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Will be in Cash 100% 12th July 2019

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Garpal Gumnut

Garpal Gumnut

Ross Island Hotel
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Technical analysis provides some rationality, in relation to market action.

Fundamental analysis is useless.

I cannot see the ASX which is where a significant amount of my funds rested advancing beyond 6400.

Thus by the end of this week I will totally in cash.

I may even buy myself an ice-cream.

gg
 
Garpal Gumnut said:
Fundamental analysis is useless.
Click to expand...

Good luck with that, although I disagree, (that fundamental analysis is useless)

Do you have any particular plan for monitoring your position to see whether you end up out perform the index (dividends included), by holding cash?
 
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Check out this video, it’s discusses both sides of the coin of the current situation, but basically warren believes that as long as the current low interest rate environment exists, shares are “ridiculously cheap”.

The global markets will of course be an interesting movie to watch, but I don’t think either the length of the movie, or it’s ending is as clear cut as you seem to think.

 
?????? again i do not understand a post ..... i gotta get a new hobby.
the asx (all ords) is already above 6400 (closed at 6777). GG did u mean something else?
 
With interest rates falling and stimulus money flowing, I can't see where else to put my money, other than the market.
Financial stocks haven't recovered since the Royal Commission, minerals other than iron ore, are still at rock bottom yet there is an ever increasing demand for battery related resources.
GDP 1995-96 $647,660m, 2005-06 $940,747, 2018 $1,418,280
ASX is back to what it was in 2006?
The papers are screaming recession, but what is that old saying about, "when everyone is heading for the exits"?
Just my thoughts.
 
I also couldn't fully understand. Perhaps GG means that it's at near 6800, about the same level that peaked before the GFC. Perhaps this is the fear factor, maybe a double top type scenario on the monthly/yearly charts ?

I don't know what's going to happen but I am heavyweight in cash and sick in the stomach with the puny interest I am receiving near 1% per whole darn annum ! Rates have been going down...down... to the lowest level mankind has experienced and there is no recovery in sight. So this is a new world we are living in where the theme is clear from the central banks: "punish the savers and reward the borrowers". I am just waiting for the trend to continue to the -ve interest rates so I will go few mil in debt, so that the banks can pay me on the amount borrowed !

I guess we have to adopt, so I am looking for ways to park my cash in safe (relatively in terms of stocks/ETF's), long term investments in my longer Medium/Longer Term Stock Portfolio. Doing a bit of research into fixed income/bonds/gold type of thing which I will be happy to hold through another GFC type scenario. Gold related would be a very small % as it is purely for wealth preservation and it's not income producing. So I prefer income producing assets that can withstand catastrophe scenarios, so I can hold through them and collect the income.

I also move in and out of stocks in the Speculative Stock Portfolio. But most are relatively smallish positions.

GG, a bit more information for such a drastic move on the 12th will be helpful.
 
aus_trader said:
Gold related would be a very small % as it is purely for wealth preservation and it's not income producing.
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If you traded it then gold is income producing (well, capital gains but that’s effectively the same).

If you’re only aiming to earn a few %
“interest” then you wouldn’t need to be a particularly great trader to get that so long as you can produce a some level of profit.

Just a thought.
 
Smurf1976 said:
If you traded it then gold is income producing (well, capital gains but that’s effectively the same).

If you’re only aiming to earn a few %
“interest” then you wouldn’t need to be a particularly great trader to get that so long as you can produce a some level of profit.

Just a thought.
Click to expand...
Good thoughts Smurf1976.

I haven't been able to find an effective way to trade the Gold price itself, my trading skills are not that good. However I have bought and sold gold stocks and that's something I can improve on for better returns. For example I have Perseus Mining Limited(PRU) in the spec. portfolio at the moment and before the downtrend fully kicked into gear had Aurelia Metals Ltd(AMI) in that portfolio.

In terms of fixed interest type of instruments, not looking for big yields. So you are right in saying aiming to earn a few %. Anything around the 5% would be great but will consider lower yields if the principal is very secure. So it's a balance between % yield and how safe the ETF/LIC/Bond is. I would like to lean towards the bond type instruments for the longer term holding because they are less likely to have the big market fluctuations experienced by Stock based ETF's. If the yield is 2 to 3% such as the case with most government bonds e.g. Aussie Govt. bonds, that's fine. It's still better than cash sitting at the "High interest saver" account in the bank. If the bond price falls, I can buy more at the lower price which will offer a higher yield.

I will target Aussie and perhaps some developing country bonds initially and will publicly display in the longer term portfolio once researched and bought. Will stay away from US govt. bonds. They have much higher govt. debt than Australian govt. so I'll let the PhD members of the forum decide if US can pay their debt back and ensure the principal invested in the bond is safe.
 
Recession is imminent - who genuinely thinks the ASX200 keeps going up with the first negative GDP quarter?
 
So_Cynical said:
Recession is imminent - who genuinely thinks the ASX200 keeps going up with the first negative GDP quarter?
Click to expand...
We just can't predict the turning point, so with the market go cautiously I guess. One of the reasons why I don't have a lot of exposure to the market at the moment i.e. lightweight in equities and heavyweight in cash. But also not totally out of the market either as GG is suggesting.
 
So_Cynical said:
Recession is imminent - who genuinely thinks the ASX200 keeps going up with the first negative GDP quarter?
Click to expand...

Interest rates are like gravity to share prices, if the gravity keeps being reduced, share prices will naturally float higher.

If term deposits are paying around 1%, but good company’s are earning 15%- 20% return on equity, you can bet people are going to pay multiples well above book value.

Of course, if interest rates get back to 15%, it means a even a good company earning 15% isn’t more anything above book value.
 
Smurf1976 said:
If you traded it then gold is income producing (well, capital gains but that’s effectively the same).

If you’re only aiming to earn a few %
“interest” then you wouldn’t need to be a particularly great trader to get that so long as you can produce a some level of profit.

Just a thought.
Click to expand...

Yeah, but then you are earning money by being a commodities trader, the asset itself isn’t actually producing “income”, and you are exposing yourself to additional risk of the commodity price falling, and there is no actual income to offset any price fall.
 
So_Cynical said:
Recession is imminent - who genuinely thinks the ASX200 keeps going up with the first negative GDP quarter?
Click to expand...

If we are in, or about to enter a genuine recession, the response to this could be even lower rates, and potentially more stimulus in the form of tax cuts or even QE.....stocks can move higher during a recession. It depends on the nature of the recession, and more importantly what is happening in global markets. :2twocents
 
I also just want to point out, I have no idea what share prices will do short term, picking where the fluctuations will take the market is not the game I am in.

My game is simply to be continually making investments into assets that are likely to give me a good return over time based on the income I derive from it and the asset price growth that comes about from retained earnings etc.

Whenever we make an investment, we are taking equity in an asset class, this equity will be valued differently from time to time based on interest rates and the expectations of the markets

My job is to simply keep buying equity when ever it makes sense to do so on a longterm basis.
 
aus_trader said:
I also couldn't fully understand. Perhaps GG means that it's at near 6800, about the same level that peaked before the GFC. Perhaps this is the fear factor, maybe a double top type scenario on the monthly/yearly charts ?

I don't know what's going to happen but I am heavyweight in cash and sick in the stomach with the puny interest I am receiving near 1% per whole darn annum ! Rates have been going down...down... to the lowest level mankind has experienced and there is no recovery in sight. So this is a new world we are living in where the theme is clear from the central banks: "punish the savers and reward the borrowers". I am just waiting for the trend to continue to the -ve interest rates so I will go few mil in debt, so that the banks can pay me on the amount borrowed !

I guess we have to adopt, so I am looking for ways to park my cash in safe (relatively in terms of stocks/ETF's), long term investments in my longer Medium/Longer Term Stock Portfolio. Doing a bit of research into fixed income/bonds/gold type of thing which I will be happy to hold through another GFC type scenario. Gold related would be a very small % as it is purely for wealth preservation and it's not income producing. So I prefer income producing assets that can withstand catastrophe scenarios, so I can hold through them and collect the income.

I also move in and out of stocks in the Speculative Stock Portfolio. But most are relatively smallish positions.

GG, a bit more information for such a drastic move on the 12th will be helpful.
Click to expand...


Sorry I meant 6800 on XAO.

Not 6400.

It's over 6800 atm.

I could be wrong.

Let's wait and see.

I can always re-enter if wrong.

gg
 
1. Interest rates are dropping so good for market.
2. Interest rates are dropping and everything is going slower so long term bad for market.

Maybe stay away from cyclicals but remain in market for now.
No one really knows where we are going, will Trump attack Iran, start trade war with Europe?

Boris Johnston isn't a worry for me.
His history is winning important positions then just keeping the status quo and achieving little. He is more about winning than changing the world.
 
kid hustlr said:
I'm ok with having views on the mkt but I can't fathom ever being 100% out. If you are bearish be 50/50 or something but in my experience the biggest risk to under performance is being too defensive.

Each to their own and manage your plan I guess
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That is always my approach to it kid, when worried move out of your shaky positions and fall back to the solid core. I am never 100% in or 100% out, I range from about 30% in to 70% in, as you say everyone manages their own plan.
Mine is allow for the worst, hope for the best.:xyxthumbs
 
Junior said:
If we are in, or about to enter a genuine recession, the response to this could be even lower rates, and potentially more stimulus in the form of tax cuts or even QE.....stocks can move higher during a recession. It depends on the nature of the recession, and more importantly what is happening in global markets. :2twocents
Click to expand...
Yes, I think those are good observations J.

But Garpal's comments have me thinking on it, that's for sure
 
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