was going to happen. It was inevitable spain was sure to follow, as will most of the euro nations.

I'd say this is the US stimulus wearing off, just as it did last time. Bernanke will be due to announce QE3 within a month.

And yes, much lower if it's allowed.

I'm not sure you can price in the 'contagion effect' in the euro. In GFC1, the contagion effect of the CDS-subprime phenomenon ended up freezing the movement of money, even if only temporarily, and a huge amount of economic activity came to a grinding halt.

Granted, the 'run on banks' appears a bit more finite, but the banks that go under will have multiplier effects given their debt linkages across the globe. And most governments will be sitting on the sidelines this time around.

So priced in or not, it seems like 10% upside benefit vs 60% downside risk from this point. If odds like these were offered at the races, I wouldn't be putting my money on a horse.

 

[young-gun]

I'm not sure you can price in the 'contagion effect' in the euro. In GFC1, the contagion effect of the CDS-subprime phenomenon ended up freezing the movement of money, even if only temporarily, and a huge amount of economic activity came to a grinding halt.

Granted, the 'run on banks' appears a bit more finite, but the banks that go under will have multiplier effects given their debt linkages across the globe. And most governments will be sitting on the sidelines this time around.

So priced in or not, it seems like 10% upside benefit vs 60% downside risk from this point. If odds like these were offered at the races, I wouldn't be putting my money on a horse.

unless you could bet on them falling over and not finishing?

I read today that CBA think the fallout will be minimal to greece collapsing. Would be curious to know what banks around the globe have actually done in preparation for it, and if they believe they would be able to contain the spread or if it's out of their hands altogether.

 

[Julia]

The euro drama you would think should already be priced in.

Add in Mike Smith from ANZ's comments today:

Eurozone breakup 'quite likely': ANZ's Smith
May 16, 2012

* Read later

Ads by Google
Could The Dollar Crash?

www.IFII.com/Hyper-Inflation

History Suggests It's Not Only Possible, But May Be Inevitable.

ANZ chief executive Mike Smith said the breakup of the eurozone was “quite likely” as countries in the region's south would have to decouple from the currency union in order to become competitive.

The comments by the senior Australian banker come as global markets continue to be rattled by the political uncertainty playing out in Greece.

A left-wing party opposed to the austerity pact is leading opinion polls after last week's elections failed to form a government. Fresh elections may take place in Greece on June 10 - at the earliest.
Advertisement: Story continues below

“The issues in Europe are going to be very difficult to manage and it's not clear what the answer will be,” Mr Smith said in an interview with Bloomberg television.

“On the one hand you need a proper transfer union, and that seems very difficult for the German voter to accept," he said. "Or countries in the south are going to have to become detached from the euro, because otherwise how can they ever become globally competitive,” he said.

“It is the uncertainty and the unknown that is creating a lack of confidence in the market”.

Read more: http://www.smh.com.au/business/euro...-anzs-smith-20120516-1yqaw.html#ixzz1vDgubMls

He followed this up by saying funding markets are freezing up.

Then you have the comments by Jacques Nasser of BHP suggesting the current government is making business conditions difficult and the announcement by whatever the Union is that they will have a week long strike on one of BHP's mines.

I don't believe the investing public has really grasped the reality of the Europe situation and therefore doubt it has already been priced in as you suggest.
I might be quite wrong.

The fear induced by the GFC has never really gone away so confidence is low.
I wouldn't be expecting any sort of bounce in the near future and was stopped out of my last holding today.

But then I'm always pessimistic.

 

[So_Cynical]

When would you feel safe going back into the market?

I never left.

I've been "in the market" since mid 2007 and thru the ups and downs i have followed a simple strategy of selling shares for more than i paid for them...sometimes that takes days, sometimes weeks, often months and occasionally years.

My portfolio grown since 2009 has averaged around 25% PA...and i have achieved this largely (i believe) because i stayed "in the market" set goals and sold ONLY when appropriate.

But .. to each their own.

 

[StumpyPhantom]

I never left.

I've been "in the market" since mid 2007 and thru the ups and downs i have followed a simple strategy of selling shares for more than i paid for them...sometimes that takes days, sometimes weeks, often months and occasionally years.

My portfolio grown since 2009 has averaged around 25% PA...and i have achieved this largely (i believe) because i stayed "in the market" set goals and sold ONLY when appropriate.

But .. to each their own.

Simple definitely is best. That's easier said that done, because it requires cold objectivity. It's hard to sell when you're ahead (thinking the trend might be your friend) and probably even harder to sell when you're down.

I'm looking long and hard at LNC (68c) and DTL ($1.10) right now, despite more headwinds to come.

Anyone looking at anything else?

 

[Muschu]

I never left.

I've been "in the market" since mid 2007 and thru the ups and downs i have followed a simple strategy of selling shares for more than i paid for them...sometimes that takes days, sometimes weeks, often months and occasionally years.

My portfolio grown since 2009 has averaged around 25% PA...and i have achieved this largely (i believe) because i stayed "in the market" set goals and sold ONLY when appropriate.

But .. to each their own.

Yep..not for me SC. What goes down must go up?

Julia - if you care to explain - how do you set your stop losses?

 

[ROE]

it is always a safe time to move in the market if you understand the business and has reasonable confident of its prospect and the market sell it to you cheap ..

Value, Size and your position in a certain business is all that matters

Use fear to your advantage, some value show up today in stocks I like, when Greece default it will be Bargain Galore ...

 

[So_Cynical]

it is always a safe time to move in the market if you understand the business and has reasonable confident of its prospect and the market sell it to you cheap ..

Value, Size and your position in a certain business is all that matters

Use fear to your advantage, some value show up today in stocks I like, when Greece default it will be Bargain Galore ...

The traders often talk about having an edge .. fear is an edge as long as its you taking advantage of someone else's fear.

Today i was looking at my portfolio of 22 stocks thinking, what can i sell so that i can free up some cash to take advantage of this fear...and surprise surprise i have 5 stocks sitting within 10% of there 12 month highs, or all time highs...stocks that haven't really fallen much in the last 3 weeks, stocks still in substantial profit.

I'm thinking of selling big winners to buy other peoples losers, or at least manifestations of their fear....if manifestations is the right word. :dunno:

 

[Julia]

Julia - if you care to explain - how do you set your stop losses?

Rick, I've been in cash since soon after the start of the GFC with the exception of a very small holding (just 150 shares) in RIO which I left as an experiment with the buy and hold principle. This was essentially to prove to myself that it was absolutely inferior to the trend following approach.

I knew I could only let it run if just a small $ amount was at stake, but thought I could do it regardless of what the market did. Not so. When my loss went through 10% that was it. Sold.

Had I been more fully invested I'd absolutely not have allowed such a loss before getting out.

 

[StumpyPhantom]

+1

There's huge emotion involved in pressing "sell" to realiise a paper loss, esecially a large one.

 

[Sean K]

I'm waiting for confirmation the world doesn't end in Dec this year.

 

[odds-on]

The traders often talk about having an edge .. fear is an edge as long as its you taking advantage of someone else's fear:

Very good point. I think it is lost on most people though. As an investor you should find out what your advantage is and exploit it to maximise your returns. As for me, you win some, you lose some..... as long as the CAGR > 15%.

If there is a big crash, I sell my current holdings, buy a portfolio of a dozen stocks which have low debt, high ROC, recurring revenue etc. Then will not check my portfolio for a year!

 

[odds-on]

+1

There's huge emotion involved in pressing "sell" to realiise a paper loss, esecially a large one.

I actually find this easy after I read a book on trading. If you are wrong, you are wrong..............SELL!!!!!! The trick is before any purchase is to write down your sell criteria.

- business performance
- timeframe
- another opportunity
- stop loss (if you use them)
- share price has rocketed above my valuation.

 

[young-gun]

+1

There's huge emotion involved in pressing "sell" to realiise a paper loss, esecially a large one.

anyone who is trading on such emotions shouldnt be trading in the market. trading requries a plan, including entry points, exit points, how long you intend to be in the trade for and so on and so forth. this then needs to be coupled with up-to-date info of the global economy, so you can make day to day informed decisions and can reassess your positions. the days of fear and greed should be long gone, but it would appear not.

 

[Gundini]

Focus on knowing the values of businesses, and when you get a chance to buy indiviual shares at a price less than what a rational person would pay for the entire businesses, then buy some.

Excellent advise!

How long is a piece of string?


All I am waiting for at the minute is Gold @ 1400'S or Silver @ 20's and might start picking at a few other commodities shortly.

Still waiting...

I never left.


My portfolio grown since 2009 has averaged around 25% PA...and i have achieved this largely (i believe) because i stayed "in the market" set goals and sold ONLY when appropriate.

But .. to each their own.

I have a lot of respect for this, well done!

it is always a safe time to move in the market if you understand the business and has reasonable confident of its prospect and the market sell it to you cheap ..

Fantastic advice...

Personally, I have never been completely out of the market during the last few years, haven't lost much, haven't made much.... But I have been waiting for these times. While I don't mind trading, I prefer uptrending markets and I think those markets are just around the corner in both Gold and Indexes. Patience is something gradually earned over a lifetime.

 

[Ves]

it is always a safe time to move in the market if you understand the business and has reasonable confident of its prospect and the market sell it to you cheap ..

I agree. I think much safer than if the market was heading north rapidly.

 

[joea]

it is always a safe time to move in the market if you understand the business and has reasonable confident of its prospect and the market sell it to you cheap ..
.

I think you need to think about that statement a little more. concentrate on cheap.
joea

 

[young-gun]

Add in Mike Smith from ANZ's comments today:

He followed this up by saying funding markets are freezing up.

Then you have the comments by Jacques Nasser of BHP suggesting the current government is making business conditions difficult and the announcement by whatever the Union is that they will have a week long strike on one of BHP's mines.

I don't believe the investing public has really grasped the reality of the Europe situation and therefore doubt it has already been priced in as you suggest.
I might be quite wrong.

The fear induced by the GFC has never really gone away so confidence is low.
I wouldn't be expecting any sort of bounce in the near future and was stopped out of my last holding today.

But then I'm always pessimistic.

i wouldn't label it pessimistic, realistic perhaps.

 

[Julia]

If there is a big crash, I sell my current holdings, buy a portfolio of a dozen stocks which have low debt, high ROC, recurring revenue etc. Then will not check my portfolio for a year!

Are you serious? Regardless of what happens globally or locally, you will just ignore the effects on your p/f????

I actually find this easy after I read a book on trading. If you are wrong, you are wrong..............SELL!!!!!! The trick is before any purchase is to write down your sell criteria.

- business performance
- timeframe
- another opportunity
- stop loss (if you use them)
- share price has rocketed above my valuation.

I might be misunderstanding your meaning here but do you mean you would use the above criteria to continually re-evaluate your original decision? (That's how I'd interpret what you have said.)

If so, isn't that a direct contradiction of your first post above?