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Hi Fraa

Flipping the question – That's worth answering.

Market Pricing.
The index price channel doesn’t hold much significance to me – the channel moves depending on where you start the chart. Though a sustained excursion outside a channel starting when the A$ was floated would have me taking notice so would a sustained level below 2011 Lows.

Earnings.
I take much more notice of earnings – particularly the trend of earnings rather than just current or forecast earnings. I’m not too much concerned with the inflation component no matter what it does – because my measure of investment success is purchasing power (or what my real return is)

If the long term productivity component fell through the floor I would be bearish. I don’t see that happening – in fact I see some innovation starting to slowly come back into our economy after the mining boom and some dud leadership.

If the population component fell through the floor because of war, disease etc I would be bearish.

If the division of profits swung massively away from capital because we got a very socialist/communist style government I would be bearish.

If there was a major fiat monetary crisis AND we reverted to a physical monetary standard I would be bearish.

A property downturn wouldn’t really turn me bearish long term – we’ve had them, they are expected.
Between 1931 & 1951 property value to GDP more than halved. Peak to peak or trough to trough capital growth on the XAO over the same period was around 5%pa. plus whatever dividends were at the time. Peak (1929) to trough (1952) i.e. worst timing you could have managed was still 2.5%pa capital plus dividends.
I’ve avoided banks for some time, probably to my detriment because I think a property valuation downturn will hurt their profitability but I don’t really see a high probability of an economy destroying bust from the banks exploding under a property downturn. In fact the banks more vigorously looking for growth outside of low productivity existing residential property may be good for the economy as it would help facilitate some more productive risk taking.

The biggest thing that would turn me bearish is earnings above long term averages and high earnings multiples based on those elevated earning levels.

Observation not prediction of the long run economy is what would send me bearish.

Sorry no graphs to back up anything here – don’t have the data with me.

Cheers and Merry Christmas

<blockquote data-quote="craft" data-source="post: 893318" data-attributes="member: 16447">Hi Fraa Flipping the question<img src="https://www.aussiestockforums.com/styles/default/xenforo/smilies/thumbsup.png"&nbsp; class="smilie" loading="lazy" alt=":xyxthumbs" title="Thumbsup&nbsp; &nbsp; :xyxthumbs" data-shortname=":xyxthumbs" /> – That&#039;s worth answering.Market Pricing.The index price channel doesn’t hold much significance to me – the channel moves depending on where you start the chart.&nbsp; Though a sustained excursion outside a channel starting when the A$ was floated would have me taking notice so would a sustained level below 2011 Lows.Earnings.I take much more notice of earnings – particularly the trend of earnings rather than just current or forecast earnings.&nbsp; I’m not too much concerned with the inflation component no matter what it does – because my measure of investment success is purchasing power (or what my real return is) If the long term productivity component fell through the floor I would be bearish.&nbsp; I don’t see that happening – in fact I see some innovation starting to slowly come back into our economy after the mining boom and some dud leadership.If the population component fell through the floor because of war, disease etc I would be bearish.If the division of profits swung massively away from capital because we got a very socialist/communist style government I would be bearish.If there was a major fiat monetary crisis AND we reverted to a physical monetary standard I would be bearish.A property downturn wouldn’t really turn me bearish long term – we’ve had them, they are expected.Between 1931 &amp; 1951 property value to GDP more than halved. Peak to peak or trough to trough capital growth on the XAO over the same period was around 5%pa. plus whatever dividends were at the time. Peak (1929) to trough (1952) i.e. worst timing you could have managed was still 2.5%pa capital plus dividends.&nbsp;&nbsp; I’ve avoided banks for some time, probably to my detriment because I think a property valuation downturn will hurt their profitability but I don’t really see a high probability of an economy destroying bust from the banks exploding under a property downturn.&nbsp; In fact the banks more vigorously looking for growth outside of low productivity existing residential property may be good for the economy as it would help facilitate some more productive risk taking.The biggest thing that would turn me bearish is earnings above long term averages and high earnings multiples based on those elevated earning levels.Observation not prediction of the long run economy is what would send me bearish.Sorry no graphs to back up anything here – don’t have the data with me.Cheers and Merry Christmas</blockquote>

[QUOTE="craft, post: 893318, member: 16447"] Hi Fraa Flipping the question:xyxthumbs – That's worth answering. Market Pricing. The index price channel doesn’t hold much significance to me – the channel moves depending on where you start the chart. Though a sustained excursion outside a channel starting when the A$ was floated would have me taking notice so would a sustained level below 2011 Lows. Earnings. I take much more notice of earnings – particularly the trend of earnings rather than just current or forecast earnings. I’m not too much concerned with the inflation component no matter what it does – because my measure of investment success is purchasing power (or what my real return is) If the long term productivity component fell through the floor I would be bearish. I don’t see that happening – in fact I see some innovation starting to slowly come back into our economy after the mining boom and some dud leadership. If the population component fell through the floor because of war, disease etc I would be bearish. If the division of profits swung massively away from capital because we got a very socialist/communist style government I would be bearish. If there was a major fiat monetary crisis [B]AND[/B] we reverted to a physical monetary standard I would be bearish. A property downturn wouldn’t really turn me bearish long term – we’ve had them, they are expected. Between 1931 & 1951 property value to GDP more than halved. Peak to peak or trough to trough capital growth on the XAO over the same period was around 5%pa. plus whatever dividends were at the time. Peak (1929) to trough (1952) i.e. worst timing you could have managed was still 2.5%pa capital plus dividends. I’ve avoided banks for some time, probably to my detriment because I think a property valuation downturn will hurt their profitability but I don’t really see a high probability of an economy destroying bust from the banks exploding under a property downturn. In fact the banks more vigorously looking for growth outside of low productivity existing residential property may be good for the economy as it would help facilitate some more productive risk taking. The biggest thing that would turn me bearish is earnings above long term averages and high earnings multiples based on those elevated earning levels. Observation not prediction of the long run economy is what would send me bearish. Sorry no graphs to back up anything here – don’t have the data with me. Cheers and Merry Christmas [/QUOTE]

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