im calling bottom
- Thread starter boomtown
- Start date
Lethia, NAB is my initials, but it sounds like my girlfreinds, going up and down up and down all the time
as to where is a bottom, if you do the calcs (wont even get there..) but i would be of the belief, andywhere down to 5000pts or lower wouldnt be unreasonable, and asx between 3000 down to low 2000.
That is an opinion based, on some number crunching and thoughts on where money is travelling around in current climate. i would not like to predict this fragile market, but i do not see myself pouring funds in here any time soon.
That is an opinion based, on some number crunching and thoughts on where money is travelling around in current climate. i would not like to predict this fragile market, but i do not see myself pouring funds in here any time soon.
There are so many commentators out there with different views, at least one is likely to be right, its almost a mathematical certainty.
I cant remember the person, but there was a female analyst who 'correctly' predicted the 1987 crash and strongly advised all her clients to move into cash about a month before the crash. She became a celebratory almost over night. In fact she became so famous she started her own funds management business with a heap of 'fans' money.
The result......
she massively underperformed the S&P over the next 10odd yrs and ended up winding up the fund with significant long term underperformance.
Investors need to do their own research, if you blindly follow others you have only yourself to blame.
I disagree - if the ASX reaches mid to low 3000's I will be quite surprised.
There is no way it will breach 3000. Thats another 25% off todays close. Or 2500 would be another 37.5% off today. Prices now factor in a hell of a lot of bad news (i.e. severe recession). If they are factoring in that much bad news, you had better worry about your employment, real property prices plunging severely, etc.. as this would mean a very very large cut in profit estimates for the next few years, the result of which I dont need to explain. The governments will try to do whatever they can do before it reaches that point.
I read somewhere that during all recessions this century (about 6 or so) average earnings declines were about 16%.
Assuming an average earnings recession it would be arguable that a 40% fall in the ASX200 from 6700 to 4000 would factor in a lot of this scenario.
In short - if your calling 2000 - 3000 as a range, your calling a mega-recession.
Hey Trogdor
Good call, i agree... i do not mean for my commentary to sound flippany by anymeans.... however, i dont know who on here expected 100BPoints removed last week, nor Centro to be trading @ 6 cents this time last yr from $6... My point is saying this may happen, weather we have a recession or not is another story... 3000 square is 900 points we have consecutavly lost around 150 most days (bar tuesday) for a while now.
There will be a bottom, we wont know till we get back up again...
we will find out soon enough.
http://www.news.com.au/business/story/0,27753,24479252-31037,00.html
WALL Street shares plunged at the opening today amid a global stock meltdown, with the Dow industrials sliding 520 points or 6.0 per cent to 8058 points in the first five minutes.
But it soon recouped heavy losses from, with the Dow index trading up 35 points or 0.41 per cent at 1408 GMT (0108 AEDT Saturday).
WALL Street shares plunged at the opening today amid a global stock meltdown, with the Dow industrials sliding 520 points or 6.0 per cent to 8058 points in the first five minutes.
But it soon recouped heavy losses from, with the Dow index trading up 35 points or 0.41 per cent at 1408 GMT (0108 AEDT Saturday).
Its now down 3.23% at 8302.
Crazy, but I believe the PE multiples are much higher in the US. So there will be bigger earnings falls in the US (crappier economy than us), plus a bigger risk re-rating (i.e. market moving to lower multiples) - so longer term the Aussie market should do better.
This, however, isnt longer term, and we follow out of fear for now!!
Crazy, but I believe the PE multiples are much higher in the US. So there will be bigger earnings falls in the US (crappier economy than us), plus a bigger risk re-rating (i.e. market moving to lower multiples) - so longer term the Aussie market should do better.
This, however, isnt longer term, and we follow out of fear for now!!
There are so many commentators out there with different views, at least one is likely to be right, its almost a mathematical certainty.
I cant remember the person, but there was a female analyst who 'correctly' predicted the 1987 crash and strongly advised all her clients to move into cash about a month before the crash. She became a celebratory almost over night. In fact she became so famous she started her own funds management business with a heap of 'fans' money.
The result......
she massively underperformed the S&P over the next 10odd yrs and ended up winding up the fund with significant long term underperformance.
Investors need to do their own research, if you blindly follow others you have only yourself to blame.
Yes chilliaa, agreed, it's only somebody's opinion. This part of the quote that holds significance for me is this "In a panic, targets can get blown away. When markets make real bottoms, they fall hard." and has relevance to this post. I wouldn't like to be putting numbers on bottoms in the short term with whats happening at the moment. Another so called guru who picked the '87 crash was David Bowden who went on to do quite well in the years to follow. People should educate themselves rather than make rash decisions that way any credit or blame lays at their own feet and kudos to those who do well.
This isn't a dig at the original poster, I understand this is a tongue in cheek thread.
Cheers
Darren
Nathan, this doesn't make any sense to me.
For the asx to go below 3000, it would mean we were in a full blown recession, retail dead, massive job losses, resources worth bugger all, building companies going bust, farmers walking off the land, a 40c A$, etc, etc.
Yet here you are wanting to buy more property? What the
Why would you want more debt if things are going to be so bad?
If you think things are going so bad, surely cash is the go?
What's going on in your head?
See ya's.
Nathan, this doesn't make any sense to me.
For the asx to go below 3000, it would mean we were in a full blown recession, retail dead, massive job losses, resources worth bugger all, building companies going bust, farmers walking off the land, a 40c A$, etc, etc.
Yet here you are wanting to buy more property? What the
Why would you want more debt if things are going to be so bad?
If you think things are going so bad, surely cash is the go?
What's going on in your head?
See ya's.
I agree his predictions of asx are worrying, but having talked and talked and talked some more (with nathan) about the state of global economies our research shows that central banks are most likely to bail out economies through inflation. In which instance cash is the worst position to have. Especially hyper inflation. In high inflation instances it is better to have debt on assetts, as rent and currency inflates, debts deflate and those with more debt on assetts will usually get by better then those with no assets and erodishing cash.
To be more specific with MY situation; if monetary policy isn't successful, and I loose my job In a recession I don't necessarily think I will have any money to hold 1 property, let alone 4 or 8 (in nathans position). One would argue it's a kamikaze play.. I think I am playing the cards dealt to me
not necessarily,
Where we are today is because of fear in world markets and particularly the US. It does not mean that we are in a big recession nor that we are going to have 1.
Sure retail spending is down but that's because interest rates have gone through the roof and people don't have money for discretionary spending.
However, interest rates are coming down fast and from next month we will be able to spend more...
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Fear hasn't caused whats happening now, it's become reality.
Fear caused the 22nd January 2008 share dump. Fear of what the debt bubble could do. This dump has happened because the fears have become reality.
If it's all just fear, and totally unfounded, then the all ords starting with a 2 will have the banks with 10% fully franked dividends. [actually, for NAB and ANZ, it would be 13% divs] BHP and RIO with a pe of 4. The market is just not that dumb. Share investors aren't that dumb. The stockmarket has predicted events almost perfectly so far, and way ahead of the experts. First the banks plunged, then retail, then resources, all before it happened in reality.
So if people have less money for discretionary spending, how come they can still pay so much for houses?
However, interest rates are coming down fast and from next month we will be able to spend more...
Interest rates are coming down because we are going into recession, just like in the early 90's. Property then was flat for years, even with ever decreasing interest rates.
The plungeing Aussie dollar will more than counter the lower interest rates. The cost of everything is going up, especially food. The A$ is plunging because the rest of the world has worked out that without the resource boom we are in big trouble. Inflation is going up.
Australia has the worlds most expensive housing simply because we had such a strong economy. The share market says that the strong economy is no more, so what will now hold up house prices? Expensive housing is impossible without something to generate the wealth.
It's all just a cycle. We had 15 years of boom, now for a little bust. Those too highly geared and not able to pay will have to start over again.
See ya's.
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Link to chart: http://www.bloomberg.com/apps/data?pid=avimage&iid=isNtTDckj.pI
Source: http://www.bloomberg.com/apps/news?pid=20601109&sid=amX076XhpyXk&refer=home
Per my previous post - Im calling for the carnage to stop around the 7500 level rather than reaching 7000.
Nathan, this doesn't make any sense to me.
Yet here you are wanting to buy more property? What the
Why would you want more debt if things are going to be so bad?
If you think things are going so bad, surely cash is the go?
What's going on in your head?
I asked almost the identical question of an almost identical guy at work this week. Chap in his early 20s, lives at home, has 5 povo 'IPs'. The answer was that he hasn't got, and has never had, much cash. A few minutes talking to him showed clearly his mindset. Leverage has to bring riches because he deserves it by god! He deserves to be financially independent in a decade (he reckons that will be the peak of the next 'property cycle'
), and obviously hard work won't get him there (he admitted he really doesn't like working - loudly, where his supervisor could hear!), so gambling big has to pay off! The alternatives are unthinkable!Best case alternative: He has to work hard until a ripe old age and actually save money.
Worst case alternative: He has to work well into his 50s just to pay off the debts accumulated during his early ill-conceived gambling addiction.
See how it's just unthinkable that his course might not pay triple cherries or better? I wonder if Nathan has a similar dangerous mindset?
- - - - -
As for inflation - has anybody seen just how quickly liquidity is draining out of our financial systems? How fast capital and equity valuations are being marked down? We're talking trillions of dollars of 'money' that's gone bad already, and tens of trillions of dollars of bubble 'equity', and much more of both in the pipeline! Inflation is the very last thing I'm concerned about!
