Black Monday

[minimoke]

Hands up who was actually involved in 87, or the Dot Bomb, or GFC, and what lessons you learnt and will apply now if it unfolds again? I share my lessons every time I mention tightly managing capital, trading momentum and using the charts to monitor sentiment and pick exits and entries.
In '87 I was pretty well totally out of shares having sold them to buy property.

By 2000 (Dot bomb)i had got back into shares and doing nicely. But sold something like half to get into a property development. At this point my net assets were worth twice what they were in 87 and i was carrying a debt /asset ratio of 57%

By Aug 2007 (GFC) I was right out of shares. Sold them along with property development for another property opportunity. By 2008 net assets 7 times what they were in 87. Also for a short while carrying zero debt. Got back into shares in 2009, debt was 31% of assets. Net assets 8 times '87.

Beginning Feb 2018. Still had same shares which had increased 3.5 times in value. Net assets now 10 time '87. Debt ratio 15%

[limmy]

You've done very well.

In '87 I was pretty well totally out of shares having sold them to buy property.

By 2000 (Dot bomb)i had got back into shares and doing nicely. But sold something like half to get into a property development. At this point my net assets were worth twice what they were in 87 and i was carrying a debt /asset ratio of 57%

By Aug 2007 (GFC) I was right out of shares. Sold them along with property development for another property opportunity. By 2008 net assets 7 times what they were in 87. Also for a short while carrying zero debt. Got back into shares in 2009, debt was 31% of assets. Net assets 8 times '87.

Beginning Feb 2018. Still had same shares which had increased 3.5 times in value. Net assets now 10 time '87. Debt ratio 15%

[Valuegrowth]

As I said I expect bouts of volatility in this year not limited for stocks but also for other assets which include commodity. In my view correction should follow bouts of volatility. Those who have experiences will identify winners for 2018 as well. Investors will eye for value opportunities. Despite all type of market gyrations, some long term investors have outperformed the market by identifying multibagger companies in advance.

NZ market fared well when compare with DOW and other markets. Dow has rebounded somewhat. Those are short term events. Long term is different.

[iceman]

"If you had a chance to buy into a good company in your hometown … and you knew it was a good company and knew good people were running it, and you bought in at a fair price, you wouldn't want to get a quote every day."
Instead of frequently checking a stock's price, "you'd look to the earnings and dividends over the years as determining whether you made a good investment or not. And that's what people should do with stocks."

WARREN BUFFETT

[winner69]

"If you had a chance to buy into a good company in your hometown … and you knew it was a good company and knew good people were running it, and you bought in at a fair price, you wouldn't want to get a quote every day."
Instead of frequently checking a stock's price, "you'd look to the earnings and dividends over the years as determining whether you made a good investment or not. And that's what people should do with stocks."

WARREN BUFFETT

Totally agree

Just shows that we are essentially punters on Sharetrader rather than investors

I didn't look at stock prices much yesterday but had a good day on the TAB -- managed to back four winners (and one loser that fell over had to be put to sleep) and made heaps. Rosie Myers was in good form and that helped


A bit like the sharemarket in a lot of ways - punt on the winners and hope not too many companies fail and have faith in good leaders

[Valuegrowth]

I am constantly looking for strong balance sheet firms, low-debt and zero debt firms which can understand very well trading at a great discount to the market. They are the ones will end up with multibaggers in the mid and long term.

"If you had a chance to buy into a good company in your hometown … and you knew it was a good company and knew good people were running it, and you bought in at a fair price, you wouldn't want to get a quote every day."
Instead of frequently checking a stock's price, "you'd look to the earnings and dividends over the years as determining whether you made a good investment or not. And that's what people should do with stocks."

WARREN BUFFETT

[minimoke]

"If you had a chance to buy into a good company in your hometown … and you knew it was a good company and knew good people were running it, and you bought in at a fair price, you wouldn't want to get a quote every day."
Instead of frequently checking a stock's price, "you'd look to the earnings and dividends over the years as determining whether you made a good investment or not. And that's what people should do with stocks."

WARREN BUFFETT
Good local companies go bad. Cash gets tight and GST / PAYE not paid. Inventory mounts up. Accounts lady nicks the cash. I reckon it still pays to keep an eye on it.

[Cool Bear]

In '87 I was pretty well totally out of shares having sold them to buy property.

By 2000 (Dot bomb)i had got back into shares and doing nicely. But sold something like half to get into a property development. At this point my net assets were worth twice what they were in 87 and i was carrying a debt /asset ratio of 57%

By Aug 2007 (GFC) I was right out of shares. Sold them along with property development for another property opportunity. By 2008 net assets 7 times what they were in 87. Also for a short while carrying zero debt. Got back into shares in 2009, debt was 31% of assets. Net assets 8 times '87.

Beginning Feb 2018. Still had same shares which had increased 3.5 times in value. Net assets now 10 time '87. Debt ratio 15%
Wow. You are indeed a master at reading and timing the market!!

[Mickey]

Just cannot see any market volatility affecting my dividend income stream. If the stock market plummets, which I think is most unlikely, I will be once again presented with the best across-the-board buying opportunity I've had for a long time.

Good advice. I used this as an opportunity to rebalance my portfolio by selling off a couple of smaller holdings and to increase my holdings in another while the price was a bit softer. Based on buy prices, I've now got an average of 7.10% in dividend payments, which I'm happy with.

[minimoke]

Wow. You are indeed a master at reading and timing the market!!I cant claim that at all. Simply that different opportunities come up at different times and those were the choices / decisions made at the time. At times I have dodged bullets, a few years back with Pike River, the other day with Fletchers. But I built a new portfolio Nov 2017 and what happens - market crashes in Feb. Doesnt worry me though as not near stop losses.

[limmy]

So what were the determinating factors, mimimoke that made you exit the markets at the right time?

[Lewylewylewy]

I don't think the market has much further to fall. The reason i say this is that it's falling on sentiment, fundamentals are still good. The us will announce something to curb the fear. Also, take a look at the nzx index and also the dow jones index. Both had irrational exuberance starting around Nov (sentiment up), now they're just dropping back down to the levels prior to that (sentiment down). It will stop dropping soon, then it will level out and creep up towards earnings season.

Seriously, Google each index and draw a line averaging the years increase without the November boom. You'll see what i mean. I think it'll drop a little below the end of the average line to represent the fear sentiment then stop dropping.

Hopefully I'm not proven wrong because it's to late to be selling out and i plan to make some cash on the drop of this year.

[minimoke]

So what were the determinating factors, mimimoke that made you exit the markets at the right time?Hmm - there is no skill I'm afraid. For example.....

Back in the day my mates and i would lend each other money every payday and we'd buy a few more Equiticorp or Judgecorp or Brierley or gold corp. Great days. Just like the folks are having in the Cryptocurencies today. Anyhow, got home one morning after a slightly boozy night and copped a bit of grief from flatmate who owned the place. I go "bugger this - I'll buy my own. So I was heavily into Equiticorp at the time and put them on the block. Sold, bought house and a month or so late Equiticorp goes tits up along with everything else.

2000 was about thinking about a change in lifestyle. Property development came and numbers looked like good gain could be made. But I needed to fund it. So shares had to go on the block. Again not longer after the market looked a bit ugly.

If there is one lesson it might be to have an eye out for an opportunity and look at the numbers. Follow the numbers - they tend not to lie

[BlackPeter]

When the recession hit in 2009, can anybody remember how much % stocks in NZ fell - I'm a relative new investor of two months and I think I've started at the wrong time, especially if there will be another recession. In a space of less than a week, my profit went from 10% to 1.5%.

NZX50 went down from something like 4200 to 2500 - i.e. roughly 40% down.

[BlackPeter]

Still just blowing a bit of froth off the top, albeit big volatile swings this week, they're only just chinning the "correction" bar and far from a 'crash'. Interesting DOW 23860 has provided support twice, bounce once. If the 200 DMA breaks, current 22318, then likely fall all the way to a test of really strong long term support in the range 18500-18350.

Do the maths, for every 1000 points down in the DOW, what that means for the NZX, based on recent moves. Now look at the shares that you like and how they're affected, then finally decide whether riding out a Correction, a Crash or worse, a Bear is better than taking capital off the table and later on buying a whole lot more of the same share when the bottom is in.

Hands up who was actually involved in 87, or the Dot Bomb, or GFC, and what lessons you learnt and will apply now if it unfolds again? I share my lessons every time I mention tightly managing capital, trading momentum and using the charts to monitor sentiment and pick exits and entries.

Corrections are a fact of being in the market, riding out Crashes is optional, they are mean and can disproportionally affect shares held and doing nothing misses the leverage of selling and buying lower, but riding a Bear affects everything and can take years and years and years to recover from.

BAA

You are so right. The only problem is that it is so much easier to distinguish between corrections, crashes and bear markets with the benefit of hindsight.

If you sell too much too early, you can lose not just a lot of brokerage, but as well opportunity cost (for losing out the begin of the uptrend).

So - what to you think which of the three options it will be?

Just to clarify - I am not proposing to hold whatever comes, but people who are still holding shouldn't feel bad in my view.

Myself - I did increase my cash (some stop losses triggered) ... but still more than 80% invested (down from more than 90%). Do I believe this one is turning into a bear? Not really, but for sure it will pay to be careful.

[winner69]

In 2011 when there was a decent correction I was out of the country and mostly unaware of what was unfolding. All turned out OK

When the GFC of 2007/2008 impacted the markets I was essentially cashed up. The NZX had been weakening from beginning of the year and most of the shares I had at the time had stopped going up and had hit trailing stops and had already been disposed off. The few residual ones left the kennel in 2008

One of the shares that had stopped going up was FBU - what a trade though. Turned out a multi year trade all the way from $2 odd to $13 odd ....cool eh

In 2000 the NZX bypassed the dot com boom and was unaffected but did join the party when the world got excited again 2002. I never got tempted like by mates to these dot com wonders because I just that valuations were just stupid.

In 1987 I was fortunate that I recently bought a bigger house and didn’t have much in the market. Lost a little but not much

In the early 70s when the oil crisis stuffed the world and we had carless days and that sort of stuff I was too busy paying off a 27%pa mortgage to care too much about shares

My ‘investing’ strategy is clearly outlined at the beginning of a thread on investing in secular markets. It has stood the test of time and hopefully get me through this time.

[Lorne Ranger]

[QUOTE=BlackPeter;703282]You are so right. The only problem is that it is so much easier to distinguish between corrections, crashes and bear markets with the benefit of hindsight.

Yeah I sometimes feel, as a modest investor/trader, that Im almost certain to be one of the last to know when a real crash starts to happen. Big corporate traders have the share numbers to really move the market one way or another and the tools to tinker in real time - theres a sceptical part of me that suspects it's a mutual kind of agreement that keeps it all afloat and as soon as one major player starts selling out, the other major players follow and it's all over, and the smaller investor just gets sucked down with it. We're all just dancing on the edge of the abyss complaining about the view.

Whoa, fever dream. Too much sugar after 6

[Yoda]

9477
Down from +5 to-4% in the month .....

I am happy to have sold a. 1/3.
Happy to buy back when things settle, ora good opportunity arises but was keen to get some ERD, and didn't have any cash, so a good excuse to move things around .
Thanks to all for sharing opinions.

[kiora]

I concur with your experience MM.We all make our own luck(or not)

[Valuegrowth]

Another category to watch in global markets is late stage winners.

http://awealthofcommonsense.com/2017/12/stock-market-valuations-wont-predict-the-next-crash/

Stock Market Valuations Won’t Predict the Next Crash

https://www.investopedia.com/articles/trading/10/profit-without-predicting.asp

Profit without predicting the market



(https://www.cnbc.com/2018/01/18/this-is-a-gutsy-way-to-go-international--and-reap-huge-returns.html)

[Vaygor1]

Hi Vaygor1.

Just curious, if you never sell any shares, where do you get the new funds to take advantage of the new buying opportunities, or are they funds you have invested elsewhere?


Other sources of income (salary, dividends etc) plus cash reserves I'm guessing?

Hi Cricketfan and BDL.

Thanks for your interest.

Funds for buying opportunities come from Margin Lending (which for me has been the case for decades). The real answer to your joint questions is I have been a big margin lender since the late nineties. In recent years I largely stopped buying shares and have essentially used the dividends (in addition to living off and paying ML interest) to reduce my ML debt to currently 7 cents for each $1 in my share portfolio. That leaves a lot of margin to play with if the arśe falls out of the market.

Disc: I have never inherited (or been gifted) a cent from anyone, and I have never won lotto. i.e. I started from zero. Also, I am 49 and my house is now freehold.

The above is short on detail, and may raise more questions than it answers. I can divulge more if you are interested, but doing so at this stage kind of feels like boasting/skiting.

[dragonz]

Is there a set amount to invest to make margin lending viable. They have set costs dont they?

[Vaygor1]

Is there a set amount to invest to make margin lending viable. They have set costs dont they?

Not really.
There is an annual fee that is waived if you borrow enough (ie pay enough in interest) but I don't recall that fee being that much but I would need to check.
The interest rate charged (by ASB anyway) is based on the OCR + a margin. At the moment I think it is all up 6.5% p.a with monthly rests.
ie if you can borrow at 6.5% per annum and use the money to make 15%+ per annum, then the more you borrow, the more you make.
Of course it can go the other way if you get it wrong. The way I describe it is that borrowing money to buy shares (as opposed to not borrowing) will amplify the final result.

[Cricketfan]

Of course it can go the other way if you get it wrong. The way I describe it is that borrowing money to buy shares (as opposed to not borrowing) will amplify the final result.

I honestly don't know how people can sleep at night doing that! It's hard enough worrying about losing your own money, but at least if it happens I don't have to pay myself back!

[couta1]

I honestly don't know how people can sleep at night doing that! It's hard enough worrying about losing your own money, but at least if it happens I don't have to pay myself back! Yes, even borrowing money against the house could cause concern in a rising interest rate environment, depending on your level of gearing ,but margin lending is on a whole new level again.

[iceman]

I honestly don't know how people can sleep at night doing that! It's hard enough worrying about losing your own money, but at least if it happens I don't have to pay myself back!

No big deal is it. As Vaygor says, he owes 7% of his portfolio currently and even if it was up around 20-25%, I can't see it being a problem. Have done it myself on many occasions, albeit a different arrangement to Vaygor's. I borrow against "excess" equity in rental properties to invest in shares.

Have you ever had a mortgage on a house ? Did you sleep at night or did you stay awake worrying about its value dropping below your mortgage balance ? Myself, I can't really see the difference but of course, how high the gearing is, is the real issue with both types of investment.

[bull....]

way to go , i put a short on thurs morning ..... well overdue correction

outside bar on the weekly ? very telling

wasnt that outside bar very telling on what was to unfold this week.
im sitting here on sunday exhausted from all the hrs i put in this week ( expecting the same next week ) trading those wicked swings on wall street , was truly a experience except the part where my broker locked me out of trading during the flash crash bit earlier in the week ( i heard others had been as well think it was because liquidity dried up big time so maket makers halted the online traders for about 30 mins ? who knows but it was weird missed out adding some serous coin )

anyway doubt this is the end off the correction be ups and downs to come still as the vix still trades very high and we havent tested 3% on the 10yr yet ( that cause some serious fireworks if we get a sustained breakout as there heaps of stops above this level everyone watching ) anyway still expecting a monthly lower bar , its been so long time since we had one in my opinion? my opinion

[couta1]

No big deal is it. As Vaygor says, he owes 7% of his portfolio currently and even if it was up around 20-25%, I can't see it being a problem. Have done it myself on many occasions, albeit a different arrangement to Vaygor's. I borrow against "excess" equity in rental properties to invest in shares.

Have you ever had a mortgage on a house ? Did you sleep at night or did you stay awake worrying about its value dropping below your mortgage balance ? Myself, I can't really see the difference but of course, how high the gearing is, is the real issue with both types of investment. The difference between what you and I are doing is that no matter what happens to the market, we can't get a margin call, if the market crashes, good companies will still pay divvies which should more than cover our interest only mortgage repayments. All the bank cares about is that we continue to pay the interest on our loans, which is lower than the interest on a margin account(Mine is about 4.5%) although as you say, it depends on how high the gearing is, in the case of Vaygor 1, that gearing is very low and he has done very well.

[Jerry]

Looking at stocks that have dropped more than NZ50 (4.6%) since 12th Jan, I wonder why HBL is down 8.13%. Our interest rates are steady and not set to change.
Others that puzzle me are CNU (-7.1%) and EVO (-9.6%).
I presume currency variation-fears are responsible for ERD (-9.67%) and SKL (-8.3%).

[winner69]

Looking at stocks that have dropped more than NZ50 (4.6%) since 12th Jan, I wonder why HBL is down 8.13%. Our interest rates are steady and not set to change.
Others that puzzle me are CNU (-7.1%) and EVO (-9.6%).
I presume currency variation-fears are responsible for ERD (-9.67%) and SKL (-8.3%).

HBL was pretty expensive / over priced / high PE or how you want to describe it

In ‘volatile’ times over priced stocks tend to fall more

Can’t comment on the others .....esp EVO which is a bit doggy like to start with

[Vaygor1]

I honestly don't know how people can sleep at night doing that! It's hard enough worrying about losing your own money, but at least if it happens I don't have to pay myself back!


The difference between what [iceman] and I are doing is that no matter what happens to the market, we can't get a margin call, if the market crashes, good companies will still pay divvies which should more than cover our interest only mortgage repayments. All the bank cares about is that we continue to pay the interest on our loans, which is lower than the interest on a margin account(Mine is about 4.5%) although as you say, it depends on how high the gearing is, in the case of Vaygor 1, that gearing is very low and he has done very well.


It's an interesting topic/argument isn't it.
Had it not been for margin lending I would never have got to the position I'm in now.
Difference between a bank loan vs ML is you can't use the shares you've bought (using the loan) as security to buy even more.

As I type, RYM (for example) will need to drop from circa $10.50 per share to about $1.85 per share before I get a margin call.
If that happened, then I have a range of shares (not subject to margin lending and with volume) to sell and reduce my ML account to zero, but I'd probably just go to the bank at that point and borrow the amount required.

Then the dividend income stream continues... the bank loan (principal and interest) would get paid off all by itself just like the ML account is doing now... only small problems being the frequency of payment from dividends meeting the banks expectations and I would have to manage my cashflow more closely.

The reasons I keep my ML account (and pay an appreciably small amount more in interest) instead of getting a bank loan are:
* I currently live off the ML account for cashflow.
* I can take from it and add to it as-and-when I like, as often as I like.
* There is no mandatory regular payment required by the bank
* The incoming dividends as-and-when they arrive are more than adequate to keep the account under control, and with considerable headroom
* My current (comparatively) small borrowing off it is working well for me
* There is a substantial amount sitting there to borrow off immediately when buying opportunities present themselves.

So I sleep easy Cricketfan.
If one can borrow at 6.5% and consistency make 15%+ per annum out of it, then one could argue it would be bad business to not borrow.

Everyone's risk appetite is different and I understand, respect, and accept that.

Disc: The above is in NO WAY a push or plug for anyone to jump into margin lending with any provider out there.

[Valuegrowth]

Intelligent investors and money managers are focusing on value now. That may be reason for them to like some overseas stocks. There could be some window of opportunity after bouts of volatility and sell-off in global markets. Going forward value stocks should shine and volatility could be new normal in 2018. In my opinion this market sell-off isn't over yet. As I said, we should see bouts of volatility and sell-off for both stocks and commodities to take out heat from global markets. Finally, there going to be healthy correction in global markets. Speculators are also unwinding positions on various asset classes including risky asset classes to avoid further losses from their holdings. Algorithms trading also could make situation worse during market sell-off or volatility.

https://www.thebalance.com/how-to-research-stocks-and-choose-good-investments-4056941

How to Research Stocks and Choose Good Investments

Sell-off and markets volatility are also new normal. There had been sell-off in 2016 as well.

http://nbr.com/2016/01/08/keep-calm-and-carry-on-investing-in-a-sell-off/

Keep calm and carry on: Investing in a sell-off

https://nz.finance.yahoo.com/news/losing-retirement-password-solid-investment-advice-191259977.html

Losing your retirement password is solid investment advice

https://www.bellinghamwallace.co.nz/blog/what-does-a-strong-balance-sheet-look-like-why-is-it-important

WHAT DOES A STRONG BALANCE SHEET LOOK LIKE & WHY IS IT IMPORTANT?

[couta1]

Looking at stocks that have dropped more than NZ50 (4.6%) since 12th Jan, I wonder why HBL is down 8.13%. Our interest rates are steady and not set to change.
Others that puzzle me are CNU (-7.1%) and EVO (-9.6%).
I presume currency variation-fears are responsible for ERD (-9.67%) and SKL (-8.3%). I bought more CNU last week and find the % drop a bit odd for a core infrastructure stock with no profit downgrades, it hit a 52 wk low on Friday. On a pretty good PE as well.

[value_investor]

Expect some carnage tomorrow morning when Fletcher's trading halt is up and it takes the market down with it. Hopefully put some bargains out there as far as buying is concerned. There's a trend of a big dip at opening last week and as the day goes on the nzx50 recovers.

As an aside, I wonder how much the Fletcher announcement hinders peoples kiwisavers out there. I imagine quite a few fund managers are starry eyed about the company.

[couta1]

Expect some carnage tomorrow morning when Fletcher's trading halt is up and it takes the market down with it. Hopefully put some bargains out there as far as buying is concerned. There's a trend of a big dip at opening last week and as the day goes on the nzx50 recovers.

As an aside, I wonder how much the Fletcher announcement hinders peoples kiwisavers out there. I imagine quite a few fund managers are starry eyed about the company. Not sure I agree, with the US markets running positive last session,I doubt Fletcher's is going to create carnage across the market in the morning.

[winner69]

Not sure I agree, with the US markets running positive last session,I doubt Fletcher's is going to create carnage across the market in the morning.

Agree mate .... FBU is just a side attraction if it does start trading again. Rest of market will just go on it’s merry way

Fence all finished? Hope you got the paint from PlaceMakers — Fletcher’s need all help they can get eh .....but PlaceMakers doing pretty well they say.

PS — Above about the rest of the market not quiet true ...Metro Glass might pack a sad again ....esp if Fletcher’s mention that Alexandra Park job.

[Yoda]

Intelligent investors and money managers are focusing on value now. That may be reason for them to like some overseas stocks. There could be some window of opportunity after bouts of volatility and sell-off in global markets. Going forward value stocks should shine and volatility could be new normal in 2018. In my opinion this market sell-off isn't over yet. As I said, we should see bouts of volatility and sell-off for both stocks and commodities to take out heat from global markets. Finally, there going to be healthy correction in global markets. Speculators are also unwinding positions on various asset classes including risky asset classes to avoid further losses from their holdings. Algorithms trading also could make situation worse during market sell-off or volatility.

https://www.thebalance.com/how-to-research-stocks-and-choose-good-investments-4056941

How to Research Stocks and Choose Good Investments

Sell-off and markets volatility are also new normal. There had been sell-off in 2016 as well.

http://nbr.com/2016/01/08/keep-calm-and-carry-on-investing-in-a-sell-off/

Keep calm and carry on: Investing in a sell-off

https://nz.finance.yahoo.com/news/losing-retirement-password-solid-investment-advice-191259977.html

Losing your retirement password is solid investment advice

https://www.bellinghamwallace.co.nz/blog/what-does-a-strong-balance-sheet-look-like-why-is-it-important

WHAT DOES A STRONG BALANCE SHEET LOOK LIKE & WHY IS IT IMPORTANT?
Thanks for the links MW

[fish]

couta would you mind checking on your margin account interest rate
Mine is 5.5% with asb and if yours is less I need to do some negotiating

[couta1]

couta would you mind checking on your margin account interest rate
Mine is 5.5% with asb and if yours is less I need to do some negotiating I don't have a margin account, im using the excess equity in the house to buy shares, hence the 4.5% interest rate.

[Vaygor1]

couta would you mind checking on your margin account interest rate
Mine is 5.5% with asb and if yours is less I need to do some negotiating

Can you double check fish? Im on 6% even. Might be me that needs to do the negotiating. :scared:

[fish]

Can you double check fish? Im on 6% even. Might be me that needs to do the negotiating. :scared:

I double-checked before quoting the figure.
I have negotiated with them before.
I do have lots of business with them
Like couta I also have a mortgage so i can invest more-I pay 4.35 % on this which is a bigger loan and i also annually have to negotiate a better rate
A !% difference or more makes a big difference over the years.
The variable mortgage rate is 5.5% so i was happy to settle for this rate in margin lending as it is the equivalent.

[ratkin]

What colour Monday is it today?

[fish]

I feel the need to caution about margin learning in case I have mislead novice investors
For most there is an obvious danger.
I have made 3 mistakes in my investing that stick in my mind- none of which have had any major consequence because of my financial position
It works out as 1 a decade.
the first was equitycorp-it was when i was in a syndicate.Hawkins went to Jail.
The second was brierly-the directors mislead and some escaped with lots of money
The third was nzo-again those responsible escaped
It has taught me that you cannot trust all those running a company-many have an obvious conflict of interest.
I will probably stop margin lending if my other sources of income stop.
For me it is tax deductible.
Advantage are many as are risks.
In the current situation I look to drops in sp as buying cheaply.
This forum is good reading as it makes me consider stocks that have fallen below their value to me.
I already have ideas as to what to buy today.
I wont spend much painful time agonizing over what to buy-I am trying to diversify my portfolio and trust some of the posters so they will be quick decisions rather than guesses

[Peitro]

What colour Monday is it today?

Christmas Monday, just one lump of coal

[bull....]

anyone who started margin lending recently wont be singing the praises about it

[percy]

I feel the need to caution about margin learning in case I have mislead novice investors
For most there is an obvious danger.
I have made 3 mistakes in my investing that stick in my mind- none of which have had any major consequence because of my financial position
It works out as 1 a decade.
the first was equitycorp-it was when i was in a syndicate.Hawkins went to Jail.
The second was brierly-the directors mislead and some escaped with lots of money
The third was nzo-again those responsible escaped
It has taught me that you cannot trust all those running a company-many have an obvious conflict of interest.
I will probably stop margin lending if my other sources of income stop.
For me it is tax deductible.
Advantage are many as are risks.
In the current situation I look to drops in sp as buying cheaply.
This forum is good reading as it makes me consider stocks that have fallen below their value to me.
I already have ideas as to what to buy today.
I wont spend much painful time agonizing over what to buy-I am trying to diversify my portfolio and trust some of the posters so they will be quick decisions rather than guesses

Good advice.
I have not had any borrowings for just over 30 years.No mortgage.No overdraft.Has its advantages."well positioned."
At the present time I am neither buying or selling.Will wait until I think the markets have settled.

[fish]

anyone who started margin lending recently wont be singing the praises about it

agree
but if it refers to me I don't just sing the praises
It works for some and can be a disaster for others
It is a means to make a lot of money-or to loose a lot
But I do it for the dividends-which as long as they outpace the interest rate I pay profits roll in
If anyone contemplates doing it then timing is important.
The reserve bank last week stated no rise in interest rates for at least one year hence I can happily buy shares which I feel dividends will keep rolling and sell those such as contact which this year look to have reduced the dividend with no imputation credits-I need these to reduce my tax burden.
Its complex and you have to be rational and not emotive.

[bull....]

agree
but if it refers to me I don't just sing the praises
It works for some and can be a disaster for others
It is a means to make a lot of money-or to loose a lot
But I do it for the dividends-which as long as they outpace the interest rate I pay profits roll in
If anyone contemplates doing it then timing is important.
The reserve bank last week stated no rise in interest rates for at least one year hence I can happily buy shares which I feel dividends will keep rolling and sell those such as contact which this year look to have reduced the dividend with no imputation credits-I need these to reduce my tax burden.
Its complex and you have to be rational and not emotive.

wasnt referring to anyone just highlighting how margin lending is a double edged sword

[couta1]

agree
but if it refers to me I don't just sing the praises
It works for some and can be a disaster for others
It is a means to make a lot of money-or to loose a lot
But I do it for the dividends-which as long as they outpace the interest rate I pay profits roll in
If anyone contemplates doing it then timing is important.
The reserve bank last week stated no rise in interest rates for at least one year hence I can happily buy shares which I feel dividends will keep rolling and sell those such as contact which this year look to have reduced the dividend with no imputation credits-I need these to reduce my tax burden.
Its complex and you have to be rational and not emotive. Floating rates won't move much with the OCR staying the same for a year or so but fixed rates will be on the rise due to the US putting up interest rates, our fixed rates are funded by overseas money. I just refixed my share loan at 4.89% for 3 years, interest only basis. PS- The Banks are becoming more resistant to approving interest only loans beyond a certain period nowdays.

[winner69]

Good day on the bourse today with the index up

Bit of irony in that NZX itself is one of the biggest losers

[Beagle]

https://www.cnbc.com/2018/02/09/market-whiplash-could-last-weeks-invesco-top-market-watcher-warns.html

Whiplash a good adjective for it. Interestingly if you vote in their poll you'll see 66% of respondents think this whiplash will continue for weeks, 7% are undecided and just 27% think the worst is over.

[tzbang]

Kind of a oddly loaded question though.. they ask 'Do you think the market tumour could last weeks?'Do I think it could? Well.. sure it could. This doesn't mean that I think it will.. but yes it could so I will tick that box.

[couta1]

https://www.cnbc.com/2018/02/09/market-whiplash-could-last-weeks-invesco-top-market-watcher-warns.html

Whiplash a good adjective for it. Interestingly if you vote in their poll you'll see 66% of respondents think this whiplash will continue for weeks, 7% are undecided and just 27% think the worst is over. So Ms Hooper reckons the market will end up 10% by the end of the year aye, gotta love that turmoil.

[tipsy]

Damn, another down day, whats that like 6 in a row now.

[couta1]

Damn, another down day, whats that like 6 in a row now. No working out why certain stocks are getting hammered, core infrastructue divvy payers bearing the brunt. My two best performing stocks are complete opposites, yet both are holding up well, A2 high beta/PE growth stock versus HLG low beta divvy stock, the only thing they have in common is both are expecting good reports coming up.

[Beagle]

Damn, another down day, whats that like 6 in a row now.

Since April 2012 when the average historical PE on the NZX was just 13.5 we have been in a rising trend to where its now a whopping 22.5, (10 year average is just 16.6).
Its easy to make good gains when the market has expanded its PE by 67% over the last 6 years but much harder in a market where the market PE is contracting.
I expect a reversion towards the 10 year average PE to slowly unfold over the next two years. Lots of good stocks as well as the not so good could simply be ground down to the point where it becomes extremely frustrating to own them. Further, I note the NZX hasn't retraced nearly as much as many overseas markets with large parts of the European markets and Asia as well as the U.S. down 10-11% since recent market high's and this despite the fact that our market is one of the highest in the world. I continue to expect companies like ATM to perform well in a secular bear market because of their explosive earnings growth but companies with quite modest earnings growth on a PE of more than the market average of 22.5...good luck with them !

Worth noting that our market was down today on the back of a reasonably good Friday on the U.S. markets where the Dow rallied ~ 330 points. I see that as a bad sign and I am very cautious regarding expectations going forward.

[RGR367]

Damn, another down day, whats that like 6 in a row now.

I was more looking unto the stocks I was able to buy last week for comparison as of today. For IFT and SKO, I'm up by 5 cents. TGH down by a cent. NZK up 1 cent but got walloped by AIA being down by 20 cents. Time will tell of course whether I blew up my funds big time and/or gut feel was wrong. And yeah, I used ML funding those buy orders.

[BlackPeter]

I bought more CNU last week and find the % drop a bit odd for a core infrastructure stock with no profit downgrades, it hit a 52 wk low on Friday. On a pretty good PE as well.

Hmm - forward PE of 20 (@3.94 - last week) and no growth at all (well, unless you ignore the minus sign at the beginning). Sure - it is a quite safe investment unless the government or the commerce commission does something stupid (which - of course - never will happen until it does), but it just feels a bit too dear in a time of PE contraction ...

Why do you feel it odd for CNU to drop?

[Beagle]

http://www.4-traders.com/CHORUS-LTD-11318080/financials/
Analysts are forecasting declining earnings and on a PE of above 21 for FY19. I wouldn't touch it with a barge pole.

[winner69]

Using Beagles numbers of NZ50 having a PE of 13.5 as at April 12 and a PE of 22.5 now (say at end of Jan) these numbers might highlight what effect the PE expansion has had.

From April 2012 to January 2018:


NZ50 up from 3555 to 8442 - up 138% or 17.6% pa


Earnings (eps) over this period have grown by just under 7% pa


Of the increase in the NZ50 30% has come from earnings growth and a whopping 70% from PE expansion.

If the NZ50 was still valued at a PE of 13.5 it would have been 5060 as at Jan18 - some 40% lower than what it was


If the NZ50 was valued at Jan18 at its long term average of 16.6 it would have been be at 6225 - some 27% lower than what it was




What Roger is saying in his above post is that this PE expansion has made us a lot richer (hasn’t been all due to our superior stock picking skills) and that if the market reverts to an average (normalised?) PE there is is heaps more pain to come than we have experienced last week

I don't know whether it will happened but it has happened in the past

Probably not exact numbers but only shown as to the quantum as to what may happen ...and it is quite significant ....and all this can happen while earnings continue to grow, its all about market sentiment and what a ounter wants to pay for a $ of earnings

[couta1]

http://www.4-traders.com/CHORUS-LTD-11318080/financials/
Analysts are forecasting declining earnings and on a PE of above 21 for FY19. I wouldn't touch it with a barge pole. Current PE around 14, not sure if you can trust 4 traders mate, although I note their average concensus target is $4.18, so toss a coin to get a clear crystal ball. PS-I think you'd have to admit there isn't much you would touch with a barge pole at the moment. PPS-Are these not the same analysts that had Air on a concensus value of $2.10, even when it was over $3?

[Baa_Baa]

Current PE around 14, not sure if you can trust 4 traders mate, although I note their average concensus target is $4.18, so toss a coin to get a clear crystal ball. PS-I think you'd have to admit there isn't much you would touch with a barge pole at the moment. PPS-Are these not the same analysts that had Air on a concensus value of $2.10, even when it was over $3?

You make valid points Couta, albeit imho in regards to a quite unique approach to investing/profiting (and what comes across as supreme upside confidence in spite of mounting evidence), however it would be good along the way to acknowledge hard earned long time experience and expertise, not to mention the propensity to share that unselfishly.

Maybe the summary could be put simple as, we cannot treat the market as an endless bull and when the tide appears to be turning it is prudent to re-evaluate ones investing/trading strategy. Whether it is or not reverting, slavishly following proven bull market methods are not necessarily the best strategy for potential alternate realities which the 'market' has not experienced for around a whole decade. Like institutional memory loss.

Some move to mitigate risk quickly or apparently early, or soonish, or maybe depending on, or a bit later if, but don't let it get to oops. Oops at a portfolio level (missing a bull or a bear) hurts bad, really really bad, like way worse than making a poor decision buying a single share and having it turn to custard.

[peat]

Worth noting that our market was down today on the back of a reasonably good Friday on the U.S. markets where the Dow rallied ~ 330 points. I see that as a bad sign and I am very cautious regarding expectations going forward.
Yes I was a bit disappointed but really Fridays rally on SP500 was also very muted.When the mood changes not so many wish to become bargain hunters

A shock like we've just had on the global markets usually isn't nothing, and the impact can be quite prolonged however at this point I will take a sanguine view of the near future as a consolidatory phase which could be as I said quite lengthy say a few years or more.
I still think there's a reasonable possibility that we are now in a counter trend phase meaning that after this phase there might still be one last final upward leg.
This period we've now entered into is likely to have many characteristics of a bear market but is merely part of a larger pattern that is still bullish on bigger time frames.
So its not time to give up, its time to conserve energy, plan your attacks more carefully, accept that winning just got harder but do it anyway.
On Percy's recommendation I just bought an e-copy of The Zulu principle. It is an excellent work despite being written in the early 1990's. I will go back to it a lot over coming months.

[Beagle]

Current PE around 14, not sure if you can trust 4 traders mate, although I note their average concensus target is $4.18, so toss a coin to get a clear crystal ball. PS-I think you'd have to admit there isn't much you would touch with a barge pole at the moment. PPS-Are these not the same analysts that had Air on a concensus value of $2.10, even when it was over $3?

TBH its not a stock I follow mate. After the regulatory fiasco a while back I think anyone investing needs to seriously consider regulatory risk going forward and yes as you know I think the caliber of AIR analysis has been weak.

Now I've reached the conclusion there's a probability that we're either very close too or right at a market peak in terms of PE and my risk assessment of the market has changed I'm going to need to do a lot of work around what stocks I believe will do well in this new environment. I've gone to 75% cash while I work on a new strategy but my preliminary thinking is low PE companies with a needs based business should significantly outperform the market e.g. OCA. Super growth shares like ATM should also do well. SUM other companies are very good value too based on their past record of strong growth. REIT's trading below asset backing like ARG might also do okay, approx. 9% gross.

Agree Peat there's a chance that this bull has some leg up left but with this it now nine years old from the finish of the GFC widely regarded as the bottom of the cycle in March 2009 its increasingly looking unsteady on its aging feet. I might move back to a slightly higher invested position if the extreme volatility subsides over the coming weeks and that will be on a case by case basis on their merits as companies report but I will be looking for deep value and a sustainable and defensible business model in a bearish market as the cornerstones to any moderate re-deployment of cash reserves. I'll be leaving fancy pants tech companies with their creative valuation methodologies for others to enjoy.

[blackcap]

On Percy's recommendation I just bought an e-copy of The Zulu principle. It is an excellent work despite being written in the early 1990's. I will go back to it a lot over coming months.

Thanks for the reminder, just ordered one online. Have meant to buy and read this for a few years now, just never got around to it. Cheers.

Where the market is going to from here? PE's are high but if this low interest rate environment stays then I think high PE's are here to stay too. If interest rates do go up we should and would get a PE squeeze. NZ? finding it hard to find places to park money comfortably but holding cash is so difficult too. Not selling out yet, but not putting any new cash in either so any extra now accumulates as cash rather than reinvesting into equity.

[Peitro]

Interesting day, more red today than expected with the slight recovery in the US on Friday.

NZX has had a large increase in foreign ownership over the last 5 years. I wouldn’t be surprised if there is a bit of a ‘risk off’ approach by foreign demand that views our market subject to higher volatility. Today’s result could be a pointer to that, would be wonderful to see the data of who was selling today.

[hardt]

Courtesy of http://aswathdamodaran.blogspot.co.nz/
https://twitter.com/AswathDamodaran
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/MReg18.html


Market Meltdowns: Reasons, Symptoms and Consequences



Explanation
Symptoms
Market Consequences


Panic Attack
Sharp movements in stock prices for no discernible reasons, with surge in fear indices.
Market drops sharply, but quickly recovers back most or all of its losses as panic subsides


Fundamentals
Event or news that causes expected cash flows, growth or perceived risk in equities to change significantly.
Market drops sharply and stays down, with price moves tied to the fundamental(s) in focus.


Repricing of Risk
Event or news that leads to repricing of risk (in the form of equity risk premiums or default spreads).
As price of risk is reassessed upwards, market drops until the price of risk finds its new equilibrium.




9483



Year
Earnings Yield
Dividend Yield
T.Bond Rate
Implied ERP


2006
6.18%
1.77%
4.70%
4.16%


2007
5.62%
1.89%
4.02%
4.37%


2008
7.24%
3.11%
2.21%
6.43%


2009
5.35%
2.00%
3.84%
4.36%


2010
6.65%
1.84%
3.29%
5.20%


2011
7.72%
2.07%
1.88%
6.01%


2012
7.18%
2.13%
1.76%
5.78%


2013
5.81%
1.96%
3.04%
4.96%


2014
5.49%
1.92%
2.17%
5.78%


2015
5.20%
2.11%
2.27%
6.12%


2016
4.86%
2.01%
2.45%
5.69%


2017
4.42%
1.80%
2.41%
5.08%



ERP slid down to 4.4-4.5% in 12/17 - 02/18
Current ERP is up to 5.08% after this correction.

9484

How the correction stacks up below:

9485

Seeing as this is a thread named Black Monday... 87'




Annual Returns on Investments in




Year
S&P 500
3m T.Bill
10y T. Bond


1986
18.49%
6.04%
24.28%


1987
5.81%
5.72%
-4.96%


1988
16.54%
6.45%
8.22%


1989
31.48%
8.11%
17.69%





2013
32.15%
0.07%
-9.10%


2014
13.48%
0.05%
10.75%


2015
1.36%
0.21%
1.28%


2016
11.74%
0.51%
0.69%


2017
21.64%
1.39%
2.80%




9482

Mean global PER ratios could be skewed by a huge amount of those with TTM well over 40+ that will not be there next year.

130 NZX companies are included in this data.

Expected revenue growth over the next 2 years of 24.35%
Expected EPS growth over the next 5 years of 17.41%
Net profit margins are the highest we have seen in 20 years at 10.09%

If these expectations are not met... that is when you begin to revaluate the story of growth and we can move into a comfortable bear market.
In the meantime, the growth is there and unless you have positions too big to dump in a day then trying to pre-empt destruction is futile IMO.
A list of possible major events as long as my arm, same as every other year, but the end result does get worse over time.
Be wary... not fearful.

[fish]

No working out why certain stocks are getting hammered, core infrastructue divvy payers bearing the brunt. My two best performing stocks are complete opposites, yet both are holding up well, A2 high beta/PE growth stock versus HLG low beta divvy stock, the only thing they have in common is both are expecting good reports coming up.

Choosing stocks at times like this are critical.We all have our ways but which are more likely to work?
I dont trust charts or statistics.
To me the most important is fundamental value-by that i dont mean NTA but what future earnings are going to do-or likely to do.
It intrigues me that you are thinking of buying chorus.I sold out sometime ago feeling there was too much risk from wireless
With data demand increasing so fast I feel this risk has reduced.
Could you be kind enough to summarise why you think chorus is a good buy?

[winner69]

If you are selling a portion of your portfolio as a risk mitigation strategy you'll regret it sometimes. If The market goes up, you'll regret selling anything. If it collapses, you'll regret not selling more.

Not fair is it

[Leftfield]

Our old mate Warren Buffett nailed the current market when he said, “It’s only when the tide goes out, you find out who has been swimming naked.”

It’s been interesting reading the posts over the last week as the USA indexes sink and while NZX follows (to a lesser extent.)

Investors new to the market, or those exposed via recent purchases at the ‘top of the cycle’, or via leveraged/margin borrowing are swimming naked, while those longer in the market are treading water with a nervous eye on the rocks.

IMHO the market is beginning to look better after the recent ‘correction’ .

Hardt – Your post #4071 gives much food for thought and endorses my theory that it is BAU (Business as Usual) after a timely correction. “Be wary, not fearful” is my mantra at the moment.

I have no borrowings/leverage and in January 2018 I was up a giddy $46k in one month then as at last friday I was down $38k . Overall in 2018 I’m still up $8k to-date.

Like Percy I’m sitting on the sidelines, not buying or selling at the moment. To me the merits of being long term (4yrs) in the market are paying off big time during this period of uncertainty. My share portfolio is currently still up 160% so another 10% fall will not effect me too greatly.

As NZ/ASX company results start coming out over the next few weeks we will get a better picture about what shares are overpriced/underpriced, and I’ll make my decisions then.

Interesting times, keep swimming and keep your heads up.

[couta1]

Choosing stocks at times like this are critical.We all have our ways but which are more likely to work?
I dont trust charts or statistics.
To me the most important is fundamental value-by that i dont mean NTA but what future earnings are going to do-or likely to do.
It intrigues me that you are thinking of buying chorus.I sold out sometime ago feeling there was too much risk from wireless
With data demand increasing so fast I feel this risk has reduced.
Could you be kind enough to summarise why you think chorus is a good buy? Basically a divvy play, stripped a big one last September then sold,PE looks fine to me at current prices,most of these core infrastructure companies are low or no growth, so only really divvy plays, yet at the same time, completely essential to the smooth functioning of our country. PS-Wireless has limitations especially for business and remember CNU will be maintaning the fibre network once it is completely rolled out along with the old copper network.

[Balance]

If you are selling a portion of your portfolio as a risk mitigation strategy you'll regret it sometimes. If The market goes up, you'll regret selling anything. If it collapses, you'll regret not selling more.

Not fair is it

Hopefully history will record last week as a much needed sharp short painful correction - necessary to blow all that froth off the market.

Suspect many newies will take a while to come back to the market after being spooked into selling out, good as well as bad stocks.

[dobby41]

I'd like to see a full Bear develop.
History shows they don't last long (compared to Bulls).
The hit to my modest portfolio would not be great compared to the upside as, in the near future, I have considerable sums to add and it would be nice to start from a lower level.

Breaking this bull run has the added advantage that people will stop being worried about when it will end - it will be a new Bull with a 'clean' slate.

[blackcap]

I'd like to see a full Bear develop.
History shows they don't last long (compared to Bulls).
.


What about the 16 year bear from 1970 to 1986? or the 19 year Bear in the early 1900's? But yes recently there have not been long bear times so we may well be due for a bear.... https://virtueofselfishinvesting.s3.amazonaws.com/uploads/reports/2017/4675/history_of_market_corrections2-hires.png?link=mktw

[couta1]

I don't see any Bears taking up residence just yet, expecting the market to finish higher at the end of the year, might go and have a Beer now though.

[freddagg]

What about the 16 year bear from 1970 to 1986?

Are you sure? I remember a huge bull market in the 1980s until Oct 87

[blackcap]

Are you sure? I remember a huge bull market in the 1980s until Oct 87

Global context... Dow Jones, and my dates were a bit wrong, 1966 to 1982 would be more precise..... Still a 16 year Bear.

[dobby41]

What about the 16 year bear from 1970 to 1986? or the 19 year Bear in the early 1900's? But yes recently there have not been long bear times so we may well be due for a bear.... https://virtueofselfishinvesting.s3.amazonaws.com/uploads/reports/2017/4675/history_of_market_corrections2-hires.png?link=mktw

There are always exceptions!
There are various sources of bear and bull lengths but they are similar in the result (not orders different).
This one shows that the average bear lasts 1.4yrs and drops 41%
Whereas the average bull lasts 9 years and increases 480%.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=14&ved=0ahUKEwjOyrjftaHZAhUJkZQKHWdhAokQFghrMA0&url=https%3A%2F%2Fwww.ftportfolios.com%2FCommon%2F ContentFileLoader.aspx%3FContentGUID%3D4ecfa978-d0bb-4924-92c8-628ff9bfe12d&usg=AOvVaw0-eLYc_WHgDF3t1nJWmFku

[dobby41]

Global context... Dow Jones, and my dates were a bit wrong, 1966 to 1982 would be more precise..... Still a 16 year Bear.

Not according to the S&P500 graph I linked to.

[blackcap]

Not according to the S&P500 graph I linked to.

Yeah I see what you mean. So what do you call it when over a 16 year period the market only moves sideways or only marginally up? That to me is not a bull market. That is a bear. We have had a huge bull for the last few years and yes the paradigm may be different, but I am not discounting a long PE constricting Bear either. Time will tell.

[dobby41]

Yeah I see what you mean. So what do you call it when over a 16 year period the market only moves sideways or only marginally up? That to me is not a bull market. That is a bear.

Are you saying that the S&P500 graph is wrong?
From '66 to '82 it shows (roughly)
6.4yr bull - up 143%
1.6yr bear - down 29%
2.5yr bull - up 76%
1.8yr bear - down 43%
12.9yr bull - up 845% (till roughly '87)
Doesn't seem like 16yrs of sideways to me??

[BobbyMorocco]

Are you saying that the S&P500 graph is wrong?
From '66 to '82 it shows (roughly)
6.4yr bull - up 143%
1.6yr bear - down 29%
2.5yr bull - up 76%
1.8yr bear - down 43%
12.9yr bull - up 845% (till roughly '87)
Doesn't seem like 16yrs of sideways to me??

https://www.advisorperspectives.com/dshort/updates/2018/02/01/a-perspective-on-secular-bull

This page might help settle the debate. '68 to '82 most definitely a secular bear, but as always included cyclical bull and bear markets within it.

[dobby41]

https://www.advisorperspectives.com/dshort/updates/2018/02/01/a-perspective-on-secular-bull

This page might help settle the debate. '68 to '82 most definitely a secular bear, but as always included cyclical bull and bear markets within it.
Thanks for that - very interesting perspective.

[BobbyMorocco]

No worries - While the market may have been going up in nominal value in the late 70's, the ridiculously high inflation at the time meant the sharemarket was essentially going backwards. That's well before my time so I can't really comment further but I think it helps to try and understand these things to try and gain some perspective. I'm still not really sure what secular cycle we are in at present and I guess it depends who you speak with. Some argue it's a secular bull and others argue that it's still just a cyclical bull within a secular bear.

[Filthy]

Some argue it's a secular bull and others argue that it's still just a cyclical bull within a secular bear.

long story short, it basically all depends on how far you zoom-in or zoom-out of the charts with your mouse lol ;)



filthy

[BobbyMorocco]

long story short, it basically all depends on how far you zoom-in or zoom-out of the charts with your mouse lol ;)



filthy

True that. If you zoom out as far as you can go it looks magnificent! :D

[IAK]

Don't panic Martin Hawes believes “the fundamentals are still in place”. World economies and companies’ profits are still growing strongly. Interest rates also remain low.

https://www.interest.co.nz/personal-finance/92081/financial-adviser-martin-hawes-argues-stock-market-crash-isnt-looming-so

[arc]

Hope for the best.
But always ensure you are prepared for the worst.

This present cycle may be a minor hiccup in the bulls run, or it may be an early signal a bear has entered the arena.
Only time will tell.

[sonny n share]

Martin Hawes said he was selling up shares to 40% of portfolio in may 2016

Martin Hawes: Selling shares to beat the market | Stuff.co.nz
http://www.stuff.co.nz/business/opinion-analysis/80131785/martin-hawes-selling-shares-to-beat-the-market

[Baa_Baa]

Martin Hawes said he was selling up shares to 40% of portfolio in may 2016

Martin Hawes: Selling shares to beat the market | Stuff.co.nz
http://www.stuff.co.nz/business/opinion-analysis/80131785/martin-hawes-selling-shares-to-beat-the-market

Martin was not literally wrong imo, it is his timing that was off by quite a big margin. These FA / pseudo economist / advisor guys who get the spooks tend to call an early exit. Did he get paid for writing that article? (another perspective).

The logic seemed sound though, it's just a matter of timing. Who knows how many punters he sucked into an early exit missing the great bull market topping process. I wonder what he's got to say about that advice now, maybe it's 'I will attend chart school to learn about market sentiment'.

I doubt it, some 'advisors' are so entrenched in their ways, with loyal followers bolstering their egos, it's hard to imagine that they would diversify their inputs to broaden their enlightenment and consequent advice.

[winner69]

Always thought that skill needed to be boosted by luck to outperform the market ...maybe more so than I thought

A stats guy has come up with this, p being probability -

p(outperform) = p(outperform|luck)*p(luck) + p(outperform|skill)*p(skill)

Which rearranges to the following.

p(skill) = [p(outperform) - p(outperform|luck)*p(luck)] / p(outperform|skill)

[peat]

Martin Hawes said he was selling up shares to 40% of portfolio in may 2016

Martin Hawes: Selling shares to beat the market | Stuff.co.nz
http://www.stuff.co.nz/business/opinion-analysis/80131785/martin-hawes-selling-shares-to-beat-the-market

He was early by at least 18 months but in some ways for a typical portfolio he wouldn't have done too badly at all. FBU only went downhill since then. SPK is lower now than then (although both did go higher).
AIA peaked in AUG 16 (so far).CNU is lower now. RYM had a peak about then but has only in the last 6 months exceeded that peak.

It wasnt too bad a call. One might say that since then any further highs have been frothy. And recall that he only went to 50% so he's taking a measured approach.

[winner69]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from? And then where does all the cash the sellers get go to?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.

[hardt]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from? And then where does all the cash the sellers get go to?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.

Note that if a dentist in Poughkeepsie sells a single share of Apple just 10 cents lower than the previous trade, a full $500 million of market capitalization vanishes from the market. The dentist exits with $ brought by the buyer. No net cash goes "into' or "out of" the market

https://twitter.com/hussmanjp

[frostyboy]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from? And then where does all the cash the sellers get go to?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.


M1 is cash
M2 is bank accounts
M3 is credit card

My opinion is think of it like what is money..
The Corporate bond market is like a Mxx?
The stock market is like a M14, when the market decreases the available money decreases.



http://lexicon.ft.com/Term?term=m0,-m1,-m2,-m3,-m4

Different measures of money supply. Not all of them are widely used and the exact classifications depend on the country. M0 and M1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash. M2 includes M1 plus short-term time deposits in banks and 24-hour money market funds. M3 includes M2 plus longer-term time deposits and money market funds with more than 24-hour maturity. The exact definitions of the three measures depend on the country. M4 includes M3 plus other deposits. The term broad money is used to describe M2, M3 or M4, depending on the local practicee a M10

[bull....]

big night tonight -- inflation figures

[Brovendell]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from? And then where does all the cash the sellers get go to?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.

Money heaven : globaleconomicanalysis.blogspot.com/2011/02/money-heaven.html

[winner69]

big night tonight -- inflation figures

So tomorrow could be a big day .....one way or the other

[Baa_Baa]

So tomorrow could be a big day .....one way or the other

Dow March futures reckon some upside tomorrow, so far. The bull just refuses to die it seems, so far.

[Yoda]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.
i assume it comes from people like Matin Hawes that was selling 18 months ago .?

[BobbyMorocco]

One question that nobody has ever given me an answer to (or one that makes sense) is on these days when the share market collapses where does all the cash for the buying come from? And then where does all the cash the sellers get go to?

At the end of the day on a net basis no cash has left the market (just its value is billions less)

Any simple answer.

Here's a simple answer. It comes from those who have cash to buy.

I think most people get that cash by doing something that others are willing to give them money for.

Where the money came from in the very beginning I've got no idea.

How did currency come about?

Perhaps it's not so unlike bitcoin after all. I'm speculating, but is it just something someone made up one day and then eventually enough people said I like how that works please give me some and so more and more of it was created out of thin air?

Then people realised it had value and it was used to trade for products and services.

The problem is most of what's circulating is not cash at all. It's credit. Which I think is like me saying to you "hey winner I'm going to give you $100 for a bag of those tomatoes you want to sell." You believe me (because I'm a trustworthy guy and all) and so you then buy some apples from some guy using that $100 credit (he's also cool with that because you're a trustworthy guy). Later on, the guy with the apples says "hey winner I actually want that $100 and I want it in cash." You then come to me asking for $100 cash and I say "oh s**t I'm sorry winner I'm having money problems right now. It seems I borrowed more than I can afford and I've got no way of ever paying you." That means either you or the guy selling apples has to write off that debt. From there it vanishes into thin air the exact same way that it was created.

I think that's how it works??? It's all just made up 😂

Where does all the cash the sellers get go to?

Into their savings accounts at Heartland Bank. Ask Beagle. He just put a bunch in there ;)

I disagree with your last comment. On a net basis more cash has left the market because there are more people at this point in time doing what Beagle has done and cashing out than there is buying in. There's still the same number of assets available but people are saying we are not willing to pay the same amount for them and would rather have that money sitting somewhere else, so the prices drops.

Simple supply vs demand is it not?

[Joshuatree]

i assume it comes from people like Matin Hawes that was selling 18 months ago .?

:t_up:Thats it and all the others advising to sit through this while they're cashed/cashing up.

[hardt]

big night tonight -- inflation figures

Consensus is sitting on 1.9% overall and 1.7% core...

50% of the market believes there will be 3 rate hikes this year...

10 minutes to go.

[bull....]

Consensus is sitting on 1.9% overall and 1.7% core...

50% of the market believes there will be 3 rate hikes this year...

10 minutes to go.

there our big move ... very strong cpi futures just drop 400 pts from highs

[hardt]

there our big move ... very strong cpi futures just drop 400 pts from highs

1.8% instead of 1.7% expected... sky is falling in apparently.

All about how the FED react to the numbers as opposed to the numbers themselves.

EDIT - 3rd rate hike this year is back up to 100% expected 9490

Fun fact, my US portfolio is up 4% this morning... what a treat on the back of apparent bad news?

[fish]

Martin was not literally wrong imo, it is his timing that was off by quite a big margin. These FA / pseudo economist / advisor guys who get the spooks tend to call an early exit. Did he get paid for writing that article? (another perspective).

The logic seemed sound though, it's just a matter of timing. Who knows how many punters he sucked into an early exit missing the great bull market topping process. I wonder what he's got to say about that advice now, maybe it's 'I will attend chart school to learn about market sentiment'.

I doubt it, some 'advisors' are so entrenched in their ways, with loyal followers bolstering their egos, it's hard to imagine that they would diversify their inputs to broaden their enlightenment and consequent advice.

How sure are you that chartists have performed better than free thinkers?
I agree following advisors entrenched in their own views may not pay DIVIDENDS

[winner69]

1.8% instead of 1.7% expected... sky is falling in apparently.

All about how the FED react to the numbers as opposed to the numbers themselves.

EDIT - 3rd rate hike this year is back up to 100% expected 9490

Fun fact, my US portfolio is up 4% this morning... what a treat on the back of apparent bad news?

Some say those CPI numbers a bit dodgy ...there ain’t much inflation so no worries

[Balance]

https://www.cnbc.com/2018/02/15/market-correction-just-do-what-warren-buffett-does-says-one-investor.html

Invest in quality stocks and when they get cheap, buy more!

[arc]

I expect a market rise in reaction to the last decline, but also expect another market decline around 10 to 17%, sometime this year.

[Blakie]

I expect a market rise in reaction to the last decline, but also expect another market decline around 10 to 17%, sometime this year.

10-15%? Try 40-50%.
There is now more liquidity floating around looking for a yield than any point in history and it's not going to end well.
The global economic system is broken badly, even Stevie Wonder can see that.
Low interest rates, coupled with printing unlimited dollar bills is going to end in disaster.

You can expect the property market to cool by 20-40% with the biggest drops in Auckland where the market has basically become a pyrimd scheme.

Fun times ahead peps!
https://medium.com/insurge-intelligence/city-of-london-financiers-contemplate-imminent-2018-us-stock-market-crash-of-up-to-fifty-ed217752428

[arc]

10-15%? Try 40-50%.
There is now more liquidity floating around looking for a yield than any point in history and it's not going to end well.
The global economic system is broken badly, even Stevie Wonder can see that.
Low interest rates, coupled with printing unlimited dollar bills is going to end in disaster.

You can expect the property market to cool by 20-40% with the biggest drops in Auckland where the market has basically become a pyrimd scheme.

Fun times ahead peps!
https://medium.com/insurge-intelligence/city-of-london-financiers-contemplate-imminent-2018-us-stock-market-crash-of-up-to-fifty-ed217752428

Bear markets tend to start with a patch of volatility followed by short lived calm periods. The 10 to 17 I expect would be just one of an ongoing series, sawtooth pattern. At some stage in the pattern a false rally emerges, and takes the hopeful for a ride.

[couta1]

Bear markets tend to start with a patch of volatility followed by short lived calm periods. The 10 to 17 I expect would be just one of an ongoing series, sawtooth pattern. At some stage in the pattern a false rally emerges, and takes the hopeful for a ride. No Bear market this year, maybe 2019/20, a couple of short corrections I reckon, otherwise business as usual. PS-Ive been talked into accompanying my grandkids to a teddy bears picnic tomorrow.

[winner69]

No Bear market this year, maybe 2019/20, a couple of short corrections I reckon, otherwise business as usual. PS-Ive been talked into accompanying my grandkids to a teddy bears picnic tomorrow.

Good omen ...soft cuddly little teddy bears are no danger ....and no sign of big grizzly market bears eh

Not the Island Bay Teddy Bears Picnic is it?

My little teddy wears a leather jacket and has a paper clip in one ear and a badge on one sleeve and I call him Butch. Been my friend for at least 20 years.

[Beagle]

50/50 chance this is a bear market now or its done and dusted and this was just a correction...
If one goes to 50% cash they will be guaranteed to be half right and half wrong at the same time which is sure to give you a bad case of ambivalence at best, at worst you'll need regular visits to your therapist lol

[peat]

50/50 chance this is a bear market now or its done and dusted and this was just a correction...

yeh its very hard to consider that such a jolt is random out of the blue and meaningless
95139514

[hardt]

yeh its very hard to consider that such a jolt is random out of the blue and meaningless
95139514

After the worst week seen in a couple of years, we just had the best week in 5 years as the money flows back in.

Record high - $171bn in stock buybacks coming into the market in 2018. ( Double what we had in 2017 )
None of these buybacks are to occur 30 days prior to earnings reports.
Half of the larger firms in the index report earnings in Feb through March.
Largest demand of shares and support on the market come from corporations.
These buybacks also do a lot to boost total EPS and value per share for new buyers.

Nasdaq listed Q4 season has 81% beat on EPS estimates and 74.2% beat on revenue estimates.

Unless the economy implodes or the fed hike rates closer to 4% by the end of the year the market is in a sweet spot.

http://money.cnn.com/2018/02/14/investing/lloyd-blankfein-goldman-sachs-economy/index.html?iid=EL

[Valuegrowth]

I strongly believe investors will have to get used to both stock and commodity market volatility. Sharper equity market gyrations could serve up opportunities for stock pickers.

http://www.arborinvestmentplanner.com/quality-investing-characteristics-of-quality-investment-stocks/

Quality Investing: Characteristics of Quality Companies

http://www.businessinsider.com/we-could-be-heading-into-another-bear-market-for-oil-2018-2/?r=AU&IR=T

We could be heading into another bear market for oil

https://www.cnbc.com/2018/02/15/market-correction-just-do-what-warren-buffett-does-says-one-investor.html

Invest in quality stocks and when they get cheap, buy more!

[winner69]

VIX just under 20

That’s good ....implies a reasonable chance that the S&P500 could go UP 6% in next month

[couta1]

VIX just under 20

That’s good ....implies a reasonable chance that the S&P500 could go UP 6% in next month Went to the Teddy Bears picnic today and my grandkids won a 1st and 3rd prize for the best dressed and the most colourful bear, that's a good omen for the next while I reckon,even a buy signal. PS-Didnt spot any Grizzly Bears.

[winner69]

Went to the Teddy Bears picnic today and my grandkids won a 1st and 3rd prize for the best dressed and the most colourful bear, that's a good omen for the next while I reckon,even a buy signal. PS-Didnt spot any Grizzly Bears.

Wdone your grand kids ...and a proud granddad

My Butch would have won if I had taken him

And grizzly market bears gone into hibernation again

[Joshuatree]

Not over yet, more volatility ahead ?. Be careful out there or is everything back to the boom times already:confused::ohmy::mad ;:;)

[arc]

I agree Joshuatree, Watchfulness... a key ingredient in the present environment

https://www.marketwatch.com/story/bridgewaters-ray-dalio-says-us-in-a-pre-bubble-phase-with-a-70-change-of-recession-2018-02-22

[couta1]

I agree Joshuatree, Watchfulness... a key ingredient in the present environment

https://www.marketwatch.com/story/bridgewaters-ray-dalio-says-us-in-a-pre-bubble-phase-with-a-70-change-of-recession-2018-02-22 One of these guys will eventually be right, but until then they are all wrong.

[Valuegrowth]

https://www.marketwatch.com/story/these-9-experts-warn-that-another-stock-market-correction-is-coming-2018-02-28

https://www.reuters.com/article/china-hongkong-funds/china-investors-desert-hong-kong-stocks-in-droves-as-correction-fears-loom-idUSL4N1QI3Q3

[bull....]

3 days of falls in the us still looks like we gonna test the lows again of feb , nz seems to be outperforming at the moment , does that mean we need a catch up?

[Joshuatree]

Not over yet, more volatility ahead ?. Be careful out there or is everything back to the boom times already:confused::ohmy::mad ;:;)

Trade wars ahead?. Trump puts a 25% duty on imported steel and Aluminium. DOW down nearly 600 , about 300 atm

[value_investor]

A preemptive trade war might be on the cards here. We live in crazy times where the president of the USA would sabotage his own country who are the end consumers here. Scary times ahead..

As an aside, the DOW is really a poor measure compared to the S&P 500. Having such less stocks and then on top of that being a price based index instead of market cap really adds more volatility. I guess the journalists are desperate these days for clicks on their articles though. DOW falling 400 points is surely going to guarantee more clicks then the S&P dropping 35.

[bull....]

A preemptive trade war might be on the cards here. We live in crazy times where the president of the USA would sabotage his own country who are the end consumers here. Scary times ahead..

As an aside, the DOW is really a poor measure compared to the S&P 500. Having such less stocks and then on top of that being a price based index instead of market cap really adds more volatility. I guess the journalists are desperate these days for clicks on their articles though. DOW falling 400 points is surely going to guarantee more clicks then the S&P dropping 35.

actually i reckon the dow is a better barometer of international companies than the s&p500 just like the nasdaq is a better representation of tech than the s&p500.

take todays trading dow down alot compared to other indexes why? because dow represents better major international companies who may be affected more by a trade war....

[Scrunch]

As an aside, the DOW is really a poor measure compared to the S&P 500. Having such less stocks and then on top of that being a price based index instead of market cap really adds more volatility. I guess the journalists are desperate these days for clicks on their articles though. DOW falling 400 points is surely going to guarantee more clicks then the S&P dropping 35. historically there's been a very strong correlation between the s&p500 movement and the Dow movement. A website i'd found put the 15 year ave at .9557 so despite all the dows deficiencies as an index over the medium to longer term you get pretty similar results using either.

[Valuegrowth]

http://nohoartsdistrict.com/all-life/financial-advice/item/5623-correction-time-the-market-takes-a-hit

Correction Time: The Market Takes a Hit

[Baa_Baa]

9537


historically there's been a very strong correlation between the s&p500 movement and the Dow movement. A website i'd found put the 15 year ave at .9557 so despite all the dows deficiencies as an index over the medium to longer term you get pretty similar results using either.

Definitely agree with that, DOW is a good indicator ... lately of current volatility, which is the distinguishing feature of the index compared with recent history.

Investing with confidence in this current climate is perhaps ignorant of the macro effect that the US market has on the global markets. Which includes the NZX albeit a small rounding error on the big picture.

Time will tell, but the prudent approach might be to take into account the recent unprecedented volatility in the US as the market distills and decides for itself whether now is a good time to invest or a good time to wait and see, or to sell.

Whichever it is has not clearly revealed itself, but soon enough it will.

[bull....]

be interesting if we test the flash lows this week

[couta1]

be interesting if we test the flash lows this week Sorry no Cigar, business as usual. PS-Watching normal market Oscillations really isn't that interesting.

[bull....]

Sorry no Cigar, business as usual. PS-Watching normal market Oscillations really isn't that interesting.

the week has only started , anyway until we break new highs i stick too my thinking we will test the lows again if not this week at some stage

[bull....]

cohn just resigned ... looks like tarriffs are coming , be interesting to see if they employ someone in the same mould as wilber etc

[bull....]

big day these last couple , tariffs introduced , now kim jong dong is meeting trump wow wonder if it be like the apprentice? anyway still plenty of sideways action happening at the moment

[arc]

There appears to be sideways connections between Trumps "Make America great Again" and his vision for restarting the key industries. He has instituted/authorised plans to rebuild the Nuclear capabilities and associated infrastructure, equipment, facilities needed to carry and deploy them. The price tag appears to be a few Trillion dollars worth of restructuring. Perhaps this is how he sees the Steel & Aluminium Mills and associated manufacturing industries coming back to life. If you throw enough money at Lazarus... he walks again. The testing laboratories have been given notice that they have 6 month timeframes to have a test hole/equipment/technicians ready for new tests. apparently that process used to take 3 years.

Nothing quite like war or the threat of it to stimulate things.

[bull....]

lots of sideways action still , not that it worries me quite enjoy a bit of sideways action if you time it right can be very fulfilling anyway im watching the ranges for a breakout which will eventually occur

[winner69]

Worlds happy again ....we’ve got over the crisis of a month ago and most fully invested again

We talked about PE ratios reverting to the mean .....poor market returns as a consequence etc etc

Jarred reckons that the trend-following regime is over and we are heading into a mean-reverting regime

http://www.mauldineconomics.com/the-10th-man/when-the-trend-is-no-longer-your-friend

Not cool

[couta1]

Worlds happy again ....we’ve got over the crisis of a month ago and most fully invested again

We talked about PE ratios reverting to the mean .....poor market returns as a consequence etc etc

Jarred reckons that the trend-following regime is over and we are heading into a mean-reverting regime

http://www.mauldineconomics.com/the-10th-man/when-the-trend-is-no-longer-your-friend

Not cool That reversion to the mean a powerful force aye winner, reckon it's met it's match with A2 though.

[value_investor]

Interesting that our friends in the white house have rolled back the regulations placed during the GFC to curb that kind of behaviour again while debt has escalated far beyond of that during that time. I guess we are reaching maximum euphoria now and nothing can stop us (ha-ha-ha)..

[Filthy]

dow & sp500 down 2% - primarily driven by tech stocks and data privacy concerns. flash in the pan though I reckon

[bull....]

dow & sp500 down 2% - primarily driven by tech stocks and data privacy concerns. flash in the pan though I reckon

still just oscillating in the range

[arc]

Seems that no one is immune...

https://www.businessinsider.com.au/stock-market-today-selloff-facebook-data-breach-roils-tech-industry-2018-3?r=US&IR=T

https://www.cnbc.com/2018/03/19/bitcoin-is-unfolding-like-the-dotcom-crash--just-15-times-faster.html

[Valuegrowth]

Will asset sell-off and volatility intensify in the coming months and weeks?

http://business.scoop.co.nz/2018/03/20/while-you-were-sleeping-facebook-sparks-tech-selloff/

While you were sleeping: Facebook sparks tech selloff (http://business.scoop.co.nz/2018/03/20/while-you-were-sleeping-facebook-sparks-tech-selloff/)

https://www.fxempire.com/news/article/stock-market-rout-spreads-to-commodities-markets-484540

Stock Market Rout Spreads to Commodities Markets

https://af.reuters.com/article/africaTech/idAFL1N1R11N0

GRAINS-U.S. wheat futures tumble as rains cross drought-hit Plains


Seems that no one is immune...

https://www.businessinsider.com.au/stock-market-today-selloff-facebook-data-breach-roils-tech-industry-2018-3?r=US&IR=T

https://www.cnbc.com/2018/03/19/bitcoin-is-unfolding-like-the-dotcom-crash--just-15-times-faster.html

[BlackPeter]

Sounds like the end is not nigh, yet. Good article, though:

https://www.betashares.com.au/insights/us-recession-watch-end-nigh/

[Valuegrowth]

I think the market seems to have overreacted a little bit with respect to trade war. NZ market escaped from big selling this time too. Markets could rebound at least little bit by next week but volatility is ahead for stocks and commodities.

https://www.bloomberg.com/view/articles/2018-03-23/markets-show-they-aren-t-prepared-for-the-end-of-stimulus

Markets Show They Aren't Prepared for the End of Stimulus

https://www.forbes.com/sites/kenrapoza/2018/03/23/hawkish-fed-probably-worse-for-market-than-china-trade-war/#5d3a26875501

Hawkish Fed Probably Worse For Market Than China 'Trade War'

[Baa_Baa]

Colin weighs in with some sobering comments: http://tradingdiary.incrediblecharts.com/trading_diary.php

[value_investor]

Could be a bit of a black Monday tomorrow on the nzx. Even though it doesn't make much sense but I guess local markets are more 'global' then they once were.

Remember Warren Buffett said the stock market is machine that transfers wealth from the impatient to the patient.

[BlackPeter]

Could be a bit of a black Monday tomorrow on the nzx. Even though it doesn't make much sense but I guess local markets are more 'global' then they once were.

Remember Warren Buffett said the stock market is machine that transfers wealth from the impatient to the patient.

WB said as well “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”. CNN "Fear and Greed Index" sitting at 7 - "extreme fear": http://money.cnn.com/data/fear-and-greed/. I see buying opportunities ahead ...

[bull....]

WB said as well “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”. CNN "Fear and Greed Index" sitting at 7 - "extreme fear": http://money.cnn.com/data/fear-and-greed/. I see buying opportunities ahead ...


the spread on the libor is extreme as well , an indication of stress in the system some would say

[hogie]

Pretty soft opening today ... hopefully sign of relative immunity for NZX :)

[winner69]

Pretty soft opening today ... hopefully sign of relative immunity for NZX :)

If the trend-following regime is over and we are heading into a mean-reverting regime it will take some time to unfold .....but future returns won’t be as good as the past few years

[Ggcc]

Well today my portfolio to a mighty big wack.. I guess I’m not the only one though

[arc]

Well today my portfolio to a mighty big wack.. I guess I’m not the only one though
What areas ?

[Valuegrowth]

Short term speculative activities have dominated markets. Going forward after stocks violent price swings can be expected for commodities and bit coin.

https://www.express.co.uk/finance/city/939160/Bitcoin-price-crash-cryptocurrency-plunges-below-7000-investor-shock-BTC-to-USD-Coinbase

[Valuegrowth]

So far Asian markets are looking stable despite imposing tariff for 128 US products.

https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html (https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html)

China announces it's imposing new tariffs on 128 US products

https://www.reuters.com/article/us-global-markets/asia-stocks-start-new-quarter-on-front-foot-dollar-steady-idUSKCN1H901J

Asia stocks start new quarter on front foot, dollar steady

[axe]

fruit included - I wonder if any flow on impact to SCL

So far Asian markets are looking stable despite imposing tariff for 128 US products.

https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html (https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html)

China announces it's imposing new tariffs on 128 US products

https://www.reuters.com/article/us-global-markets/asia-stocks-start-new-quarter-on-front-foot-dollar-steady-idUSKCN1H901J

Asia stocks start new quarter on front foot, dollar steady

[Valuegrowth]

Good question?

Who knows SCL could get some export orders. My only concern is its extended P/E ratio but it has outperformed the packaged foods and meats industry on the basis of its ROE in New Zealand. As any stock has fair value, I expect correction in this stock too once it hit the top. It must have hit the top or could hit once more in this long bull market.


fruit included - I wonder if any flow on impact to SCL

[bull....]

So far Asian markets are looking stable despite imposing tariff for 128 US products.

https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html (https://www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html)

China announces it's imposing new tariffs on 128 US products

https://www.reuters.com/article/us-global-markets/asia-stocks-start-new-quarter-on-front-foot-dollar-steady-idUSKCN1H901J

Asia stocks start new quarter on front foot, dollar steady

fake news lol always wait for the the us market to open anyway looks like its going lower still plently to go go lower to tounch feb lows then we see what happens weather crash or bounch

[Valuegrowth]

Asia stocks start new quarter on front foot, dollar steady - Reuters.com (https://ca.reuters.com/article/topNews/idCAKCN1H901J-OCATP)
https://ca.reuters.com/article/topNews/idCAKCN1H901J-OCATP

15 hours ago - Asian stocks began the new quarter on Monday with modest gains following a strong performance by global equities last week, while the dollar held steady ahead of key economic indicators.


It seems these days direction of markets could change within 24 hours. I found above link yesterday. By the time I woke up US stocks have tumbled.

https://www.bloomberg.com/news/articles/2018-04-01/asian-stocks-set-for-muted-start-to-second-quarter-markets-wrap

U.S. Stocks Tumble on Tech Rout; Support Levels Fail (https://www.bloomberg.com/news/articles/2018-04-01/asian-stocks-set-for-muted-start-to-second-quarter-markets-wrap)

[bull....]

Asia stocks start new quarter on front foot, dollar steady - Reuters.com (https://ca.reuters.com/article/topNews/idCAKCN1H901J-OCATP)
https://ca.reuters.com/article/topNews/idCAKCN1H901J-OCATP

15 hours ago - Asian stocks began the new quarter on Monday with modest gains following a strong performance by global equities last week, while the dollar held steady ahead of key economic indicators.


It seems these days direction of markets could change within 24 hours. I found above link yesterday. By the time I woke up US stocks have tumbled.

https://www.bloomberg.com/news/articles/2018-04-01/asian-stocks-set-for-muted-start-to-second-quarter-markets-wrap

U.S. Stocks Tumble on Tech Rout; Support Levels Fail (https://www.bloomberg.com/news/articles/2018-04-01/asian-stocks-set-for-muted-start-to-second-quarter-markets-wrap)

yes the fake apparance of rising stocks in asia when you read it was misleading for sure probably got lots of people nice and calm go to the beach enjoy life , now they come back today and be very stressed there kiwisaver will be hammered today

[bull....]

anyone following the libor? rising strongly credit stress in europe? and the high yield looks like a big rounded top? ready to break down

[ratkin]

Here comes the bear, came out of hibernation in February, then went back for a nap. He up for good this time.

[Beagle]

I am cautious but note the Dow went up by a similar amount Friday morning as it went down this morning (N.Z. time) so net of that the amount the market has changed since we last traded isn't material

S&P 500 flirting with the 200 day MA is a concern. It broke below that level during the day which sparked a lot of program technical selling but recovered up to close just a few points below the line. Breech of this TA indicator wasn't a dam breaking event like some were predicting.

U.S. quarterly earnings this month should give us some more colour on the fundamental's upon which the U.S. market trades on. I don't think the market per se is expensive at about 17 times forward earnings but many tech stocks trading on no earnings or stratospheric multiples might come in the for a serious reality check this year. I'm thinking Amazon and Tesla for example.

[macduffy]

It may not last the day but how encouraging to see the NZ market doing its own thing - in a modest way - and not blindly following the US lead. Even the ASX doesn't seem to be paniced.

[Leftfield]

It may not last the day but how encouraging to see the NZ market doing its own thing - in a modest way - and not blindly following the US lead. Even the ASX doesn't seem to be paniced.

I suspect that the market is beginning to appreciate that should the trade wars that Trump has instigated escalate, then NZ is nicely positioned by its many already well established, free trade agreements.

[Valuegrowth]

Libor

Thank you for highlighting Libor. Sorry I don’t have deep knowledge about Libor but there are lot of stories. If I am right hundreds of trillions of dollars in securities and loans are linked to Libor. I heard that the London interbank offered rate to be replaced by the end of 2021.

Interest rate

Still some countries prefer to keep their interest rate low. The Reserve Bank of Australia also has kept interest rates on hold at the record-low level of 1.5 percent.

Is there any special reason for keeping interest rate low?

Volatility

As I expected volatility can be seen everywhere. Even oil has volatility now. More volatility means more selling! Some selling will create some great opportunity. NZ market is somewhat resilient. Globally, new sectors and stocks could lead the market next.


anyone following the libor? rising strongly credit stress in europe? and the high yield looks like a big rounded top? ready to break down

[NeverQuestion]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12025164

[blobbles]

Will be interesting next couple of years. One wonders if the US Fed will suddenly decide it's too hard on the economy to not keep printing money and kick the can further down the road. If they hold the line of stopping QE and increasing interest rates as they seem to be at the moment... We are into new territory. As the Herald article points out there is a huge amount in debt based derivatives, over 200tn USD. The coming collapse could be dramatically worse than 2008...

[kiora]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12025164

I would :)

[bull....]

us futures look ugly at the moment tanked after china retailiated with more tarriffs

[Valuegrowth]

Violent pull backs and volatility are back not only for stocks but also for commodities. Probably, it could stay for a while. Hopefully, we will stay with winners to ride out these types of volatility, sell-off in markets. There could be sell-off for tech related stocks and agri commodities. In the short run, commodity trading also could slow down. Globally some companies will benefit and some will have a hit due to new development in the global trade. Overall, there will be winners as well as losers.

https://www.bloomberg.com/news/articles/2018-04-03/u-s-china-tariff-list-takes-aim-at-technologies-beijing-covets

China Hits Soybeans, Aircraft in Counter-Punch to Trump Tariffs


us futures look ugly at the moment tanked after china retailiated with more tarriffs

[bull....]

Violent pull backs and volatility are back not only for stocks but also for commodities. Probably, it could stay for a while. Hopefully, we will stay with winners to ride out these types of volatility, sell-off in markets. There could be sell-off for tech related stocks and agri commodities. In the short run, commodity trading also could slow down. Globally some companies will benefit and some will have a hit due to new development in the global trade. Overall, there will be winners as well as losers.

https://www.bloomberg.com/news/articles/2018-04-03/u-s-china-tariff-list-takes-aim-at-technologies-beijing-covets

China Hits Soybeans, Aircraft in Counter-Punch to Trump Tariffs

yes getting more serious


One of the backdrops to the Black Monday 1987 collapse in U.S. stocks was mounting tensions between the U.S. and Germany over what America saw as insufficient steps to boost German demand, to narrow the U.S. trade gap.

from bloomberg

https://www.bloomberg.com/news/live-blog/2018-04-04/china-holds-briefing-on-trade-with-the-u-s

the blog shows an uncanny similarity of the hang seng today with the dow in 1987

[root]

It all got too much for me so I converted 75% of our holdings to cash on the 23 Feb. I believe we are in the distribution phase but who knows.

I’m hoping to see that my safety measures were unfounded, Just didn’t like the possibility of giving up the 2017 earnings.

I probably am still just expecting a minor / medium pull back but definitely the end of the run.

Happy to be schooled differently.

[Valuegrowth]

There is a see saw profit taking pattern in the commodity market and stock market.

https://www.bloomberg.com/news/articles/2018-04-05/-1-2-trillion-asset-manager-isn-t-worried-about-the-trade-fight

$1.2 Trillion Asset Manager Isn't Worried About U.S.-China Trade Fight

[bull....]

another 100 billion in tarriffs , futures tanking

[couta1]

another 100 billion in tarriffs , futures tanking Just talk at this point.

[bull....]

Just talk at this point.

at the moment , i see eu and japan want to join us in wto action against china

[Valuegrowth]

As I said the market seems to have overreacted a little bit with respect to trade war.

Some money managers think that emerging and frontier markets will benefit from trader war. However, frontier markets such as Angola, Ecuador, Ghana, Mozambique and Zambia, which rely on commodities as a primary source of foreign-exchange generation, could be hurt.

I also think that there will be new opportunities for Asia Ex-China. Even some local companies in China and the USA also could benefit. When import become expensive there will be demand for locally made products in China and the USA. In addition, various industries also could benefit when commodity prices stay low (under pressure).

Will there be more demand for New Zealand fruit, meat and milk?

http://www.gulf-times.com/story/587208/Aviva-storms-into-risky-frontier-debt-as-US-and-Ch

Aviva storms into risky frontier debt as US and China trade jitters ease

[Valuegrowth]

According to the following link U.S. economy is resilient and Morgan Stanley is bullish on the dollar.

https://www.bloomberg.com/news/articles/2018-04-06/morgan-stanley-stays-bullish-on-the-dollar-amid-trade-tensions

[Leftfield]

It used to be said that if the US market sniffs, the rest of the world catches a cold. However, perhaps this is about to change. Certainly, when it comes to trade wars, NZ should be relatively immune thanks to years of hard work establishing comprehensive free trade agreements in our key markets.

Perhaps the NZX should be seen as a much less risky 'emerging market?'

Check out this article. (https://www.bloomberg.com/news/articles/2018-04-06/trump-trade-war-flips-risk-making-emerging-markets-a-safe-haven) Interesting times ahead.

[Valuegrowth]

It seems trade war has taken as a reason to sell-off assets.

Could there be some great opportunity?

Some market analysts have found trade war winners as well as losers.

Trade war Losers

Share prices of American exporters of aircraft, farm equipment and grain could affect
Chinese food consumers

Trade war Winners

Companies protected by tariffs
American meat producers might save money if weaker Chinese demand depresses the price of soybeans
Opportunity for French and German competitors for products such as small aircraft and aviation technology. (In the meantime Boeing Co. is going to engage both governments proactively.
Developing countries that might replace china as a supplier to American markets. Mexico produces goods such as televisions and electrical circuits while South Korea, Malaysia and Thailand export semiconductors and other technology.
Russian meat producers
Steel importers in other countries
Some Canadian exporters
Buying opportunity for emerging market stocks

[Ggcc]

It seems trade war has taken as a reason to sell-off assets.

Could there be some great opportunity?

Some market analysts have found trade war winners as well as losers.

Trade war Losers

Share prices of American exporters of aircraft, farm equipment and grain could affect
Chinese food consumers

Trade war Winners

Companies protected by tariffs
American meat producers might save money if weaker Chinese demand depresses the price of soybeans
Opportunity for French and German competitors for products such as small aircraft and aviation technology. (In the meantime Boeing Co. is going to engage both governments proactively.
Developing countries that might replace china as a supplier to American markets. Mexico produces goods such as televisions and electrical circuits while South Korea, Malaysia and Thailand export semiconductors and other technology.
Russian meat producers
Steel importers in other countries
Some Canadian exporters
Buying opportunity for emerging market stocks
I think trade wars are not happening. Th US lost that war years ago. I think the US are trying to reclaim territory where they can. Stocks in NZ will continue to do well unless a global financial crisis takes place again. I am hoping punters panic as it means I get great entry to those shares that have no outside interference

[Valuegrowth]

Ggcc You should reward for thinking outside the box.

[Valuegrowth]

https://www.investors.com/etfs-and-funds/etf-leaders/frontier-markets-etf-outperformance/

Frontier Markets Emerge As An Option While Major Indexes Flounder

http://www.scmp.com/business/global-economy/article/2140795/trumps-chaotic-trade-crusade-making-emerging-markets-great (http://www.scmp.com/business/global-economy/article/2140795/trumps-chaotic-trade-crusade-making-emerging-markets-great)

[couta1]

US markets we're well up as fear of trade wars eased, but then the Trumpets lawyers office got raided by the FBI causing most of the gains to be lost.

[longy]

US markets we're well up as fear of trade wars eased, but then the Trumpets lawyers office got raided by the FBI causing most of the gains to be lost.

I have failed to see how his lawyer office got a raid by FBI is a bad thing.

[BlackPeter]

I have failed to see how his lawyer office got a raid by FBI is a bad thing.

Agreed.

However - too many rich and selfish people love Trumpet ... more money for the rich, more corruption! They are obviously scared somebody might drain the swamp Trump created and they thrive in ;);

That's as well the people controlling (with their money) the stock exchange.

[dragonz]

Agreed.

However - too many rich and selfish people love Trumpet ... more money for the rich, more corruption! They are obviously scared somebody might drain the swamp Trump created and they thrive in ;);

That's as well the people controlling (with their money) the stock exchange.

What a stupid comment.

[couta1]

I have failed to see how his lawyer office got a raid by FBI is a bad thing. It's a good thing, probably looking for info on who Trump uses to short the market,his Twitter account controls the market direction, positive Twitter, market goes up, negative one and it goes down.Lol

[bull....]

the Xi speech in the next few hours will set the tone im picking for the rest of the day and tomorrow

[Valuegrowth]

https://www.reuters.com/article/uk-global-forex/dollar-gains-versus-yen-as-risk-appetite-improves-after-xi-speech-idUSKBN1HH02U

Dollar gains versus yen as risk appetite improves after Xi speech

[Valuegrowth]

In my view, not all markets will have volatilely and sell-off .Going forward some markets could have strength.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12029368

In search of good news, markets turn to earnings season

https://www.businessinsider.com.au/russian-ruble-price-us-dollar-april-10-sanctions-2018-4?r=UK&IR=T

The Russian ruble is getting killed for the second day running -- and analysts think things could get worse

[bull....]

In my view, not all markets will have volatilely and sell-off .Going forward some markets could have strength.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12029368

In search of good news, markets turn to earnings season

https://www.businessinsider.com.au/russian-ruble-price-us-dollar-april-10-sanctions-2018-4?r=UK&IR=T

The Russian ruble is getting killed for the second day running -- and analysts think things could get worse


oil looking quite nice for breakout

[Valuegrowth]

In my opinion, oil will have behaviour similar to stocks. Currently, there is a short term specualtive play on selected commodities as well.I don’ think further gain for markets such as China, Vietnam, Hong Kong and Japan. Winners could come from overlooked markets in 2016/17. I think badly Beaten down stocks, stocks which had meaningful correction and multi bagger stocks could perform better in 2018.

Which stocks will come as winners in the New Zealand market?

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12026392

Stock Takes: How to spotify a winner

https://www.theguardian.com/world/2018/apr/11/iranian-rial-all-time-low-us-dollars-tehran

Iranian rial hits all-time low as citizens scramble for US dollars

[bull....]

https://www.bloomberg.com/news/articles/2018-04-10/saudi-arabia-is-said-to-signal-ambition-for-80-oil-price

$80 oil could easliy happen if escalates in syria , yemen , iran

[JBmurc]

https://www.ft.com/content/9aa5aa08-3d77-11e8-b7e0-52972418fec4

Looks like the cold war 2.0 is coming at a rapid pace ....

[bull....]

oil surges , breaking out of range, i reckon 70 first target

https://www.cnbc.com/2018/04/11/brent-jumps-to-more-than-3-year-high-after-trump-warns-russia-on-syria.html

https://www.bloomberg.com/news/articles/2018-04-11/loud-blasts-heard-in-riyadh-as-saudi-arabia-intercepts-missile

[kiora]

Ouch!
Inflation & higher interest rates coming?

[JBmurc]

Ouch!
Inflation & higher interest rates coming?

Yes really going to hurt high household debt nations with Govt that love to increase living costs with increasing taxes

[traineeinvestor]

And with today's announcement to ban further offshore oil and gas exploration (which will actually make global greenhouse gas emissions worse), the rise in oil prices comes at a time when we now face a future were NZ will become even more dependent on overseas producers for our energy needs.

[bull....]

And with today's announcement to ban further offshore oil and gas exploration (which will actually make global greenhouse gas emissions worse), the rise in oil prices comes at a time when we now face a future were NZ will become even more dependent on overseas producers for our energy needs.

the govt will lose 100s millions in royalities and taranaki will become like tamaranui i reckon , the port will die sad day for taranaki people when they lose such a big employer

[kiora]

Yep we still need that Taranaki gas !Its running out

[dobby41]

(which will actually make global greenhouse gas emissions worse),

Why?? ?

[traineeinvestor]

Why?? ?

The oil and gas we would otherwise produce for domestic consumption will have to be shipped to NZ - shipping is one of the world's biggest polluters: https://qz.com/1064658/the-shipping-industry-one-of-the-worlds-biggest-polluters-is-being-forced-to-clean-up-its-dirty-fuel/

There's also the question of where the imports will come from - a lot of oil/gas producing countries have much less rigorous environmental standards than we do.

[bull....]

The oil and gas we would otherwise produce for domestic consumption will have to be shipped to NZ - shipping is one of the world's biggest polluters: https://qz.com/1064658/the-shipping-industry-one-of-the-worlds-biggest-polluters-is-being-forced-to-clean-up-its-dirty-fuel/

There's also the question of where the imports will come from - a lot of oil/gas producing countries have much less rigorous environmental standards than we do.

agree , the only way not to import is to be energy self sufficient , dont know if the govt has a plan for that?

[traineeinvestor]

agree , the only way not to import is to be energy self sufficient , dont know if the govt has a plan for that?

harness all the methane coming out of the government offices ....

[dobby41]

The oil and gas we would otherwise produce for domestic consumption will have to be shipped to NZ - shipping is one of the world's biggest polluters: https://qz.com/1064658/the-shipping-industry-one-of-the-worlds-biggest-polluters-is-being-forced-to-clean-up-its-dirty-fuel/

There's also the question of where the imports will come from - a lot of oil/gas producing countries have much less rigorous environmental standards than we do.

My understanding was that our crude is exported and other crude is imported for Marsden Point - something to do with Marsden Point not being able to process our crude.

[dobby41]

harness all the methane coming out of the government offices ....

There's a fair bit on here also.

[JBmurc]

The oil and gas we would otherwise produce for domestic consumption will have to be shipped to NZ - shipping is one of the world's biggest polluters: https://qz.com/1064658/the-shipping-industry-one-of-the-worlds-biggest-polluters-is-being-forced-to-clean-up-its-dirty-fuel/

There's also the question of where the imports will come from - a lot of oil/gas producing countries have much less rigorous environmental standards than we do.

won't be coming from east coast aussie there having major issues around lack of supply to there major cities ...

[Valuegrowth]

My understanding was that our crude is exported and other crude is imported for Marsden Point - something to do with Marsden Point not being able to process our crude.
How about selling locally produced crude oil to NZ customers rather than exporting them. Import cost also could go down.

https://energynow.com/2018/04/bahrain-shale-find-should-put-oil-market-on-notice-robin-mills/

Bahrain Shale Find Should Put Oil Market on Notice: Robbin Mills

[traineeinvestor]

My understanding was that our crude is exported and other crude is imported for Marsden Point - something to do with Marsden Point not being able to process our crude.

Yeah, I forgot about that. Marsden Point was designed to process mediam-sour crude while the stuff we produce is light sweet crude.

[blobbles]

Yeah, I forgot about that. Marsden Point was designed to process mediam-sour crude while the stuff we produce is light sweet crude.

Yep, we are literally shipping all our good stuff overseas and importing the dirty stuff. So GHG emissions are already as bad as they can be.

Remember that the announcement means we won't be looking for more in any new areas. Maui is already going and will keep going for a few decades. It will always be bad for Taranaki when Maui runs out. Really they should be thinking about what comes next as the world is moving away from fossil fuels. You don't want to be in a business where your supply AND demand are diminishing. If you are, it is time to pivot.

[bull....]

dont even know if the govt has a plan for when the gas runs out in 10 - 11yrs time

[Scrunch]

dont even know if the govt has a plan for when the gas runs out in 10 - 11yrs time

I know the plan, but its not a good one - blame someone else.

If National is in government, blame Labour for stopping exploration activities &/or failing to invest in an alternative.

If Labour/Greens have returned to government, blame either National or the corporate sector for putting short-term profits/dividends above reinvesting in an alternative like renewable energy while they were out of power

If Labour/Greens/NZ First have remained in power since the recent election - Your guess is as good as mine as this would currently be viewed as very unlikely anyway

If some other combination is in power, blame National & Labour for the above

[dobby41]

dont even know if the govt has a plan for when the gas runs out in 10 - 11yrs time

The Govt is stopping NEW permits.
There is already a permit out for the Sth Canterbury basin which, reportedly, has a **** tonne of gas to be had.

As usual the announcement has resulted in a lot of noise without thinking first. Much teeth gnashing and angst.
The world is ending - we are all doomed.

[bull....]

The Govt is stopping NEW permits.
There is already a permit out for the Sth Canterbury basin which, reportedly, has a **** tonne of gas to be had.

As usual the announcement has resulted in a lot of noise without thinking first. Much teeth gnashing and angst.
The world is ending - we are all doomed.

what a plan relying on a big if , do they actually know what is envolved in bringing a well to fruition let alone the enormous amount of money required to do that ( which nzog do not have they would have to farm out) and the odds of it actually being a bearing well.

doesnt install much confidence in me , why theres no dispute about climate change in my opinion it would be nice to see the plan for nz,s future emission free future and how they are going to do this and how its going to be paid for.

jacinda saying its a defining moment for nz , wow the headline was defining for sure thats about all we heard

[dobby41]

what a plan relying on a big if , do they actually know what is envolved in bringing a well to fruition let alone the enormous amount of money required to do that ( which nzog do not have they would have to farm out) and the odds of it actually being a bearing well.

doesnt install much confidence in me , why theres no dispute about climate change in my opinion it would be nice to see the plan for nz,s future emission free future and how they are going to do this and how its going to be paid for.

jacinda saying its a defining moment for nz , wow the headline was defining for sure thats about all we heard

And the previous Govt was planning on what exactly?
If we are totally reliant (sink or swim) on fossil fuels then when they do run out we are buggered.
Or we could get into developing and using alternatives - whatever they may be.
Necessity is the mother of invention.

[bull....]

And the previous Govt was planning on what exactly?
If we are totally reliant (sink or swim) on fossil fuels then when they do run out we are buggered.
Or we could get into developing and using alternatives - whatever they may be.
Necessity is the mother of invention.

national dont have a plan either for nz emmission free future so scrunch will probably be right and when the gas runs out consumers will pay more from having to import

[Leftfield]

Shares with USA links could benefit from Trumps TTP turnaround......interesting times.

[blobbles]

national dont have a plan either for nz emmission free future so scrunch will probably be right and when the gas runs out consumers will pay more from having to import

That only assumes that there won't be a big push for electric cars. I think we will see further announcements similar to European announcements to phase out new ICE retail car purchases.

[Ggcc]

NZ apparently imports 97% of its oil from overseas...... it was a 2011 report so it is an old report.

http://oilshockhorrorprobe.blogspot.com/2011/06/new-zealands-oil-security-how-dependent.html

[dobby41]

NZ apparently imports 97% of its oil from overseas...... it was a 2011 report so it is an old report.

http://oilshockhorrorprobe.blogspot.com/2011/06/new-zealands-oil-security-how-dependent.html

Right - so not drilling for more oil won't INCREASE our carbon footprint by having to import more oil.
It was just a lash-out reaction by some.

[BlackPeter]

Right - so not drilling for more oil won't INCREASE our carbon footprint by having to import more oil.
It was just a lash-out reaction by some.

Actually - it will. Just open the other eye and you will see that NZ is currently producing all the gas we need. Thanks to this incredibly stupid decision of an inept government will this situation (self sufficiency of gas supply) end over the next decade (when Tui runs out). Lots of liquid gas or substitutes will need to be imported. Still worse - we might need to substitute gas with coal - which will more than double our carbon footprint (for the relevant activities). Bad for the environment, bad for our economy (balance of payments) and bad for our unemployment rate. Thanks, Cindy - that's what we need!

[dobby41]

Actually - it will. Just open the other eye and you will see that NZ is currently producing all the gas we need. Thanks to this incredibly stupid decision of an inept government will this situation (self sufficiency of gas supply) end over the next decade (when Tui runs out). Lots of liquid gas or substitutes will need to be imported. Still worse - we might need to substitute gas with coal - which will more than double our carbon footprint (for the relevant activities). Bad for the environment, bad for our economy (balance of payments) and bad for our unemployment rate. Thanks, Cindy - that's what we need!

You are presuming that there was a definite path to more gas in the next 10 years.
That was not a given!
Oddly coal has a lower impact to climate change than gas because Methane (gas) has much more impact in the upper atmosphere than CO2.

[haewai]

Nah, coal is worse, just under double the CO2e/TJ depending on type of coal and source of gas. Compare tables 1 and 2 with table 10
http://www.legislation.govt.nz/regulation/public/2009/0285/latest/DLM2390302.html

[BlackPeter]

You are presuming that there was a definite path to more gas in the next 10 years.
That was not a given!
Oddly coal has a lower impact to climate change than gas because Methane (gas) has much more impact in the upper atmosphere than CO2.

Just wondering - do you happen to be the scientific adviser of our lovely government? You certainly seem to be similarly clued up ... ;);

Seriously dobby, while I admire your loyalty for a lost cause - I still would propose you first get your physics right and do at least some basic research before you keep defending a brain dead decision;


Natural gas emits 50 to 60 percent less carbon dioxide (CO2) when combusted in a new, efficient natural gas power plant compared with emissions from a typical new coal plant [1].


https://www.reuters.com/article/australia-lng-emissions/qa-how-do-emissions-from-lng-and-coal-compare-idUSL3E7FS0HG20110510


While it is true that methane is not good if released into the atmosphere - burning it does remove all the methane related problems and releases only some (less dangerous) CO2 into the atmosphere - less than when using coal to create the same amount of energy. Burning Methane is the best we can do to remove this dangerous greenhouse gas out of the atmosphere;);

As well - the commercially available gas we would need to substitute is typically composed out of longer hydrocarbons (like Butane, Propane).

However - I do give you that there can be problems with methane leaking from badly designed gas fields.
https://www.ucsusa.org/clean-energy/coal-and-other-fossil-fuels/environmental-impacts-of-natural-gas#.WtAPTYhubIU
However - wouldn't it make more sense for our government to increase the standards and produce cleaner gas by ourselves instead of relying on others to pollute the environment by producing our energy?

[dobby41]

However - I do give you that there can be problems with methane leaking from badly designed gas fields.
https://www.ucsusa.org/clean-energy/coal-and-other-fossil-fuels/environmental-impacts-of-natural-gas#.WtAPTYhubIU
However - wouldn't it make more sense for our government to increase the standards and produce cleaner gas by ourselves instead of relying on others to pollute the environment by producing our energy?

Then the Govt would be stifling a critical industry with regulation.
I can see the headlines now :(

[bull....]

methane producing cows are the biggest greenhouse omitters , so if they dont hurry up and plant those trees the govt will never meet there targets , the oil and gas is a smokescreen lol

[BlackPeter]

Then the Govt would be stifling a critical industry with regulation.
I can see the headlines now :(

You can't be serious.

You mean our populist government prefers to stop a profitable industry in their tracks and buy the product they produce (and we need) in future from less well maintained foreign gas fields instead of keeping jobs onshore and make gas still more environmentally friendly? How is this helping our climate? How is this good for our country?

I guess so far I thought Trump is the dumbest populist around, but maybe I am wrong ...

[whatsup]

methane producing cows are the biggest greenhouse omitters , so if they dont hurry up and plant those trees the govt will never meet there targets , the oil and gas is a smokescreen lol

How about the wild buffalo , wilderbeast and other wild animals not forgetting the fish that fart or don't the greenies count them !

[777]

Why dont you take your Trump rants elsewhere. You obviously need help with this obsession you have with him. And I'm getting tired of your continual dribble

Having a bad day?

[workingdad]

Yep, we are literally shipping all our good stuff overseas and importing the dirty stuff. So GHG emissions are already as bad as they can be.

Remember that the announcement means we won't be looking for more in any new areas. Maui is already going and will keep going for a few decades. It will always be bad for Taranaki when Maui runs out. Really they should be thinking about what comes next as the world is moving away from fossil fuels. You don't want to be in a business where your supply AND demand are diminishing. If you are, it is time to pivot.

Maui wont last that long without more holes being drilled or without ongoing investment into the platforms which who in their right mind would do knowing its not going to be able to tap more holes in future? It's gas producing not oil so rather short sighted of the government to stop all offshore drilling when gas is a good alternative that will need to come from elsewhere, I wonder how expensive it will become to heat our house with gas central heating in 10 years? Companies wont come to NZ to drill while the current permits lapse either, why would they invest in a country that has made it clear they are not supported? The effects of this decision are far greater reaching downstream than anyone really understands and ultimately will impact on every NZ family using gas for hot water and heating, BBQ's and of course the need for the government to make up the half billion dollar fiscal hole left behind even before considering compounding effects of support industry..... sad day for NZ

The industry that supports oil and gas is huge and not just the big companies that will shut up shop, engineering, labour supply, training and many others will suffer and the hardest hit will be Taranaki but the economy as a whole will suffer more than just the 500 million paid in royalties and tax......

[workingdad]

You are presuming that there was a definite path to more gas in the next 10 years.
That was not a given!
Oddly coal has a lower impact to climate change than gas because Methane (gas) has much more impact in the upper atmosphere than CO2.

Off course there was, to suggest otherwise is laughable, not just 'work over' (industry term for drilling same fields) but other areas as well.

[JBmurc]

Maui wont last that long without more holes being drilled or without ongoing investment into the platforms which who in their right mind would do knowing its not going to be able to tap more holes in future? It's gas producing not oil so rather short sighted of the government to stop all offshore drilling when gas is a good alternative that will need to come from elsewhere, I wonder how expensive it will become to heat our house with gas central heating in 10 years? Companies wont come to NZ to drill while the current permits lapse either, why would they invest in a country that has made it clear they are not supported? The effects of this decision are far greater reaching downstream than anyone really understands and ultimately will impact on every NZ family using gas for hot water and heating, BBQ's and of course the need for the government to make up the half billion dollar fiscal hole left behind even before considering compounding effects of support industry..... sad day for NZ

The industry that supports oil and gas is huge and not just the big companies that will shut up shop, engineering, labour supply, training and many others will suffer and the hardest hit will be Taranaki but the economy as a whole will suffer more than just the 500 million paid in royalties and tax......

I just can't see this bunch of looney far leftys staying in power for another term ... they are heading NZ economic stabilty off a cliff

__not that National was doing a super job but least they seem to be fairly centred for most Kiwis and welcomed foriegn investment(maybe a little too much)>>>>

Who in there right mind would bring major investment to this country......... outside Tourism,, retirement villages ,,res property etc...

[couta1]

I just can't see this bunch of looney far leftys staying in power for another term ... they are heading NZ economic stabilty off a cliff

__not that National was doing a super job but least they seem to be fairly centred for most Kiwis and welcomed foriegn investment(maybe a little too much)>>>>

Who in there right mind would bring major investment to this country......... outside Tourism,, retirement villages ,,res property etc... Completely agree, current Govt is a slow moving economic train wreck(Well maybe not that slow)

[JBmurc]

The word inside the government is that they wanted to go much, much further, but it was Winston who held them up in cabinet. Labour and the Greens wanted all existing oil and gas exploration halted as well.!!!!

Cindy+Winnie NZF Green labour will go down as the worst Govt in NZ history if this is the path they are going to take...

https://www.whaleoil.co.nz/2018/04/hawkesby-government-not-interested-in-listening/


We have been sucked into a Loopy far left dictatorship run by unistudent mentality

[workingdad]

https://i.stuff.co.nz/taranaki-daily-news/103037490/Governments-oil-and-gas-exploration-halt-was-a-kick-in-the-guts-for-Taranaki-Mayor?cid=facebook.post.103037490

As per my comments yesterday. 10 years supply of gas without additional drilling. Get ready for significant power and gas increases

[BlackPeter]

https://i.stuff.co.nz/taranaki-daily-news/103037490/Governments-oil-and-gas-exploration-halt-was-a-kick-in-the-guts-for-Taranaki-Mayor?cid=facebook.post.103037490

As per my comments yesterday. 10 years supply of gas without additional drilling. Get ready for significant power and gas increases

That's probably what the government winter handout for beneficiaries and pensioners is there for - to compensate for all the energy hikes the gummit is responsible for. Everybody else is (as usual) worse off. Thanks, Taxinda!

[blobbles]

Maui wont last that long without more holes being drilled or without ongoing investment into the platforms which who in their right mind would do knowing its not going to be able to tap more holes in future? It's gas producing not oil so rather short sighted of the government to stop all offshore drilling when gas is a good alternative that will need to come from elsewhere, I wonder how expensive it will become to heat our house with gas central heating in 10 years? Companies wont come to NZ to drill while the current permits lapse either, why would they invest in a country that has made it clear they are not supported? The effects of this decision are far greater reaching downstream than anyone really understands and ultimately will impact on every NZ family using gas for hot water and heating, BBQ's and of course the need for the government to make up the half billion dollar fiscal hole left behind even before considering compounding effects of support industry..... sad day for NZ

The industry that supports oil and gas is huge and not just the big companies that will shut up shop, engineering, labour supply, training and many others will suffer and the hardest hit will be Taranaki but the economy as a whole will suffer more than just the 500 million paid in royalties and tax......

You are all thinking about "the economic output of xyz industry", but none of you are considering the economic impact of not acting on climate change. Sea levels are now rising at 3.2mm a year and the trend is increasing https://climate.nasa.gov/vital-signs/sea-level/. That could put a lot of NZ coastal cities under water really quickly and flood many areas which are flood prone/low lying. Arguments of "but it will destroy an industry" which makes up only 2-3% of our economy have to be thought of in this context. You cannot viably bury your head in the sand thinking about one side of the equation. In basic terms - we cannot be upset that fuel for BBQs are going to cost more when industries which support 90% of our economy are in crisis. We need to be forward thinking rational actors who see problems, prioritise them and cut those which threaten the majority of our future.

As a result of this impending emergency, we (even arguably right wing National saw it) have signed up to international agreements to limit our emissions, and if we don't limit our emissions, we pay big time: http://www.newshub.co.nz/home/money/2018/04/businesses-need-to-act-now-after-climate-change-report-westpac.html. In the context of that Westpac report and many others indicating the economic impact of climate change, the impact of inaction or of accelerating our GHG emissions is huge. So signalling intent to remove dirty energy from our energy makeup is just what is needed right now. Yes, we don't want future exploration or pumping of oil because this will directly affect our bottom line climate pledges which will cost us billions in the future. Expensive hot water/heating/BBQs will encourage people to switch to electric, which is fantastic in NZ as our current and future energy requirements can be easily met with renewables.

And I don't agree, yet, that this government is completely sabotaging industries without a plan. Hopefully they will put NZ on a path of encouraging investment in clean tech and future tech which will ensure NZs future is bright. If their plans do not point in this direction, then I completely agree that they have f'ed us. But its too early to say yet as all policy is not decided in the first 6 months of governing. Looking back on Nationals plans, I can't say they thought of the future very hard. It seemed more like they just wanted to expand NZs current operations despite their environmental impact (more roads/more dairy/more drilling for oil/gas). What they should have been doing is serious investments in future tech and clean tech in niche markets. We need to look to the Xeros/FPHs and invest in industries like renewables/robotics/AI/meat and milk substitutes (sunfed meats as an example), if we really want to help our economy long term. The future for NZ cannot be oil and gas.

[blobbles]

PS, a good example of NZ leading the way is the one I came across the other day. The R programming language which was created by professors in the University of Auckland and is supported by Microsoft for their PowerBI product. In the future, given the right push, this language could easily form the foundation of automated trend and predictive AI products leveraged by NZ companies. There is currently very little work going on in this field in NZ industries/businesses, which should scare everyone. We have some fantastic people in NZ creating amazing stuff out of our universities, but it all goes overseas as successive NZ governments fail to think of the future. Just look at this: https://www.auckland.ac.nz/en/about/perspectives/leading-research-and-innovation/advancing-artificial-intelligence.html. We could be at the forefront of HCI modelling, but who picks up the ball and runs with it? Where is the support? The Calahan institute IMO does not go far enough. Sometimes government NEEDs to pick/fund/create winners.

[workingdad]

You are all thinking about "the economic output of xyz industry", but none of you are considering the economic impact of not acting on climate change. Sea levels are now rising at 3.2mm a year and the trend is increasing https://climate.nasa.gov/vital-signs/sea-level/. That could put a lot of NZ coastal cities under water really quickly and flood many areas which are flood prone/low lying. Arguments of "but it will destroy an industry" which makes up only 2-3% of our economy have to be thought of in this context. You cannot viably bury your head in the sand thinking about one side of the equation. In basic terms - we cannot be upset that fuel for BBQs are going to cost more when industries which support 90% of our economy are in crisis. We need to be forward thinking rational actors who see problems, prioritise them and cut those which threaten the majority of our future.

As a result of this impending emergency, we (even arguably right wing National saw it) have signed up to international agreements to limit our emissions, and if we don't limit our emissions, we pay big time: http://www.newshub.co.nz/home/money/2018/04/businesses-need-to-act-now-after-climate-change-report-westpac.html. In the context of that Westpac report and many others indicating the economic impact of climate change, the impact of inaction or of accelerating our GHG emissions is huge. So signalling intent to remove dirty energy from our energy makeup is just what is needed right now. Yes, we don't want future exploration or pumping of oil because this will directly affect our bottom line climate pledges which will cost us billions in the future. Expensive hot water/heating/BBQs will encourage people to switch to electric, which is fantastic in NZ as our current and future energy requirements can be easily met with renewables.

And I don't agree, yet, that this government is completely sabotaging industries without a plan. Hopefully they will put NZ on a path of encouraging investment in clean tech and future tech which will ensure NZs future is bright. If their plans do not point in this direction, then I completely agree that they have f'ed us. But its too early to say yet as all policy is not decided in the first 6 months of governing. Looking back on Nationals plans, I can't say they thought of the future very hard. It seemed more like they just wanted to expand NZs current operations despite their environmental impact (more roads/more dairy/more drilling for oil/gas). What they should have been doing is serious investments in future tech and clean tech in niche markets. We need to look to the Xeros/FPHs and invest in industries like renewables/robotics/AI/meat and milk substitutes (sunfed meats as an example), if we really want to help our economy long term. The future for NZ cannot be oil and gas.

Doing something about climate change needs to benefit climate change and implemented with careful thought and consideration not some knee jerk reaction just so they can be seen to be doing something for the sake of doing something, a considered approach with appropriate mitigation controls. Reducing the reliance on say 20% of our power from gas when an alternate is in place. How is importing the same product going to improve climate change? Getting it here results in more fossil fuel burn. To be successful the target should be appropriate alternatives not changing supply lines without reducing end consumption. Coal fired stations are dying eg huntly so it’s not right to say nothing has been done but it can’t change overnight. Fixing Auckland road congestion would result in less fuel burn would it not? Smarter farming practices, reduce imported older cars subsidies for solar ect. There’s numerous ways to go about it smarter than hitting a supply line that benefits nz and replacing that with product sourced overseas that won’t do sweet all to end use. Get the ducks in a row before cutting off the nose to spite the face.......

[value_investor]

This was going to happen eventually. If it happened in 2019, 2020, 2021 etc people would have had the same reaction to it. The government picks up single digit royalties on these and from my understanding the revenue earned is in the 100s of millions which is small. While I do think this was necessary to happen, the lack of consultation and the knee jerk reaction from the government is concerning.

[blobbles]

Doing something about climate change needs to benefit climate change and implemented with careful thought and consideration not some knee jerk reaction just so they can be seen to be doing something for the sake of doing something, a considered approach with appropriate mitigation controls. Reducing the reliance on say 20% of our power from gas when an alternate is in place. How is importing the same product going to improve climate change? Getting it here results in more fossil fuel burn. To be successful the target should be appropriate alternatives not changing supply lines without reducing end consumption. Coal fired stations are dying eg huntly so it’s not right to say nothing has been done but it can’t change overnight. Fixing Auckland road congestion would result in less fuel burn would it not? Smarter farming practices, reduce imported older cars subsidies for solar ect. There’s numerous ways to go about it smarter than hitting a supply line that benefits nz and replacing that with product sourced overseas that won’t do sweet all to end use. Get the ducks in a row before cutting off the nose to spite the face.......


There IS an alternative. All the things we run on gas on this country could be electric. It has been there for a long time. We do not produce our own crude oil for cars. We import it from the middle east. Any oil we produce in NZ is sent offshore anyway to be used for other things, some of which we re-import.

[blobbles]

This was going to happen eventually. If it happened in 2019, 2020, 2021 etc people would have had the same reaction to it. The government picks up single digit royalties on these and from my understanding the revenue earned is in the 100s of millions which is small. While I do think this was necessary to happen, the lack of consultation and the knee jerk reaction from the government is concerning.

I don't understand how this is "knee jerk". Responding to an environmental crisis we have known about for 30 odd years is not "knee jerk". Allowing current known and exploited fossil fuel reserves to be used up is not "knee jerk". This was a sensible response which could have been MUCH worse for the industry.

[workingdad]

There IS an alternative. All the things we run on gas on this country could be electric. It has been there for a long time. We do not produce our own crude oil for cars. We import it from the middle east. Any oil we produce in NZ is sent offshore anyway to be used for other things, some of which we re-import.

Gas as in LPG..... drilling is not just about oil. My gas heating is considerably cheaper than electricity, my gas hot water is significantly cheaper than electricity and given 20% of electricity generation in NZ is derived from gas/lpg I feel use of it for these is perfectly acceptable.

Change is done in increments not all at once and labour and the greens have jumped ahead of themselves, I get it, your more of a greenie than I am but ask any NZer even those working on oil rigs like I have done if they want a cleaner greener NZ and I can assure you the answer will be yes but it is a global situation and removing supply in NZ to have it come from overseas (once again gas/lpg) is not a pragmatic, reasonable or considered approach regardless of how you look it, the infrastructure of the country is not ready to go without lpg or oil for that matter, target that not the supply that will simply be shipped from somewhere else.

[blobbles]

Gas as in LPG..... drilling is not just about oil. My gas heating is considerably cheaper than electricity, my gas hot water is significantly cheaper than electricity and given 20% of electricity generation in NZ is derived from gas/lpg I feel use of it for these is perfectly acceptable.

Change is done in increments not all at once and labour and the greens have jumped ahead of themselves, I get it, your more of a greenie than I am but ask any NZer even those working on oil rigs like I have done if they want a cleaner greener NZ and I can assure you the answer will be yes but it is a global situation and removing supply in NZ to have it come from overseas (once again gas/lpg) is not a pragmatic, reasonable or considered approach regardless of how you look it, the infrastructure of the country is not ready to go without lpg or oil for that matter, target that not the supply that will simply be shipped from somewhere else.

We have a decade or two to react before supplies run out. During that time it will get more expensive, absolutely, but it won't be overnight and will encourage users to choose electric. I aren't sure how this could be done better? Sure, we need to replace Huntly's gas generators. But not long ago we were cancelling major renewable projects (particularly wind), because energy demand was not there. Put these back into action and capitalise more on our geothermal and we can catch up pretty quickly. It is the "low hanging fruit" of being able to meet our GHG emission reductions.


You still haven't talked about the other side - the price of inaction. If we do not quickly replace gas, we put ourselves at risk of having to buy emissions credits from other countries, which will put a massive dent in government books and new taxes will need to be raised to cover these. This amount was last calculated at $14.2b by 2030 (http://www.newshub.co.nz/home/politics/2017/05/new-zealand-to-spend-14-billion-to-meet-paris-agreement-targets.html). The taxes to cover this will be on other industries in NZ, which will make these more expensive to operate in NZ than in other countries. Without taking decisive action now, the entire future of other industries in NZ are put at risk. We have abundant natural resources in NZ. We can use them and become ultra competitive because we derive all of our energy needs from non GHG sources, or we can keep going with something that is giving us a few 100m in royalties a year and receive a $14b bill later. The choice is clear.

You also might feel the use of gas powered items are acceptable because you are not paying for the emissions. Its high time emissions were included in price. Now I am not saying you are not green or interested in a clean environment. But we have an environmental emergency which both Labour and National, while in power, have been dragging their feet over for 30 years. Now it comes time for decisive action or it will cost us big time.

[777]

Emission credits. A system of putting money in someones pockets and achieving little.

[clifton]

It is of course extremely wasteful to burn oil and gas. Oil and gas are currently indispensable feedstock for various chemical industries and this Government's actions will kill the Taranaki's chemical industry eg the Methanex plants and others, no reinvestment etc. They will ultimately close down and new plants will be built elsewhere in other jurisdictions where there will be more certainty of supply of the raw material, gas. Meanwhile we will still be wearing artificial fibres (oil based), taking various medicines (often oil based) using plastic insulation (oil based) on electrical wires in our electric cars. Clearly this Government does not want New Zealand to have any oil or gas based industry. In my view it would have been better to encourage research, and create conditions that would favour substitution of oil and oil products with other supposedly greener alternatives, and then let the oil industry whither. This will happen anyway to some extent with the prediction by some that electric vehicles will replace most internal combustion vehicles. But for many chemical products derived from oil and gas there is little alternative.