Who's cashed up waiting for bottom to fall out in 2018?

[Darc Knight]

Some smart guy quoted in this series of interviews put the crash cycle at 15 years (last interview I think). So in 2023.

But as a sage advise from, I think, the former CEO of Lehman Brothers after the GFC... we gotta dance until the music stop.

===========
Very informative discussion on the fictionalisation of... everything... and how all these high finances destroy the underlining economy and its infrastructure rather than being the grease that smooth the transactions.

2023 thanks. Can't give me a date can you?

I thought the cycles ran 10-12 years, not 15? Can you see Australia lasting that long? Some young folk today don't even know what a recession is!

 

[galumay]

Can't give me a date can you?

I cant, because I am not very smart. What I can share with you is my belief that the timing of a crash is much less important than your emotional response to it.

 

[luutzu]

2023 thanks. Can't give me a date can you?

I thought the cycles ran 10-12 years, not 15? Can you see Australia lasting that long? Some young folk today don't even know what a recession is!

Sun Tzu says, able generals of old conquer by making no mistake. Making no mistake lie with oneself. The opportunity for victory lie with the enemy.

Hence the saying that one may know how to win but not being able to do it.

In other words, heads down, hang onto your cash... and only invest when the opportunity present itself. Do this during any part of the cycle, don't panic, and chances are you'll do alright.

As to being able to predict when the crash is likely to happen so that we can take further advantage during a fire sale... Personally I'd be stricter about what and where to put the cash right about now. i.e. Probably best not to buy things at what you reckon a "fair price" is; be patient and more demanding.

But that's just me and me following that rule have seen a couple of opportunities go. Namely CSL at the $90s a share not too long ago, and recently APO at the $4.20s.
i.e. don't take my thinking outloud as advice and such. They're worth about what I'm charging them for.

As to cashing out, I'm a bit luckier this time round, maybe, knock on wood.. in that two of my holdings are being taken over. Both have a good chance of a bidding war and the rising oil may mean a better price could be on the table soon enough.

If these two goes through and the cash is handed over, that's almost half my portfolio in cash.

Two other holdings might also be takeover targets. But that could be just me thinking too highly of them, who knows.

But if history is any guide, the last time I see this happening to my holdings, and seeing deals being done almost on a daily basis... I took the cash, can't find anything so parked it in blue chips like RIO and BHP... and ABC Learning centres. Will try to be smarter this time round.

 

[Smurf1976]

For purely personal reasons I've sold quite a lot of my share holdings in recent times.

Reason is simply moving house. Easier to buy the new one first and then sell the old one, thus removing any panic to physically move, and it seemed rational to cull lesser performing investments rather than borrow money and pay interest + bank fees + government duties on a mortgage.

So my interest in the market is reduced for a purely practical and personal reason. Beware though, I've got a bad history with this sort of thing.

Only time I've ever bought a brand new car, I placed the order on 10 March 2000. That was the day of the NASDAQ peak followed by an outright crash.

Bought my current house with the contract signed in October 2007 just days before what is still the all time high for the ASX.

So beware if Smurf makes a major purchase. FWIW I'm looking at houses starting next weekend.

 

[galumay]

So beware if Smurf makes a major purchase.

Duly noted. Makes more sense than economists or squiggly lines.
I am all cash on Friday.

 

[Wysiwyg]

So beware if Smurf makes a major purchase. FWIW I'm looking at houses starting next weekend.

Please let us know when you sign the contract of sale. However I think pre-empting will make something not happen. The pattern breaks down because of the knowing.

 

[Mr Bear]

Wilson Asset Management who I highly respect ( I have little respect for most money managers) are currently holding at least 30% cash in some of their portfolios.

Personally I don’t like moving to cash but I do like to remove exposure. I know my portfolio will outperform the asx200 so instead of moving to cash I sell futures to remove exposure while I receive the active return only. At the top of most cycles with high interests rates you are getting paid to hold this short, at the moment you are effectively paying for this position.

The way I hedge or leverage my portfolio is to identify fair value for the market (doesn’t need to be precise) anywhere below that I want to start leveraging.

For the hedge it’s incremental as well, I start to reduce exposure around 15-20% above fair value.. as my portfolio outperforms the hedge over time the hedge becomes smaller. At Friday’s close my short has reduced my exposure by 11%.

 

[jesser]

Psssh. I've been following the markets and investing since the late 90s. Every year there are people, groups and governments predicting this year will see the big crash. Some years it gets a little noisier.

For example, in 2016, Robert Kiyosaki (of "Rich Dad" fame) was adamant of the big crash. He had all these great reasons. It never happened, of course. In 2017, he still said it was going to happen. It didn't.

https://www.marketwatch.com/story/r...lapse-he-foresaw-in-2002-is-coming-2016-03-23
https://www.marketwatch.com/story/r...up-on-his-dismal-market-prediction-2017-02-28

Very few people foresaw the GFC, and of those that did, very few made money on it. Some people just got the timing wrong.

So every year, new sites pop up predicting this is the year. It's all "run to gold!"... "sell all your property!"... etc. Even during the GFC they were certain it's only going to get a lot worse. It didn't.

But one year, they're going to be right. Just which one?

 

[Movendi]

I think it'll be sooner rather than later. 9 years appears to be the average since 1926 for U.S S&P 500. Longest bull market 15.1 years from 1940's to 1960. https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d

Currently at 9.1 years. So we have less than 6 years for a probable crash to occur. I think it's unlikely that we would exceed 15 years.

 

[Craton]

Sell in May?
For me, I'm rarely fully invested as I like to have a minimum of 5~10% in dry powder to strike if/when opportunity beckons.

After a prolonged period of rising markets, one knows that the opposite will eventually come. Trying to time just when is the holy grail is it not?
Either a crash or a downturn, we go up in steps and down in elevators, what goes up must come down. Whatever the idiom, its the trading strategy employed that will be the decisive factor.
Those with a longer term view may hold through the ups and downs. Those with a shorter term view may already be skimming the cream off the top. Still comes down to one's trading/investment strategy and one's view of the accumulation/distribution cycle. My personal take is that there are opportunities in both bull and bear markets and not just in the financial arena.

 

[Darc Knight]

Are successful market timers like successful gamblers - a myth?

 

[Gringotts Bank]

Needs a 'catalyst', otherwise the Wall St analysts won't know what 'caused' it. Synchronicity ensures there will always be 'reasons' and omens around the same time. Market analysts like to have reasons which appeal to their logical minds. "The market fell because ...", then they look to fill the gap with whatever reasons might best fit the situation. The last thing you will hear them say is "The market fell because everyone decided to sell". That would be too simple, and then they risk their job.

You know when a flock of birds decides to move in a different direction and they all move? It just happens.

An obvious lower high often preceeds a big fall, but not always.

 

[Gringotts Bank]

Omens are useful. These are not reasons but suggestive symbolic events created by the collective unconscious. I was just on FB when I came across this by chance. So possibly we're near. Thought contagion happens qucikly in the modern age, due to social media.

https://www.nytimes.com/2018/05/22/us/politics/white-house-sinkhole.html

https://en.wikipedia.org/wiki/Behavioral_contagion

 

[Smurf1976]

Are successful market timers like successful gamblers - a myth?

Successful gamblers certainly do exist.

 

[Gringotts Bank]

Successful gamblers certainly do exist.

David Walsh & team. Joe Hacham. Two Aussies.

 

[Craton]

Are successful market timers like successful gamblers - a myth?

Success can be measured in different ways.
Pumping a red back into a one armed bandit and pulling out the same amount or more can be called successful.
Investing x$ at regular intervals means that a low point would have been picked at some time and thus, success.

Out and out picking an entry based on some arbitrary "bottom" doesn't really mean success either. A stock or market can still tumble when others are making headway.

On a macro level, I am in agreeance that the crowd mentality and/or some type of trigger being factors in how both individual stocks and markets perform/react. More so too, what the pro money is thinking and doing about it.
When will the market run out of puff is anyone's guess ATM but rest assured, it will happen. Whilst the status quo remains fairly much as is (this I seriously doubt due to the nature of the beast), I'll take a stab and say that rising interest rates will be the key trigger.
With any luck this time it will be an ordering decline not a plunge to the death as we've seen so often before. Ah, the dreams of mice and men...

 

[So_Cynical]

Are successful market timers like successful gamblers - a myth?

Successful gamblers certainly do exist.

And he has a museum in Tassie to prove it.

https://en.wikipedia.org/wiki/David_Walsh_(art_collector)

 

[Smurf1976]

And he has a museum in Tassie to prove it.

Indeed. Walshy is very much a household name in Tas - you'd be very hard pressed to find anyone in the state who doesn't know who he is.

He's generally held in high regard too by the way, even higher by those who "get" the reasons behind some of his doings over the years.

 

[Darc Knight]

And he has a museum in Tassie to prove it.

https://en.wikipedia.org/wiki/David_Walsh_(art_collector)

It says he made his money by developing a gambling system? The money didn't come from sales of the system did it? There are also subscriptions to market timers who will keep you "in the know", for a fee of course.
Not sure if I should be on here or at the Race track now

 

[luutzu]

Reuters report that global M&A in the year to yesterday topped $2Trillion.

The last couple of times it got close to this mark was in 2000 and 2007.