Why is our market so down?

[So_Cynical]

Volatility creating nervousness causing people too sell shares they really should hold onto.
People not entering the market because of volatility and uncertainty over shares that may or may not be affected by the sub prime fiasco.
Fear and greed rule the market up and down

Yep thats about it...well that and the margin call factor.

so many great stocks at great prices....easy money to make
cept im fully committed.

 

[tronic72]

I've had half my capital out of the Market recently and been buying in at prices that seemed "cheap as chips" only a few weeks ago. Todays trading saw my invested capital "slashed". Glad only half of it was in the Market!

I've been doing this for nearly 2 year and don't remember seeing a run of negative days like the last week. Even when the US or commodities are up we are still declining.

Has anyone HONESTLY predicted this much decline without ANY upside? I thought I was being cautious enough as I've been selling and buying back in but the upside just isn't happening.

 

[numbercruncher]

I cant understand how you guys can be so optimistic when major problems in International markets are unfolding before our very eyes

Some people dont even sound to be erring on the side of caution


This is the worst start to a trading year since 1971 according to bubblevision tonight.

 

[numbercruncher]

I've always been a long term investor, but I've now sold off more than half my portfolio. Will be happy to re-enter when it's all sorted but believe that will be some time from now.

Incidentally, re term deposit rates: I did some phoning around to check rates.
Then went into my ANZ Branch and was offered .5% more than quoted on the phone for the same amount/same term.

Pendulum says good move !


I read recently ANZ ceo was trying to bolster domestic deposits, not surprised they are offering a good rate !

 

[Julia]

I cant understand how you guys can be so optimistic when major problems in International markets are unfolding before our very eyes

Some people dont even sound to be erring on the side of caution


This is the worst start to a trading year since 1971 according to bubblevision tonight.

Yes. There seems to be a level of denial as to what's actually happening.

 

[MS+Tradesim]

Amen numbercruncher. I'm sounding like a broken record but in US recession their market falls by average 28% and we follow with average fall of 33%. It pays to be ultra-cautious right now.

 

[tronic72]

I don't see who's being optimistic????? Are you guys referring to this site in general or the market or the posters on this thread?

Sure there's some Longer term investors who are holding on but most traders seem to have started reducing weeks ago. (see my" jump ship" post), where myself and many other cautious ASF members was referred to as a Lemmings for selling.

 

[Real1ty]

I don't see who's being optimistic????? Are you guys referring to this site in general or the market or the posters on this thread?

Sure there's some Longer term investors who are holding on but most traders seem to have started reducing weeks ago. (see my" jump ship" post), where myself and many other cautious ASF members was referred to as a Lemmings for selling.

I would say you could find the answer to that question on this very page

I was one of those "lemmings" and it has saved me a lot of money and my Super is sitting in a nice safe place sleeping quietly.

 

[numbercruncher]

Hi Tronic,


I see loads of people being overly optimistic in this thread and on this site .....

example top of this page comment " easy money to make " - now thats wildly optimistic in my humble opinion, I have no idea what he's invested in but its still a massive call!

Another thread a guy says hes done alot of Dosh and unhappy about it, but was fully invested and fully margined, again wildly optimistic , arguably could be called Gambling ...

Loads of examples throughout site.

Anyway just saying what I noticed

Lets hope it doesnt get as bad as it potentially could !

 

[numbercruncher]

Amen numbercruncher. I'm sounding like a broken record but in US recession their market falls by average 28% and we follow with average fall of 33%. It pays to be ultra-cautious right now.

This is an important historical fact that MS has pointed out ....

And with more bullish economists saying 50/50 on US recession and Markets down 10pc (ish) , the downside potential seems to outweigh the upside potential from a simplistic standpoint.

 

[son of baglimit]

from my readings it appears many of the optimists have based their thoughts purely on how the resources sector will handle the current situation, and whether china can reduce the damage from a US recession.

problem is the resources sector, whilst important, isnt the only sector is the ASX. without doing the research, youd just about guarantee most of the remaining sectors have slid alarmingly, and for some time now, not 1 month, or 3, or 6, but for 12 months and over. it was the endless takeovers, and speculation, that created so much of the boom in 06/07, not just increased profits.

and its this point that made me move out of everything except 1 during the
1st half of 07.

have no optimists realised that the news of cash takeovers (cash sourced from various locations) has disappeared since august, and its only strong cash flow companies that will survive the upcoming mess ? and successful scrip takeovers will only come from those whos scrip is strong and backed by those same strong cashflows (ie BHP)

cash is king folks.

and a favour please.

is anyone with the right stuff able to create some form of listing which shows for example the ASX100 (excluding resources), with the 12 month high, current price, and the % difference ??

 

[Captain Haddock]

So it's not a good time for a noob like me to enter the market?

I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....

 

[tronic72]

So it's not a good time for a noob like me to enter the market?

I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....

Now is great time to get into the market as long as you don't use any leverage, what so ever. Don't go near CFDs, Margin Loans or options!!!

Will you be a trader or Investor?

There's some good value around at the moment if you are looking to invest. Trading is much more difficult at the moment because the market isn't making much sense at all.

 

[MS+Tradesim]

Captain Haddock,

This would be an ideal time for you to learn the nuts and bolts of trading such as risk management and money management, position sizing, stop losses, entries and exits, psychology etc

Leave your trading money in a high interest online savings accounts and spend time paper trading and educating yourself. If you don't already have an account with a broker, then grab a free membership on the ASX site where you can set up pretend portfolios. You can track your "shares" and decide on entries and exits and use a spreadsheet to log your results. Sure, it's not as "exciting" but if excitement is what you're after take up an extreme sport. But play your finances carefully until you can read the market in a basic way. Now isn't the time to commit money if you are a total newbie to shares. The worst thing that could happen to you is if your first few investments are profitable. The result will be a disproportionate sense of ability with far larger losses down the track.

 

[mfp]

So it's not a good time for a noob like me to enter the market?

I don't know whether to snap up some cheaper prices, or whether I'll just end up kissing my money goodbye if the US 'recession' deepens....

CH, my advice to you is to stay out completely and just watch (and learn as the previous post suggests) from the sidelines. IMO we have just entered a bear market, a quick look at a chart of the XAO will clearly show that since Oct it's been making lower highs and lower lows, unlike the previous 4 years. I find that many people are still in denial calling this another correction and some are still expecting our market to hit new highs by the end of 2008! The last bear market we had lasted 3 years, from early 2000 to early 2003, so I have a feeling that if you are a long term investor, you will be able to snap up many stocks a fair bit cheaper in months, maybe years, to come. I can tell you from experience that the beginning of a bear market is the absolute worst time for a newbie to be entering the market. And one other thing, don't try looking for the bottom of the bear market. It is a long, gruelling and agonising wait, especially if you are holding stocks, or even worse and topping up on the way down. You will only know the bottom is in place months after it occurs. Just my opinion, I by no means am an expert.

 

[Captain Haddock]

Now is great time to get into the market as long as you don't use any leverage, what so ever. Don't go near CFDs, Margin Loans or options!!!

Will you be a trader or Investor?

There's some good value around at the moment if you are looking to invest. Trading is much more difficult at the moment because the market isn't making much sense at all.

Well, intially I thought I'd be a trader. I discovered CFDs and thought YEAH BABY! But having done quite a bit of reading on the subject I don't think they're for me. Sure you can set up stop losses but the whole DMA issue and betting against your broker makes me a little nervous. I have a 9-5 job and won't be able to watch the market like a hawk. So, CFDs are out.

SO, now I think I'll be more of an investor, hoping to get some reasonable returns in 1-2 years. I'm still in my 20s so I guess I can take slightly more risk. I was looking at some mining/oil companies and contemplating putting some savings in. I am thinking about AED and OEL...but not sure yet. I'm flying solo, with no advice from a broker, so I will either suceed or fail on my own merits! Any advice gratefully received, I like trawling through this forum and reading what you guys have to say. Cheers

 

[Captain Haddock]

CH, my advice to you is to stay out completely and just watch (and learn as the previous post suggests) from the sidelines. IMO we have just entered a bear market, a quick look at a chart of the XAO will clearly show that since Oct it's been making lower highs and lower lows, unlike the previous 4 years. I find that many people are still in denial calling this another correction and some are still expecting our market to hit new highs by the end of 2008! The last bear market we had lasted 3 years, from early 2000 to early 2003, so I have a feeling that if you are a long term investor, you will be able to snap up many stocks a fair bit cheaper in months, maybe years, to come. I can tell you from experience that the beginning of a bear market is the absolute worst time for a newbie to be entering the market. And one other thing, don't try looking for the bottom of the bear market. It is a long, gruelling and agonising wait, especially if you are holding stocks, or even worse and topping up on the way down. You will only know the bottom is in place months after it occurs. Just my opinion, I by no means am an expert.

good points, will certainly take that on board. Thanks.

 

[mfp]

By the way, if you are a trader it's a lot harder making profitable trades in a bear market as the overall trend won't rescue you, unlike in a bull market, if you mistime your entry. Unless of course you're into "shorting".

 

[austek]

The market moved down over bad news initially, and that the rally since August was much too fast anyways.

So I guess the Financial Institutions that plunder our Aussie market will soon say enough is enough, and away we go again, but I suspect any upmove will be slower and more volatile than the August rally.

All we can do is sit there & profit from it. We do not have the funds to move it ourselves.

 

[skint]

By the way, if you are a trader it's a lot harder making profitable trades in a bear market as the overall trend won't rescue you, unlike in a bull market, if you mistime your entry. Unless of course you're into "shorting".

Valid point, but before you corrected the typo, "rescue" read as "re-sue". lol. Mistiming an entry point in a bear market is very much like being sued, again..and again. I took all my funds off the table a couple of months ago. I'm currently looking at stocks with good cashflow from gold and ideally with some FE interests (or other in vogue projects) to take advantage of any rebound. "Shorting" some stocks is an option, but this can also be a dicey game as no-one rings a bell to signify the bottom. Probably best for newcomers to avoid it. Timing..timing.