ASX crash? (#2)
- Thread starter Sunfish
- Start date
All i can say is that all this talk about creating australian positions based on where the US will be tonight is not investing, its not even trading (because your positions cant be monitored, a position has been taken in one market which subsequently closes when the other market opens).
Its gambling.
Its gambling.
No i am saying that i dont understand how trading positions in australian stocks can be made with reference to what is going to happen in the the US markets overnight. Given that the trends are down, and for a trader, the trend is ones friend. (unless one is going short)
And if one is taking investment positions (which i made a few today(friday)), then one should be focussing on the specific companies underlying fundamentals and not speculating on what the US will be doing overnight. (unless one is using a margin loan, in which case the focus has to also be on the LVR ratio with reference to the current volatility)
PS Bluecard if establishing trading positions, i suggest monitoring the AU$ movement, especially for resource stocks, for a trading position in the current environment, AU$ goes down, resources go down as well (even though from an investment perspective this doesnt make sense, as lower AU$ equals higher earnings)
G'morning Gentlemen. You should be in bed.
I'm not going to sit up, got some work to do tomorrow, but the DOW looks ominous. No place for amateurs I'm afraid, short is still the only side to be on.
haha
What i'm looking for is that feeling of capitulation.
We saw it come into the markets yesterday, but whether its the final capitulation i have no idea.
Lots of margin pressure selling occuring, and volumes are significantly higher.
Interestingly on the market lows today, the DOW, DAX, FTSE are all negative on a yoy basis.
This is good, also of false air being released that was hyped on QE2.
Yet earnings during this phase have gone up, at least for the US market, which is the main market i look at.
So overall this market correction has been a good thing.
(this does not mean that things cant get worse from here, only that price to valuation is starting to look better aligned).
Went softly softly into the market today, but the emphasis is on soft, no gung ho attitude from me in this environment, margin loan is low, so i'm comfortable, but more than prepared to sell (at a loss) if the environment requires it.
AU$ down, yes, it's down 6c in a few days. But given the weakness of the US still, I see that the dollar has been oversold, and we'll see it back to 1.08 in no time. So I think resources are a good buy.
As for the companies, I have been monitoring these for 6mths+, literally day in day out, so am well aware of the price points, and think they are a good buy at the current prices. All resource expect Macquarie, which I think was cheaper at 22.50 (so sitting on a 3.5% gain at this stage here). Will probably hold this back up to $26/27.
Maybe the strategy is not to your liking, but you can do all the technical analysis you like, and your share price can still drop with the market.
I just saying that the market has been oversold in panic.
But overall, I think we'll see a dummy rally for a while to 4500. But I'm calling the ASX down to 3200 eventually with all the global problems, so we'll see a few more drops and dummy rallies in between.
See, I'd never use a margin loan for shares. I only use money I can afford. Straight up cash only.
And by the way, the people who have not been watching the US and relying on just company fundamentals recently are the ones who have taken a bath in the market recently. Watch next week, the AllOrds will be back up to 4400.
What suckers got caught in the sucker rally after the US debt limit deal without understanding that it only means that the US will eventually be in a worse position of debt to GDP than now.
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US futures have gone from -0.8% to +1.5%. So I'll call a 2%+ rise on Monday for ASX.
Indeed, see how easy it is property investors. $12K+ in a couple of trading days. Better than $30K CG on a $300K property in 1yr.
is that all you made in cap-gains. I made over $60,000 in 4-5 mnths on one property between oct-09 and march 10. maybe you should stick to shares
Coffee and a doughnut.
is that all you made in cap-gains. I made over $60,000 in 4-5 mnths on one property between oct-09 and march 10. maybe you should stick to shares
What, in a FHOG fed mini-boom. What's it done since then. We all did well in property then. Just wait for the property correction now. I predict a 30% correction.
true PROPERTY investors dont worry about fluctuations . they accumulate assets. Im getting 6% return , almost neautral. when i retire it should be a nice little income stream, not to mension other assets which i dont intend selling either. THIS ISNT THE STOCK MARKET ( gambling )
true PROPERTY investors dont worry about fluctuations . they accumulate assets. Im getting 6% return , almost neautral. when i retire it should be a nice little income stream, not to mension other assets which i dont intend selling either. THIS ISNT THE STOCK MARKET ( gambling )
Don't get me wrong, I think property is good as well. We have 3 investments on 24%LVR now (so very positively geared), and intend to ramp it up to 8 properties in late 2013/early 2014 after property market has gone through it's correction.
But for now building up additional capital in the share market. Meanwhile the rental properties pays for 100% of the rent on the harbour. Rentals currently bring in $1050 a week. The rent right on the harbour is $600/wk. But we love it SO much here we'll stay and even pay $1000/wk rent eventually. Still cheaper than buying where we are.
250K of which 160K is in the share market now is just "play money" in a way.
Your 6% return, that's gross. Net your looking at maybe 4% max. Barely above inflation. So sit on your 6% return thinking in real terms you moving ahead to retirement. with little CG in the near future, and likely negative growth. I'm planning retirement in 2019 at 43.
See if you don't worry about property fluctuations when your property corrects 30% over the next 17mths.
So I see it as a good mixture of safe stable investment, with some short-term more risky "investment" for stronger gains.
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Ok now get your crystal ball out and tell me how this correction will happen with the cash rate falling to 4% and record property shortage
A credit squeeze. Because the world is heading into a double dip recession, banks will be fighting more and more for funds, and so will be very restrictive on the types of borrowers they have.
No more of the easy credit that has kept the markets up for the time being.
Your assuming a 4% cash rate, I'm not. I don't think the RBA will allow inflation to get out of control.
And really, IF it does fall to 4%, then the work would be in such a mess that property will be hit anyway. There is a lot less scope for stimulus packages now than there was during the GFC. It's the correction that Australia avoided with all the FHOG spending.
And I don't buy the "property shortage" spin either. All countries were pushing the same spin during the good times. Then the bottom fell out and suddenly all their "property shortages" turned into property surplus.
Having said all that, with the S&P downgrade of the US rating on Fri evening US time, the US markets may react and fall sharpy on Monday, or not?. Will be putting in some 8-10% stop losses, or otherwise hold if these are not hit. Take a $15K haircut and live to fight another day.
Anyway Intrinsic_Value, whether you invested by looking at the company fundamentals, or speculatively, a broad market sell down hits everyone equally.
Will be an interesting week. But while I see market rallies, and market falls, I believe we'll see the ASX at maybe 3200 by Nov 2012.
I think the market trajectory might be similar to 1929-1932 this time round again as well, as the world heading into GFC2 slowly.
Anyway Intrinsic_Value, whether you invested by looking at the company fundamentals, or speculatively, a broad market sell down hits everyone equally.
Will be an interesting week. But while I see market rallies, and market falls, I believe we'll see the ASX at maybe 3200 by Nov 2012.
I think the market trajectory might be similar to 1929-1932 this time round again as well, as the world heading into GFC2 slowly.
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So you reckon the rental yeild you pay your landlord will increase by 70% hey. And just when do you think that might be , 5yrs,7yrs, 10yrs. Do you reckon i should up my rent by the same % , or is everyone else screwed except for you and your happy landlord
No, just saying we love the place and area on the harbour so much, that if the rent rises to $1000/wk over the next say 7-8yrs, we'll still be here. Even if the landlord gets greedy, and spikes (as the building rents are higher in general). $600 is cheaper in the building for a 2br unit. Renovated 1br units rent for $700.
We got the unit in a quiet period, and had the landlord paint the whole unit as he had no other takers at the time.
$600-$1000 in 7-8yrs is maybe about a 8% rise each year.
The landlords gross yield is still about 3.5%.
No it doesnt. Thats the essential difference between investing and trading.
Trading involves making decisions around price. Price is the catalyst for action, pure and simple, there is no relationship back to value. A long position trading position is created if one believes price to go up. A short trading position is created if one believes price to go down.
Investing involves making decisions around value, around the productive capability of the underlying asset vs the pricing of that asset.
So, you reckon we're about May 1930?
What will the governments have learnt and do differntly this time? Hope they learnt ...
Yeah, on the way down again after a 60-70% rally. Maybe not as extreme overall as 1929-1932, but I think we'll see a few large dips, and then rallies.
We're already at 4150, and I think there is still a whole lot of events that will play out in the world over the coming 12-18mths. Spain and Italy bailout among them.
Not sure if governments learnt anything. Trying to dig your way out of a crisis caused by debt, by creating more debt obviously has not worked to-date. The US is again talking about QE3 (more printing of money). It's like bad Rambo sequels (maybe we'll get to QE7 as well) before everything bottoms out.
I don't think governments will do anything differently. Gillard will try and stimulate the economy more with spending, wasting more tax payer money because it just does not work. Australia's debt limit is now $250B, so Labor will spend, spend, spend, saying Australia still has the lowest debt to GDP ratio so it's all OK.
So once this market plunge levels out, we'll have a bit of a rally again. I think the next plunge will be caused by the need for either a Spain or Italy to be bailed out. I tossing over which one will be first, initially I though Spain, but now thinking maybe Italy first. Unlike Greece, Portugal, etc, you are now starting to talk about far larger economies. I think this will but a lot of pressure on France and Germany and some of the larger Italy and Spain debt holders.
And overall
So there is my crystal ball.
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