View Full Version : Black Monday
If people have jobs, they can handle an OCR of 5%. If housing hasn't crashed, they can handle an OCR of 5%.
Anecdotal, plus a sprinkle of enough data to spot a trend: some big pay rises occurring in certain sectors within NZ. Especially job switching; and sometimes with offers to match.
bull....
01-07-2022, 03:58 PM
nz dollar at new lows , getting savaged :scared: those overseas investors in the nzx are not only losing on the stocks there taking a bath on the nzd
alokdhir
01-07-2022, 04:01 PM
nz dollar at new lows , getting savaged :scared:
Its a by product of NZ yields dropping big time and world recession view gaining momentum .
Now markets will overdo this too ...lol
Most market readers are getting things wrong ...eg German employment data went totally opposite to consensus
bull....
01-07-2022, 04:05 PM
Its a by product of NZ yields dropping big time and world recession view gaining momentum .
Now markets will overdo this too ...lol
but the banks told us mtges rates were going up because of bond rates going up
what they going to say now if they wont drop mortgages ? lol
nz economy going into stagflation :scared:
bull....
01-07-2022, 04:06 PM
US futures very bad.
run for the hills , 2900 sp 500 according to a lot of pundits , but i guess if we go into 1929 style things ill have to adjust my calculator down to 900 ?
run for the hills , 2900 sp 500 according to a lot of pundits , but i guess if we go into 1929 style things ill have to adjust my calculator down to 900 ?
Score of game by end of week might be a rugby score instead!
alokdhir
01-07-2022, 04:25 PM
[QUOTE=bull....;964592]run for the hills , 2900 sp 500 according to a lot of pundits , but i guess if we go into 1929 style things ill have to adjust my calculator down to 900 ?[/QUOTE
" Came across this interesting stats observation by Deutsche Bank:
"Deutsche Bank's Jim Reid, meanwhile, found that the five worst H1 performances for the U.S. S&P 500 before this year's near 20% slump had all been followed by big bounces.
"In order of H1 declines, we saw 1) 1932: H1 -45%, H2 +56%, 2) 1962: H1 -22%, H2 +17%, 3) 1970: H1 -19%, H2 +29%, 4) 1940: H1 -17%, H2 +10%, 5) 1939: H1 -15%, H2 +18%," Reid said."
Food for thought - better watch those shorts ?? "
Posted by Davexl. on Bear market thread ...In case u dont read it ...as totally opposite to your 900 SP500 view ...so reposted
bull....
01-07-2022, 04:46 PM
[QUOTE=bull....;964592]run for the hills , 2900 sp 500 according to a lot of pundits , but i guess if we go into 1929 style things ill have to adjust my calculator down to 900 ?[/QUOTE
" Came across this interesting stats observation by Deutsche Bank:
"Deutsche Bank's Jim Reid, meanwhile, found that the five worst H1 performances for the U.S. S&P 500 before this year's near 20% slump had all been followed by big bounces.
"In order of H1 declines, we saw 1) 1932: H1 -45%, H2 +56%, 2) 1962: H1 -22%, H2 +17%, 3) 1970: H1 -19%, H2 +29%, 4) 1940: H1 -17%, H2 +10%, 5) 1939: H1 -15%, H2 +18%," Reid said."
Food for thought - better watch those shorts ?? "
Posted by Davexl. on Bear market thread ...In case u dont read it ...as totally opposite to your 900 SP500 view ...so reposted
lot of different factors this time
bull....
01-07-2022, 05:02 PM
another big dump on the close for the nzx ... getting stealthy they are , dont want to spook the chooks during the day i guess
another big dump on the close for the nzx ... getting stealthy they are , dont want to spook the chooks during the day i guess
Lol .
US futures improving.
Nasdaq Futures -0.32%
S&P Futures -0.33%
(both up from -1%)
Gonna be an interesting Friday on Wall St!
Bears 2 - 1 Optimists
@bull...., anyone else, current match ends end of US Friday trading; new one-week match directly thereafter.
I'll post the score. Let me know if you agree. I'm taking this exciting new investing environment for stocks day-by-day, week-by-week, so this is actually useful lol.
Monday in US is a holiday so the first 3+ days of Game 2 the world will have no direction from them as they drink beer and eat processed foods.
US futures improving still more.
Nasdaq Futures -0.16%
S&P Futures -0.15%
Nasdaq Futures -0.12%
S&P Futures -0.09%
And, DOWN !
Bitcoin 18.9
Nasdaq Futures -0.47%
S&P Futures -0.34%
And, UP !
Bitcoin 19.4
Nasdaq +0.44%
S&P +0.25%
@bull...., anyone else, current match ends end of US Friday trading; new one-week match directly thereafter.
I'll post the score. Let me know if you agree. I'm taking this exciting new investing environment for stocks day-by-day, week-by-week, so this is actually useful lol.
Monday in US is a holiday so the first 3+ days of Game 2 the world will have no direction from them as they drink beer and eat processed foods.
Game 1 result:
Bears 2 - 1 Crazy Optimists
bull....
02-07-2022, 08:20 AM
Game 1 result:
Bears 2 - 1 Crazy Optimists
trading before long weekend is typically low volume as people head off early , in fact the markets recovered more as the afternoon wore on due to increasing lighter volumes. so take it as a win by default lol.
anyway i see zuckerberg has joined the chorus off tech people saying hes going to lay off thousands and expects the downturn to be serious
Waltzing
02-07-2022, 08:47 AM
BULL the Z man using it as an opportunity to cut operating expenses as he realises the meta verse is going to be harder to monetise then expected.
Apple and MS already have products (or under development) that allow for modelling in VR modes and can run those model across the internet for commercial use in manufacturing.
That just leaves Meta to hope a VR version of FB will be embraced as the engineering world is already being catered for already and monetarised.
Also meta may not be the only platform or the only way to Drive VR as other technologies are under development using new languages that meta does not own but could use.
VR could be driven using new languages that dont actually do what traditional lexical processing drives.
trading before long weekend is typically low volume as people head off early , in fact the markets recovered more as the afternoon wore on due to increasing lighter volumes. so take it as a win by default lol.
anyway i see zuckerberg has joined the chorus off tech people saying hes going to lay off thousands and expects the downturn to be serious
Bears won the week. But not convincingly!
BULL the Z man using it as an opportunity to cut operating expenses as he realises the meta verse is going to be harder to monetise then expected.
Apple and MS already have products (or under development) that allow for modelling in VR modes and can run those model across the internet for commercial use in manufacturing.
That just leaves Meta to hope a VR version of FB will be embraced as the engineering world is already being catered for already and monetarised.
Also meta may not be the only platform or the only way to Drive VR as other technologies are under development using new languages that meta does not own but could use.
VR could be driven using new languages that dont actually do what traditional lexical processing drives.
The Z *Lizard*...
Valuegrowth
02-07-2022, 07:48 PM
https://www.cnbc.com/2022/07/01/fed-could-cut-interest-rates-in-2023-analysts-say-after-rate-hikes-this-year.html (https://www.cnbc.com/2022/07/01/fed-could-cut-interest-rates-in-2023-analysts-say-after-rate-hikes-this-year.html)
As share prices fall there are less in the shareies army willing to add to their portfolios. 69% of respondents are willing, down from 73% last month in Tony Alexander's survey
Read here: https://www.sharesies.nz/learn/investing-insights-with-tony-alexander-investors-are-more-cautious
Funny ay. As prices fall one should buy more. But market psychology and all that
BlackPeter
04-07-2022, 10:03 AM
As share prices fall there are less in the shareies army willing to add to their portfolios. 69% of respondents are willing, down from 73% last month in Tony Alexander's survey
Read here: https://www.sharesies.nz/learn/investing-insights-with-tony-alexander-investors-are-more-cautious
Funny ay. As prices fall one should buy more. But market psychology and all that
69% interested in buying is still a high number. Just lets wait until fear controls sharesies investors as it currently controls the US stock markets. CNN fear and Greed Index is currently on 24 / 100: Extreme fear .... now this is the phase where buying will become interesting ...
https://edition.cnn.com/markets/fear-and-greed
Buy when others are fearful.
CatO'Tonic
05-07-2022, 07:43 PM
Not sure if this is the right thread but this guy speaks to me: https://www.youtube.com/watch?v=OlmntN4wiJI
Baa_Baa
05-07-2022, 09:20 PM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
Joshuatree
05-07-2022, 09:33 PM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
Spot on . I"d give you some rep for that,but I already have:).
.Of course you can't pick bottoms so averaging in to those quality dstressed stocks when the time is right for you is a good strategy.Its not as easy as it sounds to go against the herd when fear is in the air but it can magnify returns big time.My investment portfolio outperforms my tiny trading one most of the time
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
Baa Baa for Prime Minister!
Enjoying reading these well articulated, long-term investor perspectives
RupertBear
05-07-2022, 10:13 PM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
Excellent post Baa Baa! Very very well articulated :)
bull....
06-07-2022, 05:04 AM
US dollars ? a good spot it has been this yr to park funds while we wait .... should hold up i hope as it needs to be strong
us dollars going gangbusters , crushing commodities though.
NZD slaughtered to new lows no good for nz inflation ?
wow oil crushed :scared: dampen inflation in coming mths ?
not doing anything for the market though although nasdaq not to bad , guess since bonds are lower
asx looking horrible at the moment
kiora
06-07-2022, 06:36 AM
That's a rap Baa_baa
winner69
06-07-2022, 08:17 AM
Good post by BaaBaa
That’s why the book JUST KEEP BUYING is selling well and articles on dollar cost averaging are getting high numbers viewing them
Book here https://www.fishpond.co.nz/Books/Just-Keep-Buying-Nick-Maggiulli/9780857199256?gclid=CjwKCAjwwo-WBhAMEiwAV4dybbE1Iumdhqa4uR-cxyaOKPVeHtC0pz_aWy9SkBlDdNche6ZRTivNsxoCW7cQAvD_B wE
Or you try a free trial at audible.com and hear it while on way to work or whatever
https://www.audible.com.au/pd/Just-Keep-Buying-Audiobook/B09RRFW9JN?source_code=M2MOR131091619005N&ds_rl=1252391&gclid=CjwKCAjwwo-WBhAMEiwAV4dybQ_OcPyGrYI5RNH6UO3Zz6MnETV7j0NqhNgfe WIC1xmGKyPf-50yphoCAFoQAvD_BwE&gclsrc=aw.ds
percy
06-07-2022, 08:25 AM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
Excellent....Well put....
alokdhir
06-07-2022, 08:32 AM
Eventually market is coming around to fact that rates do not need to go sky-high as thought by many before ...but I will still say its early days to do the final assessment . Market at present do seem convinced that long term rates have already peaked thus SP contraction based on DCF has bottomed thus high PE stocks have some basis to come back to normal recessionary levels at least .
Final chapters of this saga are yet to be written so I will try to keep open mind to further setbacks in this fight with Inflation
But my prognosis for this downturn remains same as I thought before that economies are so fragile that they dont need super high rates to fight Inflation ...recessions thus end of inflation will be much easier to achieve .Also with quantum of household and govt level debts so high that small incremental rates increases cause high absolute depletion of inflationary resources
NZD getting close to 60 Cents which works very well to rebalance NZ economy ...exporters have a strong tailwind with overseas revenues getting almost 12% NZD boost from 70 levels ....FPH comes to mind ...this should help it bottom out and start a new uptrend soon
Snoopy
06-07-2022, 08:41 AM
That's a rap Baa_baa
It was a good post from Baa_Baa. And being a long term investor myself it is a point of view that I have a lot of sympathy with. However, it wasn't a wrap, because there is one ultra important angle missing that is required to 'wrap' up this story.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
A good measuring stick of value is something called the Price earnings ratio or PER for short. Baa-baa has spoken eloquently about the 'P' but said nothing about the 'E'.
The problem I see, as someone who has been involved in markets well before the current record breaking bull run, is that I see very few if any companies on the NZX trading at below intrinsic value. I can see plenty of companies where the share price has been hammered. But in most cases that simply reduces the price from 'exorbitant' to merely 'expensive'. As an example I have seen mention that a growth company trading on a PE of 15 is 'cheap'. No it isn't. A PE of 15 means considerable future growth is already built into that share price. And execution of growth plans is always subject to uncertainty that has derailed many 'sure thing' prospects in the past.
Factor is prospective earnings declines on top of the negative share price action and I would say the NZX is currently significantly overvalued. I am not saying there is no value to be had for the careful buyer. But before any buying decisions are made, I would suggest a lot of prodding with the value probe is required.
I also take issue with the comment that such investment opportunities in the market come along infrequently. I agree there has been a recent drought in value purchasing opportunities. But this is unusual for markets. There are more often than not in the history of markets many opportunities to make value purchases. Don't fall for that FOMO hook just because opportunities have been sparse in recent years.
Fellow, investors, be very careful out there.
SNOOPY
bull....
06-07-2022, 09:09 AM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
long term investors need a good crystal ball when it comes to picking winners
percy
06-07-2022, 09:27 AM
long term investors need a good crystal ball when it comes to picking winners
Every day there are opportunities.
The hard part is seeing them.
I find taking advantage of just one a year can work out really well.
Remember the more research you do the better "luck" you will have.
Joshuatree
06-07-2022, 09:44 AM
It was a good post from Baa_Baa. And being a long term investor myself it is a point of view that I have a lot of sympathy with. However, it wasn't a wrap, because there is one ultra important angle missing that is required to 'wrap' up this story.
A good measuring stick of value is something called the Price earnings ratio or PER for short. Baa-baa has spoken eloquently about the 'P' but said nothing about the 'E'.
The problem I see, as someone who has been involved in markets well before the current record breaking bull run, is that I see very few if any companies on the NZX trading at below intrinsic value. I can see plenty of companies where the share price has been hammered. But in most cases that simply reduces the price from 'exorbitant' to merely 'expensive'. As an example I have seen mention that a growth company trading on a PE of 15 is 'cheap'. No it isn't. A PE of 15 means considerable future growth is already built into that share price. And execution of growth plans is always subject to uncertainty that has derailed many 'sure thing' prospects in the past.
Factor is prospective earnings declines on top of the negative share price action and I would say the NZX is currently significantly overvalued. I am not saying there is no value to be had for the careful buyer. But before any buying decisions are made, I would suggest a lot of prodding with the value probe is required.
I also take issue with the comment that such investment opportunities in the market come along infrequently. I agree there has been a recent drought in value purchasing opportunities. But this is unusual for markets. There are more often than not in the history of markets many opportunities to make value purchases. Don't fall for that FOMO hook just because opportunities have been sparse in recent years.
Fellow, investors, be very careful out there.
SNOOPY
Another wise post,thanks Snoops.Not much on the NZX for me either but there are on the ASX especially small techhie type plays and small oil producers if you believe in the oil deficit story from hereon. Im still not convinced of transitory inflation, or a shallow recession ,could be something bigger, but im buying great companies below their intrinsic valuation.Mainly topping up actually.
The other worrying thing is this oil issue.As was pointed out to me NZ at the bottom of the world with no refinery.If oil does head to say $150 until green energy catches up(if it ever does) we are in a very weak position down here.
How's that for timing btw ,refineries can't keep up ATM and are making a killing margin wise
kiora
06-07-2022, 10:27 AM
It is a rap for investors buying now for long term future earnings and evaluating short term volatility in earnings and share prices
The Black Monday thread has got to being an interesting and educational reading site recently..A high quality investor-wisdom post from Baa_Baa..equality so with Snoopy's high quality post which somewhat rained on Baa_Baa's parade..but that happens when one dives deeper into a generalised posting.
So with that in mind I apologise to Snoopy as I dive a bit deeper into his quality post.
When looking at PE ratios it isn't as easy as looking at a long list of companies and say "that stock has a very low PE ratio, it must be cheap and therefore a 'long term must buy' ". As most of us know it's a little more complex than that...Investing in a Bull market run makes one lazy and skip our homework and over time these habits makes us forget...
So with a bear market and using time as a friend we have to re-learn and re-start the homework.
Relating back to PE Ratio's and this being a generalised post it's advisable to look back to long term history of that stock PE and compare it with other stocks PE's within its industry sector as well as looking at the PE ratio trend..Some stocks run with a higher average PE than others...some may have underlying problems and their price is discounted accordingly, some may have long term underlying problems out of their control and the whole sector is affected, such as a government regulated industry..Some Companies may have (with a quick glance) a higher PE ratio than the stock
market indices average yet considered cheap (Utilities spring to mind)..Or on the other hand a falling trend with PE ratio in single digits and well below the stock market indices average, maybe, a warning sign with Cyclical Stocks....
Life ain't easy..eh
percy
06-07-2022, 10:58 AM
The Black Monday thread has got to being an interesting and educational reading site recently..A high quality investor-wisdom post from Baa_Baa..equality so with Snoopy's high quality post which somewhat rained on Baa_Baa's parade..but that happens when one dives deeper into a generalised posting.
So with that in mind I apologise to Snoopy as I dive a bit deeper into his quality post.
When looking at PE ratios it isn't as easy as looking at a long list of companies and say "that stock has a very low PE ratio, it must be cheap and therefore a 'long term must buy' ". As most of us know it's a little more complex than that...Investing in a Bull market run makes one lazy and skip our homework and over time these habits makes us forget...
So with a bear market and using time as a friend we have to re-learn and re-start the homework.
Relating back to PE Ratio's and this being a generalised post it's advisable to look back to long term history of that stock PE and compare it with other stocks PE's within its industry sector as well as looking at the PE ratio trend..Some stocks run with a higher average PE than others...some may have underlying problems and their price is discounted accordingly, some may have long term underlying problems out of their control and the whole sector is affected, such as a government regulated industry..Some Companies may have (with a quick glance) a higher PE ratio than the stock
market indices average yet considered cheap (Utilities spring to mind)..Or on the other hand a falling trend with PE ratio in single digits and well below the stock market indices average, maybe, a warning sign with Cyclical Stocks....
Life ain't easy..eh
It is a lot easier if you buy a stock with a eps growth rate higher than their PE ratio.
Few and far between,but they are there.
While I'm at it on the Sharetrader forum I might as well...cry doom.
As we know you often hear in media about this inverted curve thing being a predictor of a coming recession.
Well the Media has been rather quite about it this this time around.
The truth is with Media is when you hear it has already happened and some times its too late as the opportunity has passed.
When hearing about the Inverted Curve prediction it is not too late as it is a leading indicator by several months.
Why many people believe in the Inverted Curve/Recession prediction is due to its high success rate.
Below are two charts a long term and a very long term chart.
Notice on the very long term chart that the 1945 1948 1953 recessions where not predicted..not sure why, if anyone reading this post know can they post the reason why..it will save me the time.
13943
Is the approaching technical recession going to be one with full employment and a housing market still standing? Because, if so, then so what?
alokdhir
06-07-2022, 01:59 PM
Is the approaching technical recession going to be one with full employment and a housing market still standing? Because, if so, then so what?
Inflation will not be tamed unless we loose some jobs and shed some housing market confidence ...Aim is to control Inflation not cause recession but that becomes inevitable especially in current scenario of job market and housing confidence ...people need feel scared financially so that they control their spending which was happening due to covid backlash also . Jobs and housing market downturn will surely be collateral damage otherwise Inflation will not be tamed ...sooner both collapse faster will be overall recovery
JBmurc
06-07-2022, 02:10 PM
Inflation will not be tamed unless we loose some jobs and shed some housing market confidence ...Aim is to control Inflation not cause recession but that becomes inevitable especially in current scenario of job market and housing confidence ...people need feel scared financially so that they control their spending which was happening due to covid backlash also . Jobs and housing market downturn will surely be collateral damage otherwise Inflation will not be tamed ...sooner both collapse faster will be overall recovery
Much of the Inflation is from overseas ,, higher energy costs ..supply disruptions ... these form knock on affects across many sectors .. along with Govt adding costs to businesses through Regs levies law changes COVID lockdowns... then to throw petrol on the fire they dropped Interest rates to record lows and through the media promoted low rates for longer ,build houses etc etc ...
SailorRob
06-07-2022, 02:10 PM
A black Monday, or any black day, week or month, maybe even a year or two or three is the mana from heaven for bona fide long term investors. These are our times.
In contrast to trading, long term investors don't eek out short or medium term capital gains by buying and selling, or expose themselves to trading fees and taxes. We wait patiently for the market to gift us equity assets at prices below intrinsic value, hopefully well below or obscenely below.
Now is one of those times and it could get even better, they come about very infrequently. But our lack of engagement with the market prior to these periods is marked only by our heightened engagement when the time comes to accumulate fear, distressed sellers, traders who missed the sell, unfortunates who needed the money and sold low.
Long term investing is about patience, it's about waiting, sometimes for a long time to accumulate substantial positions when the market gifts opportunity. It's never about speculative companies, unless it's a punt on the side, but that's not in the long term portfolio. It's about reliable long term basic economic necessities that are and will continue to be profitable and distribute excess free cash flow to their shareholders.
There's a few of them, they become more obvious when the detritus gets hammered and the long term earners rise to the top, however boring they may be. Buy them when others are distressed and gifting them to you at prices below, or well below intrinsic value. Buy the earners, enjoy the long term incomes. The lower the price, the better the yield.
Covid lows were a flash crash, it was over in a few months. Too quick for many to take advantage of. This time is prolonged pain for capital markets, presenting opportunity for long termers to accumulate positions that despite being on paper looking capital bad, are enduring earners that will run for the next decade, at ridiculously low capital entry prices.
Patience, buy market priced distressed long term earners and don't sell them, ever unless they're going bust, which very few are.
You can't talk like this on Sharetrader! Everyone here wants higher prices. Exactly what will guarantee them lower returns.
Percey commends your post on this thread while praying for higher share price on STU.
It's all arse about face.
A decade long deep bear market is what we should pray for. It's just simple math.
Shorts are already reducing in US. This "recession" could be over before it even begins. Markets could turn around big very quickly. Buy in two halves: now and in August/September of this year.
kiora
06-07-2022, 03:42 PM
Not everyone is convinced as we are seeing SP rises on lower than average volumes. Got to get that volume up for there to be more certainty.
Not everyone is convinced as we are seeing SP rises on lower than average volumes. Got to get that volume up for there to be more certainty.
That's true. But it works both ways: a fair few stocks have gone *down* on low volume in this rout.
You can't talk like this on Sharetrader! Everyone here wants higher prices. Exactly what will guarantee them lower returns.
Percey commends your post on this thread while praying for higher share price on STU.
It's all arse about face.
A decade long deep bear market is what we should pray for. It's just simple math.
Utter nonsense.
SailorRob
06-07-2022, 06:58 PM
Utter nonsense.
Which part exactly Ass? We know you don't understand maths but perhaps you can explain.
Everyone here wants higher prices.
Everyone huh. Wow you can read minds!
It's all arse about face.
You must be an intellectual!
A decade long deep bear market is what we should pray for. It's just simple math.
That's the dumbest thing I've read on this forum. I actually commend you, well done!
SailorRob
06-07-2022, 07:54 PM
Utter nonsense.
So you want to pay higher prices for net future cash flows? Interesting.
So mathematically speaking, or in simple terms - for you to obtain more purchasing power in future, you are saying you would prefer a long period of ever increasing prices, rather than a long period of low or declining prices?
And further to that you think it's the dumbest thing you ever heard to want a long period of low prices?
Have a real long think about things before replying and making a public fool of yourself again. And speak with someone who knows how to use a calculator.
So you want to pay higher prices for net future cash flows? Interesting.
So mathematically speaking, or in simple terms - for you to obtain more purchasing power in future, you are saying you would prefer a long period of ever increasing prices, rather than a long period of low or declining prices?
And further to that you think it's the dumbest thing you ever heard to want a long period of low prices?
Have a real long think about things before replying and making a public fool of yourself again. And speak with someone who knows how to use a calculator.
You put words into people's mouths and then argue with them.
This is the dumbest thing I've read on this forum:
A decade long deep bear market is what we should pray for. It's just simple math.
A "decade long deep bear market" is what we should pray for? The stupidity of your statement is obvious, the stupidity needs no explanation.
SailorRob
06-07-2022, 09:13 PM
You put words into people's mouths and then argue with them.
This is the dumbest thing I've read on this forum:
A "decade long deep bear market" is what we should pray for? The stupidity of your statement is obvious, the stupidity needs no explanation.
I should have prefaced it with 'if you want to get rich'. If you don't care about making money then perhaps it's not what you should pray for.
If a business I like has a low enough share price for long enough I might even be able to buy the whole business for myself. But that's the dumbest thing you have ever heard of, oh man you are funny! The stupidity of being able to buy a whole business is obvious????? The stupidity needs no explanation????
Warren at 91 and over 100 billion in personal net worth will certainly be praying for a decade long deep bear market, as will my cousin in his early 20's with only about 15k invested so far. As they both understand math.
If you read baa_baas original post which I replied to you will see they are saying the same thing as I am (the dumbest thing you have ever heard)
Low prices are better than high prices, the lower the longer the more I can buy from Asses who don't get it.
A decade long deep bear market is what we should pray for. It's just simple math.
I just need to keep quoting what you said. It's so stupid that I'm having a great laugh as you try and defend it.
It's like you're from another planet. But luckily not one where the aliens who live there are smarter than humans.
SailorRob
06-07-2022, 09:45 PM
I just need to keep quoting what you said. It's so stupid that I'm having a great laugh as you try and defend it.
It's like you're from another planet. But luckily not one where the aliens who live there are smarter than humans.
Here's one that will really spin you out. If we had a decade long deep bear market, I could possibly buy an entire small new Zealand company and take it private for myself. AND here's the trippy bit Ass, I could use the companies own earnings distributed to me as a dividend to help me buy it.
But that's just dumb.
Peitro
07-07-2022, 06:43 AM
that's just dumb.
Goose
07-07-2022, 06:51 AM
Here's one that will really spin you out. If we had a decade long deep bear market, I could possibly buy an entire small new Zealand company and take it private for myself. AND here's the trippy bit Ass, I could use the companies own earnings distributed to me as a dividend to help me buy it.
But that's just dumb.
Dumb is purposely calling Azz 'Ass'...time to try harder and do better.
bull....
07-07-2022, 07:50 AM
i dont think i would like to experience a 10yr bear market
anyway on to some dumb news the us dollar is higher again today and just to be dumb and throw some statistics out there if you had parked your cash in US dollars near the start of the year you would be up 13% now against the nzd not to bad for a fairly risk free investment. lets hope it continues since its the only game now energy and commodities like we said a short time ago have rolled over and utilities type stocks are beginning too. all hall marks of a bear
alokdhir
07-07-2022, 08:27 AM
i dont think i would like to experience a 10yr bear market
anyway on to some dumb news the us dollar is higher again today and just to be dumb and throw some statistics out there if you had parked your cash in US dollars near the start of the year you would be up 13% now against the nzd not to bad for a fairly risk free investment. lets hope it continues since its the only game now energy and commodities like we said a short time ago have rolled over and utilities type stocks are beginning too. all hall marks of a bear
Hope u remember the story of 3 blind men trying to give their judgement about elephant ....similarly everyone sees what he/she wants to see or think is seeing by interpreting the data on offer in that manner
IMO the market is saying clearly that long term rates have topped out ...normal rates will remain elevated till inflation is fully defeated and that duration is the only debate left depending on how things / data pan out ahead .
If long term rates topped out has 80-90 % certainty then market will try to consolidate in little higher range then its recent lows ...will not be easy to keep getting newer lows ...requirement for a Bear Market .
Valuations of High PE will improve by default as long term rates which are used to value them have topped ...no need for them to have rosier immediate future .
Similarly valuations of high reliable dividend stocks will also improve as long term rates decide that too
Market will shift towards least effected stocks due to lower growth or recession ...like Consumer staples / Healthcare / Utilities for the expected time or till short term rates also have done their dash ....maybe another 3-6 months imo
JohnnyTheHorse
07-07-2022, 08:37 AM
It's not so much a question of how high, but how long will rates stay elevated. Market is far from fully pricing rates staying at these levels for an extended period. It also hasn't priced in a drop of the E part of the equation.
bull....
07-07-2022, 08:39 AM
Hope u remember the story of 3 blind men trying to give their judgement about elephant ....similarly everyone sees what he/she wants to see or think is seeing by interpreting the data on offer in that manner
IMO the market is saying clearly that long term rates have topped out ...normal rates will remain elevated till inflation is fully defeated and that duration is the only debate left depending on how things / data pan out ahead .
If long term rates topped out has 80-90 % certainty then market will try to consolidate in little higher range then its recent lows ...will not be easy to keep getting newer lows ...requirement for a Bear Market .
Valuations of High PE will improve by default as long term rates which are used to value them have topped ...no need for them to have rosier immediate future .
Similarly valuations of high reliable dividend stocks will also improve as long term rates decide that too
Market will shift towards least effected stocks due to lower growth or recession ...like Consumer staples / Healthcare / Utilities for the expected time or till short term rates also have done their dash ....maybe another 3-6 months imo
i didnt know long term rates topped out ? is inflation tamed ( a blip down in inflation is not tamed ) maybe its just a correction from going up so hard and fast ? hindsight we will all know for sure.
Joshuatree
07-07-2022, 08:57 AM
Oil rolled over!We are in oil deficit from now on recession or not.
SailorRob
07-07-2022, 11:43 AM
i dont think i would like to experience a 10yr bear market
anyway on to some dumb news the us dollar is higher again today and just to be dumb and throw some statistics out there if you had parked your cash in US dollars near the start of the year you would be up 13% now against the nzd not to bad for a fairly risk free investment. lets hope it continues since its the only game now energy and commodities like we said a short time ago have rolled over and utilities type stocks are beginning too. all hall marks of a bear
Yeah I did, well long before the start of the year. I don't like holding NZD. Virtually all my net worth in USD and around 20% energy, OXY, ARLP and XOM mostly.
Up massive YTD but luckily still have opportunity to buy cheap stuff, as I've said a 10 year bear market will make me rich.
SailorRob
07-07-2022, 11:48 AM
i dont think i would like to experience a 10yr bear market
anyway on to some dumb news the us dollar is higher again today and just to be dumb and throw some statistics out there if you had parked your cash in US dollars near the start of the year you would be up 13% now against the nzd not to bad for a fairly risk free investment. lets hope it continues since its the only game now energy and commodities like we said a short time ago have rolled over and utilities type stocks are beginning too. all hall marks of a bear
Could you elaborate on why you wouldn't want a 10 year long bear market? Perhaps you are very old and need to spend your capital, in which case it makes sense. Otherwise it doesn't for anyone.
alokdhir
07-07-2022, 11:58 AM
Do all realise that stock markets main purpose is to let Companies raise capital most efficiently and at favourable valuations so that they can carry on their business most profitably ...its called Primary market ....while trading in stocks of those companies with prices fluctuating every minute on stock exchanges is called secondary market and its to provide liquidity or exit options to already invested investors .
Bear markets disturb the primary markets thus the ability of listed companies to raise money for further productive purposes like new factories etc . In bear markets new capital raising dies down thus not helping overall future growth
Primary markets are more important then secondary markets for productive and growth of overall economy but secondary markets are needed to make primary markets more efficient and fair etc .
In a long term Bear market ...Primary markets will almost die so not good for anyone imo
A heck of a relief rally in the 10 year bond rate. All this talk of recession is immediately making traders think that the pending recession will bring rates back down, but of course we haven't had the recession yet to cure inflation, and to do that we need to raise rates. Its like stopping antibiotics before they have started working. And the relief trading coming in between CPI reading, so I suspect could be some volatility when actual measures of core CPI come in.
I had a look back through the last 20 years of 10 year gov bond rates, laid out below. Interesting the last 20 years have been some of the most benign times as well.
SPOT: 3.6%
Last 5 yr ave: 2.06%
Last 10 yr ave: 2.84%
Last 15 yr ave: 3.76%
Last 20 yr ave: 4.32%
I'm using 20yr ave 10yr bond rates when I do my back of the envelope DCF's on companies on my buy list (when I have the motivation and time to do them) so I don't get caught out.
Here's one that will really spin you out. If we had a decade long deep bear market, I could possibly buy an entire small new Zealand company and take it private for myself. AND here's the trippy bit Ass, I could use the companies own earnings distributed to me as a dividend to help me buy it.
But that's just dumb.
A decade-long destruction of wealth? The economic/political environment that caused such a thing would not be pretty. Somehow I don't think your amazing plan to buy an "entire small New Zealand company" would be your focus. More likely your focus would be finding a scrap of bread on the street, or checking that the barricades around your hut are secure.
But if everything is just fine - 10 years of wealth destruction was just some random event - how do you know that year 10 is the end of the bear market? It might be a 20-year bear market. So when exactly are you buying this "entire small New Zealand company"?
SailorRob
07-07-2022, 05:26 PM
A decade-long destruction of wealth? The economic/political environment that caused such a thing would not be pretty. Somehow I don't think your amazing plan to buy an "entire small New Zealand company" would be your focus. More likely your focus would be finding a scrap of bread on the street, or checking that the barricades around your hut are secure.
But if everything is just fine - 10 years of wealth destruction was just some random event - how do you know that year 10 is the end of the bear market? It might be a 20-year bear market. So when exactly are you buying this "entire small New Zealand company"?
Nobody said anything about any destruction of wealth.
Wealth is the amount of goods and services we produce, not numbers on a screen.
The rising 'value' of existing property in NZ has not created a cent of wealth as nothing has been produced.
Rising share prices is not wealth, it's just people paying more for the assets that have identical production as before.
If the sharemarket doubles in 12 Months - no wealth has been created....
Thanks for playing.
SailorRob
07-07-2022, 05:39 PM
Do all realise that stock markets main purpose is to let Companies raise capital most efficiently and at favourable valuations so that they can carry on their business most profitably ...its called Primary market ....while trading in stocks of those companies with prices fluctuating every minute on stock exchanges is called secondary market and its to provide liquidity or exit options to already invested investors .
Bear markets disturb the primary markets thus the ability of listed companies to raise money for further productive purposes like new factories etc . In bear markets new capital raising dies down thus not helping overall future growth
Primary markets are more important then secondary markets for productive and growth of overall economy but secondary markets are needed to make primary markets more efficient and fair etc .
In a long term Bear market ...Primary markets will almost die so not good for anyone imo
Yes a good explanation regarding the function of capital markets.
However I think it's roughly the opposite of the effect you believe in. The massive bull market we have just been through has lead to the least efficient raising of capital not the other way around. As you mentioned productive growth, the high availability of capital and ease of raising (low hurdles) has just turned resources into exercise bikes with ipads on their handle bars and all kinds of ridiculous non productive folly, I could go into enormous detail of the squander of resources due to this fact.
It's when capital is scarce and hard to come by that it is very efficiently allocated and the people raising it make damn sure it will be market driven and productive - the very reason behind the argument of normalising rates.
The counter argument is that when capital is sprayed around like confetti, 90% is wasted but someone will come up with a daft idea that another idiot funds and it actually creates a breakthrough, i.e. if you throw enough, something will stick.
Warren Buffett and Chris Bloomstran would disagree with the notion of bear markets disturbing the allocation of capital to any degree that was a negative for society.
While I would like a market where prices fell 90% and didn't recover, this is not what I'm suggesting as it's unrealistic. I'm suggesting a period of 10 plus years where prices don't reach all time highs and remain below historical averages.
Some of you will recall that to create an average, you need to have some time below it.
As Azz has pointed out, it's in nobody's interest to create a scenario where less goods and services are produced, Azz confuses this with high and low prices which are totally different things.
When the market was priced at the same level in 2012 as in the year 2000... Nobody starved.
Nobody said anything about any destruction of wealth.
Wealth is the amount of goods and services we produce, not numbers on a screen.
The rising 'value' of existing property in NZ has not created a cent of wealth as nothing has been produced.
Rising share prices is not wealth, it's just people paying more for the assets that have identical production as before.
If the sharemarket doubles in 12 Months - no wealth has been created....
Thanks for playing.
I was going to reply, pointing out reasoning and evidence with each line of your ignorance, but I'm just going to let your post stand as it is!
bull....
07-07-2022, 05:46 PM
Could you elaborate on why you wouldn't want a 10 year long bear market? Perhaps you are very old and need to spend your capital, in which case it makes sense. Otherwise it doesn't for anyone.
bear markets are normally associated with recessionary periods therefore business will die while others are born.
so if you have a 10yr bear market how can you guess which business you invest in will be the winner and will survive at the end of the day let alone make up for the time value loss of your money if your pick is wrong.
that is the folly of the argument about invest long term your never lose as your guessing your pick will be a winner
Yes a good explanation regarding the function of capital markets.
However I think it's roughly the opposite of the effect you believe in. The massive bull market we have just been through has lead to the least efficient raising of capital not the other way around. As you mentioned productive growth, the high availability of capital and ease of raising (low hurdles) has just turned resources into exercise bikes with ipads on their handle bars and all kinds of ridiculous non productive folly, I could go into enormous detail of the squander of resources due to this fact.
It's when capital is scarce and hard to come by that it is very efficiently allocated and the people raising it make damn sure it will be market driven and productive - the very reason behind the argument of normalising rates.
The counter argument is that when capital is sprayed around like confetti, 90% is wasted but someone will come up with a daft idea that another idiot funds and it actually creates a breakthrough, i.e. if you throw enough, something will stick.
Warren Buffett and Chris Bloomstran would disagree with the notion of bear markets disturbing the allocation of capital to any degree that was a negative for society.
While I would like a market where prices fell 90% and didn't recover, this is not what I'm suggesting as it's unrealistic. I'm suggesting a period of 10 plus years where prices don't reach all time highs and remain below historical averages.
Some of you will recall that to create an average, you need to have some time below it.
As Azz has pointed out, it's in nobody's interest to create a scenario where less goods and services are produced, Azz confuses this with high and low prices which are totally different things.
When the market was priced at the same level in 2012 as in the year 2000... Nobody starved.
I'm so glad to be mentioned along with your mate Warren Buffett! And you put words into both our mouths! I'm elated!
And the most ridiculous non productive folly I can think of: is you!
SailorRob
07-07-2022, 05:54 PM
bear markets are normally associated with recessionary periods therefore business will die while others are born.
so if you have a 10yr bear market how can you guess which business you invest in will be the winner and will survive at the end of the day let alone make up for the time value loss of your money if your pick is wrong.
that is the folly of the argument about invest long term your never lose as your guessing your pick will be a winner
You don't need to pick. Just buy an index that owns the lot, or in my case, Berkshire and Markel.
You don't need to pick. Just buy an index that owns the lot, or in my case, Berkshire and Markel.
What happened to buying an entire small New Zealand company and taking it private during a ten-year bear market?
You don't need to pick. Just buy an index that owns the lot, or in my case, Berkshire and Markel.
I'm also wondering, if you would explain please, what happens to "an index that owns the lot" for the ten years of a ten-year bear market?
SailorRob
07-07-2022, 06:33 PM
I'm also wondering, if you would explain please, what happens to "an index that owns the lot" for the ten years of a ten-year bear market?
It becomes very cheap and then it stays very cheap.
As I'm purchasing future cash flows, the less I pay for them the richer I get.
The index that owns the lot will also spit out cash (the dividend during the Great Depression reached 13%), so using cash flows produced by the index I would buy more of it.
Taking a company private was an example of the effect I'm trying to explain, Steel and Tube traded around 86 million dollars in March 2020 and thus was selling for less than the value of the Steel on the shelf less all liabilities (so you got the property and name and vehicles for free), if it became cheaper still and stayed cheap then it would be possible for a small group to buy a controlling stake and teach them how to allocate capital.
The cash flows produced by most businesses would not materially be affected in the bear market as the goods and services they produce would increase.
Let me try another angle with you as this is tough. If you were trying to buy every house on a street of 20 houses and you owned 2 (so you could do a development or something), would you rather the value of them all shot up so you could feel good as you had more 'money' as your two houses had doubled in value, or would you rather thy collapsed in price but rent was still getting paid and then over time you could buy the other 18 dirt cheap.
Azz, don't embarrass yourself, think this through.
It becomes very cheap and then it stays very cheap.
As I'm purchasing future cash flows, the less I pay for them the richer I get.
The index that owns the lot will also spit out cash (the dividend during the Great Depression reached 13%), so using cash flows produced by the index I would buy more of it.
Taking a company private was an example of the effect I'm trying to explain, Steel and Tube traded around 86 million dollars in March 2020 and thus was selling for less than the value of the Steel on the shelf less all liabilities (so you got the property and name and vehicles for free), if it became cheaper still and stayed cheap then it would be possible for a small group to buy a controlling stake and teach them how to allocate capital.
The cash flows produced by most businesses would not materially be affected in the bear market as the goods and services they produce would increase.
Let me try another angle with you as this is tough. If you were trying to buy every house on a street of 20 houses and you owned 2 (so you could do a development or something), would you rather the value of them all shot up so you could feel good as you had more 'money' as your two houses had doubled in value, or would you rather thy collapsed in price but rent was still getting paid and then over time you could buy the other 18 dirt cheap.
Azz, don't embarrass yourself, think this through.
No, what will happen during the 10 years is, each year your index investment will be worth LESS than the previous year as it is an index to the BEAR MARKET. It's literally the worst investment you can make during the devastation of a 10-year bear market! You're completely clueless!
SailorRob
07-07-2022, 06:56 PM
No, what will happen during the 10 years is, each year your index investment will be worth LESS than the previous year as it is an index to the BEAR MARKET. It's literally the worst investment you can make during the devastation of a 10-year bear market! You're completely clueless!
I think 'becomes very cheap' and 'will be worth less' are the same thing Azz.
SailorRob
07-07-2022, 07:00 PM
No, what will happen during the 10 years is, each year your index investment will be worth LESS than the previous year as it is an index to the BEAR MARKET. It's literally the worst investment you can make during the devastation of a 10-year bear market! You're completely clueless!
Yes each year it will be worth less, and thus I can buy more - with distributed cash and my own earnings - for less.
Thus after 10 years I will own more shares of the index than if there had been a bull market.
Now as I will own more shares of the index, I own more of the production of the world and thus I am richer.
More of the future cash flows will come to me than before.
You are confusing current value of stock portfolios with future cash flows.
I think 'becomes very cheap' and 'will be worth less' are the same thing Azz.
Every minute of the 10 years you're indexed to the bear market you are losing money.
Mrbuyit
07-07-2022, 07:11 PM
Unless yield is spectacular just buy all the stock you want in year 10 to save the losses from previous 9 years?
Yes each year it will be worth less, and thus I can buy more - with distributed cash and my own earnings - for less.
Thus after 10 years I will own more shares of the index than if there had been a bull market.
Now as I will own more shares of the index, I own more of the production of the world and thus I am richer.
More of the future cash flows will come to me than before.
You are confusing current value of stock portfolios with future cash flows.
Current value is a real number. And in your "invest in the 10-year Bear Market Index" plan, each year current value will be less than the pervious year. Future cash flows only exist in your head, as daydreams.
Unless yield is spectacular just buy all the stock you want in year 10 to save the losses from previous 9 years?
But nobody knows, during year 10, that year 10 is the end of the bear market!
SailorRob
07-07-2022, 07:14 PM
Every minute of the 10 years you're indexed to the bear market you are losing money.
Yes but you are gaining far more.
It's like filling your tank with petrol at $3 a liter and then the price falls to $50c a liter and stays there. You are not focused on all the money you lost on the expensive petrol in your tank. You rejoice at the cheap fuel you get over the next 10 years.
This is why Warren prays for a 50% crash in any stock he has just bought - like the Washington Post. Best thing that could happen to him. Obviously better if it crashed before he bought to start with.
You will feel like you're losing money as you watch numbers and colors on your phone buy you are getting the chance to buy future money for less.
SailorRob
07-07-2022, 07:16 PM
But nobody knows, during year 10, that year 10 is the end of the bear market!
We must PRAY that it is not the end.
Even if prices never recover you will still be extremely rich, after loading up on cheap stocks for years your dividends will be massive, just a massive gusher of cash pouring in.
You are buying future dividends for less.
Unless yield is spectacular just buy all the stock you want in year 10 to save the losses from previous 9 years?
And it's highly likely that this idea has already been tried in, say, year 3, year 5, year 8! etc - ie, buying more and more all the way down for 10 years and occasionally buying even more because the end of the bear has been called!
SailorRob
07-07-2022, 07:17 PM
Current value is a real number. And in your "invest in the 10-year Bear Market Index" plan, each year current value will be less than the pervious year. Future cash flows only exist in your head, as daydreams.
Future cash flows are daydreams if the future production of goods and services are also.
Yes but you are gaining far more.
It's like filling your tank with petrol at $3 a liter and then the price falls to $50c a liter and stays there. You are not focused on all the money you lost on the expensive petrol in your tank. You rejoice at the cheap fuel you get over the next 10 years.
This is why Warren prays for a 50% crash in any stock he has just bought - like the Washington Post. Best thing that could happen to him. Obviously better if it crashed before he bought to start with.
You will feel like you're losing money as you watch numbers and colors on your phone buy you are getting the chance to buy future money for less.
You DO NOT want to be in stocks, especially indexed ones, during a 10-year bear market! It's not rocket science. You will be broke! Most of those stocks will NEVER recover. A 10-year downward market is CARNAGE.
SailorRob
07-07-2022, 07:23 PM
You DO NOT want to be in stocks, especially indexed ones, during a 10-year bear market! It's not rocket science. You will be broke! Most of those stocks will NEVER recover. A 10-year downward market is CARNAGE.
Speak for yourself. I most certainly will not be broke! And I have virtually 100% of my net worth in Stocks.
Future cash flows are daydreams if the future production of goods and services are also.
The reason a 10-year bear market would be happening is because of economic destruction. Companies going bankrupt all over the place, mass unemployment, civil unrest, and the like. All those stocks going down FOR 10 YEARS will be because cash flows, present and future, are either non-existent or massively reduced.
Speak for yourself. I most certainly will not be broke! And I have virtually 100% of my net worth in Stocks.
Do you understand that a stock worth $3 today and then $1.50 a year later and then $1 a year later again is a bad thing if you bought it at any price above $1? And especially more so if the bear market continues for another 8 years?!
SailorRob
07-07-2022, 07:31 PM
Do you understand that a stock worth $3 today and then $1.50 a year later and then $1 a year later again is a bad thing if you bought it at any price above $1? And especially more so if the bear market continues for another 8 years?!
I do not understand that no.
As long as future cash flows are robust it is a very great thing.
Just like Steel and Tube.
I bought in the 80's and it fell into the 50's GREAT THING. I loaded up and used it's dividends. Then I owned MORE SHARES than I would otherwise have.
SailorRob
07-07-2022, 07:32 PM
The reason a 10-year bear market would be happening is because of economic destruction. Companies going bankrupt all over the place, mass unemployment, civil unrest, and the like. All those stocks going down FOR 10 YEARS will be because cash flows, present and future, are either non-existent or massively reduced.
Wrong again.
Many countries have 20 year bear markets, totally normal.
New Zealand only recovered from 1987 in 2017 in fact. A 30 year bear market.
I do not understand that no.
As long as future cash flows are robust it is a very great thing.
Just like Steel and Tube.
I bought in the 80's and it fell into the 50's GREAT THING. I loaded up and used it's dividends. Then I owned MORE SHARES than I would otherwise have.
I reckon you're 50 sandwiches short of a picnic.
Wrong again.
Many countries have 20 year bear markets, totally normal.
New Zealand only recovered from 1987 in 2017 in fact. A 30 year bear market.
Was it really a bear? Share prices falling for 30 years? Or was it static. Two different things.
despite the show I reckon Azz & SailorRob are actually best mates
SailorRob
07-07-2022, 07:45 PM
Was it really a bear? Share prices falling for 30 years? Or was it static. Two different things.
So a bear market means share prices constantly falling?
Do you have a reference for that definition?
It was a market where prices did not regain their highs for 30 years...
So a bear market means share prices constantly falling?
Do you have a reference for that definition?
It was a market where prices did not regain their highs for 30 years...
You don't even know what a bear market is lol !
SailorRob
07-07-2022, 07:47 PM
Was it really a bear? Share prices falling for 30 years? Or was it static. Two different things.
I would prefer your definition however as I would like to scoop up NZ factories, farms, ports and infrastructure as cheap as I could get it.
It was a market where prices did not regain their highs for 30 years...
That's NOT a bear market.
SailorRob
07-07-2022, 07:47 PM
You don't even know what a bear market is lol !
Lol, lollll please educate me by defining it. Not much to ask.
SailorRob
07-07-2022, 07:49 PM
despite the show I reckon Azz & SailorRob are actually best mates
It's getting to the point where the only rational explanation would be that this was a big wind up yes.
I would prefer your definition however as I would like to scoop up NZ factories, farms, ports and infrastructure as cheap as I could get it.
It's not "my" definition. It doesn't surprise me that you don't actually know what a bear market is.
Let's make that 100 sandwiches short.
Lol, lollll please educate me by defining it. Not much to ask.
But you don't know, do you. You have no clue what a bear market is.
So a bear market means share prices constantly falling?
YES.
Do you have a reference for that definition?
hahahahahaha !
SailorRob
07-07-2022, 07:52 PM
But you don't know, do you. You have no clue what a bear market is.
Be a sport and educate us all.
SailorRob
07-07-2022, 07:55 PM
YES.
hahahahahaha !
Ok that's not my definition nor is it the consensus definition. But let's play your silly little games and pretend that it is the definition.
This suits my argument even better.
All the Ports, farms, infrastructure, air ports, fuel terminals, retirement complexes, distribution companies...
Constantly getting cheaper and cheaper. Sounds good to me.
Perhaps one day they would just give it all to me!
despite the show I reckon Azz & SailorRob are actually best mates
No, we're certainly not.
And please, any newbies to investment here on this forum: DO NOT - I repeat - DO NOT invest in SailorRob's "10-year Bear Market Index" fund.
Ok that's not my definition nor is it the consensus definition. But let's play your silly little games and pretend that it is the definition.
This suits my argument even better.
All the Ports, farms, infrastructure, air ports, fuel terminals, retirement complexes, distribution companies...
Constantly getting cheaper and cheaper. Sounds good to me.
Perhaps one day they would just give it all to me!
You're completely wrong. A bear market is share prices going one way over time: down. It is not a "static" market. It is not "the time to recover to a former high".
SailorRob
07-07-2022, 08:04 PM
No, we're certainly not.
And please, any newbies to investment here in this forum: DO NOT - I repeat - DO NOT invest in SailorRob's "10-year Bear Market Index" fund.
That's a good point Azz.
Currently I am helping my cousin who has a few thousand dollars to invest, he's 23. Does it matter where the market is right now, if he's investing his money in a very high or low market?
Not really as it will make very little difference in the long run.
What will matter is what the market does over the next 20 years while he builds his portfolio.
And what would be best for him? High prices and expensive markets or low constantly falling prices and cheap markets?
Luckily the newbies can understand this simple math.
SailorRob
07-07-2022, 08:06 PM
You're completely wrong. A bear market is share prices going one way over time: down. It is not a "static" market. It is not "the time to recover to a former high".
There is no fixed definition but it is generally accepted for example that the Nikkei has been in a bear market for 30 years.
The definition is definitely not constantly falling prices.
That's a good point Azz.
Currently I am helping my cousin who has a few thousand dollars to invest, he's 23. Does it matter where the market is right now, if he's investing his money in a very high or low market?
Not really as it will make very little difference in the long run.
What will matter is what the market does over the next 20 years while he builds his portfolio.
And what would be best for him? High prices and expensive markets or low constantly falling prices and cheap markets?
Luckily the newbies can understand this simple math.
Strawman!
We're not talking about NOW, which is obviously not several years into what will eventually become a decade-long bear market. And in fact I went back into my growth fund, and stated so publicly here on this site.
There is no fixed definition but it is generally accepted for example that the Nikkei has been in a bear market for 30 years.
The definition is definitely not constantly falling prices.
No, there is an actual definition, which is constantly falling prices. That is what a bear market is. It's just not "fixed" in *your* mind.
SailorRob
07-07-2022, 08:13 PM
Strawman!
We're not talking about NOW, which is obviously not several years into what will eventually become a decade-long bear market. And in fact I went back into my growth fund, and stated so publicly here on this site.
Several years into would be much better as his original purchase would then buy more shares.
SailorRob
07-07-2022, 08:14 PM
No, there is an actual definition, which is constantly falling prices. That is what a bear market is. It's just not "fixed" in *your* mind.
Can you reference this definition, thanks.
Can you reference this definition, thanks.
Because you're so truly vacuous you can't do it yourself?
While you're googling, how about you find out what a *bull* market is. You probably have the definition for that wrong too!
Several years into would be much better as his original purchase would then buy more shares.
More shares of companies that during the 10-YEAR bear market go broke!
SailorRob
07-07-2022, 08:24 PM
More shares of companies that during the 10-YEAR bear market go broke!
I don't follow I'm sorry.
I have looked up many definitions. None fits with yours.
I don't follow I'm sorry.
I have looked up many definitions. None fits with yours.
I can't wait to hear your definition of a bull market!
Peitro
07-07-2022, 09:00 PM
Dear god the quality on this forum has deteriorated. SailorRob, please do not procreate.
i didnt know long term rates topped out ? is inflation tamed ( a blip down in inflation is not tamed ) maybe its just a correction from going up so hard and fast ? hindsight we will all know for sure.
Yep hindsight is great. Time will tell.
If it is a blip Bull....; then the next rally has to go past long term interest rates (10 year) previous high of 4.59% on June 19th as of today it is 3.8% and still falling.
Two things of conflicting interest at the moment..
1..The media is still beating "the rising interest rates in NZ" drum when clearly it has been falling for the last 2 weeks" See interest.co.nz (https://www.interest.co.nz/charts/interest-rates/swap-rates)..Peoples expectation is for interest rates to keep on rising.
2..The market could be having a breather or it could be that there is a yet to be confirmed recession and this is having a down pressure effect and the Market interest rates have topped out.
One dilemma thing.
1..The market rates are close to inverting..Will the Reserve Bank want to continue hard and fast raising of the OCR and possibly cause inverting the Market yield curve...Does it matter?
Is this just a NZ thing?
No The US 30 year Treasury rate (https://ycharts.com/indicators/2_year_treasury_rate) is falling (not in a down trend to date).. so are the shorter term rates (2 year rate (https://ycharts.com/indicators/2_year_treasury_rate)).
Dear god the quality on this forum has deteriorated. SailorRob, please stay here and do not migrate.
Unless your second sentence is sarcasm, you post does not make sense!
Baa_Baa
07-07-2022, 09:40 PM
If you're not excited about a once in a long time depressed equity prices, and you're a long term investor then you're not paying attention to the market that's gifting you entry and top up prices that come around very infrequently. The traders that are focused only on capital gains/losses can do whatever they want, it's not relevant to us.
Periodically the market price guts itself on fear or whatever, it doesn't really matter what that whatever is. It's gifting you low entry equity prices. The only decision is whether you accumulate what you've already got, buy in to something new, or wait a bit longer in case those equities are cheaper later on.
You're inherently buying free cash flow distributions for X years, it's as simple as that. Get your head around that and you'll understand long term. Match that with patience and you'll be successful. The cheaper you do that, the better off you will be.
You've never made a a loss unless you sell at a loss. Long term profits are realised on long term positions, that means you have have no intention to sell and your paper position is of no matter or consequence as the earnings flow into your bank account.
One day your earnings will have fully paid for your your capital investment, and from then on it's gravy.
If you're not excited about a once in a long time depressed equity prices, and you're a long term investor then you're not paying attention to the market that's gifting you entry and top up prices that come around very infrequently. The traders that are focused only on capital gains/losses can do whatever they want, it's not relevant to us.
Periodically the market price guts itself on fear or whatever, it doesn't really matter what that whatever is. It's gifting you low entry equity prices. The only decision is whether you accumulate what you've already got, buy in to something new, or wait a bit longer in case those equities are cheaper later on.
You're inherently buying free cash flow distributions for X years, it's as simple as that. Get your head around that and you'll understand long term. Match that with patience and you'll be successful. The cheaper you do that, the better off you will be.
You've never made a a loss unless you sell at a loss. Long term profits are realised on long term positions, that means you have have no intention to sell and your paper position is of no matter or consequence as the earnings flow into your bank account.
One day your earnings will have fully paid for your your capital investment, and from then on it's gravy.
Agree! But our timings may be different, I don't know. And I'm not so in love with stocks they can't be sold if the market is looking shaky - but over the years I'm very much long term until a portfolio re-jig is in order.
I've bought now (in last month or so); and second tranche planned for August/September. I'm thinking there will be a major rally in stocks.
I also bought a couple too soon on the way down.
Prior to crash I was cash cash, and growth fund, and no individual stocks; then moved fund to cash fund after about 5% losses of total possible if I had held in growth (predicted downturn; was lucky); then returned to growth fund very recently and down 1% since that move. All-up, so far, I'm very happy with results. I know some people have been hit HARD.
SailorRob
07-07-2022, 10:21 PM
Damn that took a long time. You're better at explaining than I am Baa_Baa.
Damn that took a long time. You're better at explaining than I am Baa_Baa.
I'm pretty sure he's not talking about looking forward to TEN YEARS of falling stock prices.
bull....
08-07-2022, 06:49 AM
If you're not excited about a once in a long time depressed equity prices, and you're a long term investor then you're not paying attention to the market that's gifting you entry and top up prices that come around very infrequently. The traders that are focused only on capital gains/losses can do whatever they want, it's not relevant to us.
Periodically the market price guts itself on fear or whatever, it doesn't really matter what that whatever is. It's gifting you low entry equity prices. The only decision is whether you accumulate what you've already got, buy in to something new, or wait a bit longer in case those equities are cheaper later on.
You're inherently buying free cash flow distributions for X years, it's as simple as that. Get your head around that and you'll understand long term. Match that with patience and you'll be successful. The cheaper you do that, the better off you will be.
You've never made a a loss unless you sell at a loss. Long term profits are realised on long term positions, that means you have have no intention to sell and your paper position is of no matter or consequence as the earnings flow into your bank account.
One day your earnings will have fully paid for your your capital investment, and from then on it's gravy.
again you fail to mention the fact that not all long term investments are successful :confused:
alokdhir
08-07-2022, 07:35 AM
Place to hide for next 2 years or so is High Dividend stocks with reliable dividends in recessionary times .
Lets put our heads together to provide a list of 10 top NZX high quality dividend stocks which can reliably maintain dividend ahead too
GNE , ARG , HGH ? , WHS ? , CEN , SPK , etc
percy
08-07-2022, 08:01 AM
Perhaps add STU and TRA.
On USX [unlisted]..SFF .
mike2020
08-07-2022, 08:29 AM
What about PGW? High div, too cyclical?
not all long term investments are successful
Damn straight.
And if you don't get rid of them, they fundamentally screw up your portfolio. Case in point, my sale of A2 Milk near ATH saved me/made me a lot of money both from not holding a stock that eventually collapsed, but also the capital that was freed up I used for other investments, all of which have done considerably better than A2 Milk. The other way, how I learned from failure: in my earlier days, holding long on losing stocks, dollar cost averaging on losing stocks.
bull....
08-07-2022, 08:46 AM
Damn straight.
And if you don't get rid of them, they fundamentally screw up your portfolio. Case in point, my sale of A2 Milk near ATH saved me/made me a lot of money both from not holding a stock that eventually collapsed, but also the capital that was freed up I used for other investments, all of which have done considerably better than A2 Milk. The other way, how I learned from failure: in my earlier days, holding long on losing stocks, dollar cost averaging on losing stocks.
to right ... good tips
thats what baabaa and sailor rob fail to comprehend in there arguments
they think all long term investments are winners lol
bull....
08-07-2022, 09:14 AM
Yep hindsight is great. Time will tell.
If it is a blip Bull....; then the next rally has to go past long term interest rates (10 year) previous high of 4.59% on June 19th as of today it is 3.8% and still falling.
my thinking is the US 10yr is still trading sideways channel from 2011.
the run to 4.59 was an attempted breakout of the range , which has failed but could still be attempted again.
as of today bonds have jumped back above 3% last couple days and the yield curve has steepened so no inversion yet again. so more work for the fed to do
SailorRob
08-07-2022, 09:17 AM
to right ... good tips
thats what baabaa and sailor rob fail to comprehend in there arguments
they think all long term investments are winners lol
Lol lol... Businesses in aggregate will be winners. You don't need to be able to pick individual companies.
Those of us with the ability to pick successful individual companies which will be winners under most any circumstances will do well.
Baa_Baa
08-07-2022, 09:40 AM
to right ... good tips
thats what baabaa and sailor rob fail to comprehend in there arguments
they think all long term investments are winners lol
The example given was A2, which is not an investment, it pays nothing to its shareholders. It does not distribute any cash or profits to shareholders. It is not an example of a long term investment.
And Bull**** I’m not writing the investors guide to guaranteed success, I’m just pointing out some basic mindsets of long term investment. Doesn’t mean we can’t have a few punts and specs as well, only that we know the difference.
bull....
08-07-2022, 09:43 AM
Lol lol... Businesses in aggregate will be winners. You don't need to be able to pick individual companies.
Those of us with the ability to pick successful individual companies which will be winners under most any circumstances will do well.
of course you need to pick winners. thats how buffett got so rich. he invested in a small collection of companies he considered long term winners and reinvested the div's etc and the important bit he cut the duds from his portfolio if they didnt perform or situation changed and it warranted it. i forgot to mention buffet used heaps of leverage to on his winners
he did not just buy anything and hold for ever saying im going to be rich if i hold long term
bull....
08-07-2022, 09:46 AM
The example given was A2, which is not an investment, it pays nothing to its shareholders. It does not distribute any cash or profits to shareholders. It is not an example of a long term investment.
what would have you called a2 if everything panned out right and they were still $20 and were now paying div's.?
i would call it a great long term investment
hence my point again and as azz has said long term investment means cutting your dud's or taking gains if the senario changes as was a2 and reinvesting in your next guess
Baa_Baa
08-07-2022, 10:16 AM
what would have you called a2 if everything panned out right and they were still $20 and were now paying div's.?
i would call it a great long term investment
I would call that first part, buying it, as speculative buying a growth company based purely on continued capital gains. Which happened until it didn't, then you'd sell before taking too much of a loss of your capital gains, and paying the trading fees and taxes on the profit. They never got to paying a dividend so that's purely academic.
hence my point again and as azz has said long term investment means cutting your dud's or taking gains if the senario changes as was a2 and reinvesting in your next guess
Yes agree about cutting the "dud's", I didn't mention it as I'm not writing a guide book, nor could I, but a "dud" long term investment is one where the earnings, payouts, dividends are falling or stop. It is not just because the share market is capital pricing it lower.
despite the show I reckon Azz & SailorRob are actually best mates
Maybe SailorRob has two logins and computers ?
SailorRob
08-07-2022, 10:33 AM
of course you need to pick winners. thats how buffett got so rich. he invested in a small collection of companies he considered long term winners and reinvested the div's etc and the important bit he cut the duds from his portfolio if they didnt perform or situation changed and it warranted it. i forgot to mention buffet used heaps of leverage to on his winners
he did not just buy anything and hold for ever saying im going to be rich if i hold long term
So I think one of your points is that if you keep investing in a company that is a 'loser' during a long period of falling prices - a loser being a company that future cash flows will be inadequate for whatever reason, then that will be a disaster. You are right about that.
But you definitely don't need to be able to pick winners at all. All you need in fact is average equity market returns which is harder to achieve than it looks.
With average returns most of us will easily be able to achieve a net worth north of 40 million if we live to 75. But with a long period of low prices then we will be able to achieve far better than average long term results if we are lucky to get such an opportunity.
So assuming you can't pick winners (just to take that out of the discussion) what you want is to be able to buy future cash flows cheaply now which is what investing through a long deep bear market will give you (if you just invest in the whole market through a index fund).
It's a 5 minute exercise to build a spreadsheet which will prove what we're saying is true.
Now many people can pick winners and will have even better results. I'm currently at the beginning of looking into BASF the worlds biggest chemicals company. It's paying around a 9% dividend and buying in stock at about the same level. So paying out in cash a high teens percentage. Now if I buy that tomorrow then all I can pray for is that it keeps falling in price (as long as the business is not long term impaired). If it stays cheap for 10 years then the money from dividends I get I can buy crap loads more of it as well as them buying in shares at very cheap prices. You can EASILY build a spreadsheet that will show you that you will make far more money this way than if you buy it and it doubles in the next 3 Months. That's the last thing I want to see.
It's hard to believe that we are arguing about it being better to invest in a bear market than a bull market, no disrespect intended but it's opinions like yours which allow equity like returns at exist.
Nobody in the history of the world has displayed a long term outperformance record by applying technical analysis to the US 10 year bond yield and then applying what they interpret to knowing when to get in and out of the market. But people still do it, and it's stuff like this and other nonsense that allows others like me to just keep buying cheap stocks.
SailorRob
08-07-2022, 10:37 AM
Maybe SailorRob has two logins and computers ?
Even if I was taking a cocktail of drugs to to Keith Richards proud I would not have the ability of even dreaming up the crap to post under my Azz alias. Pushing bitcoin would make me physically sick.
winner69
08-07-2022, 10:51 AM
ANZ Truckometer update
Figure 3 below shows that the Heavy Traffic Index was flat overall in Q2, suggesting, all else equal, that GDP may have been too.
SailorRob
08-07-2022, 11:03 AM
ANZ Truckometer update
Figure 3 below shows that the Heavy Traffic Index was flat overall in Q2, suggesting, all else equal, that GDP may have been too.
Would that suggest nominal GDP may have been flat, in other words real GDP could be considerably negative?
Balance
08-07-2022, 11:05 AM
Would that suggest nominal GDP may have been flat, in other words real GDP could be considerably negative?
Good point.
see weed
08-07-2022, 11:07 AM
I would call that first part, buying it, as speculative buying a growth company based purely on continued capital gains. Which happened until it didn't, then you'd sell before taking too much of a loss of your capital gains, and paying the trading fees and taxes on the profit. They never got to paying a dividend so that's purely academic.
Yes agree about cutting the "dud's", I didn't mention it as I'm not writing a guide book, nor could I, but a "dud" long term investment is one where the earnings, payouts, dividends are falling or stop. It is not just because the share market is capital pricing it lower.
I don't hold any a2 at the moment. Had been trading them since July 2014. I like round figures and would buy in 15,000 to 25,000 at a time. The most a2 I owned at any one time was 357,000 shares. Anyway, when they started the big slide 2 years ago I started trading and selling very fast but decided to keep my last 20,000 long term. I got a bit worried and sold them for $5.76c a bit over a year ago for only $105,200 profit, I owned them a bit over 6 years. Now if I had of sold them at $21 the profit would of been $410,000. So sometimes trading does pay off.
bull....
08-07-2022, 11:23 AM
So I think one of your points is that if you keep investing in a company that is a 'loser' during a long period of falling prices - a loser being a company that future cash flows will be inadequate for whatever reason, then that will be a disaster. You are right about that.
But you definitely don't need to be able to pick winners at all. All you need in fact is average equity market returns which is harder to achieve than it looks.
With average returns most of us will easily be able to achieve a net worth north of 40 million if we live to 75. But with a long period of low prices then we will be able to achieve far better than average long term results if we are lucky to get such an opportunity.
So assuming you can't pick winners (just to take that out of the discussion) what you want is to be able to buy future cash flows cheaply now which is what investing through a long deep bear market will give you (if you just invest in the whole market through a index fund).
It's a 5 minute exercise to build a spreadsheet which will prove what we're saying is true.
Now many people can pick winners and will have even better results. I'm currently at the beginning of looking into BASF the worlds biggest chemicals company. It's paying around a 9% dividend and buying in stock at about the same level. So paying out in cash a high teens percentage. Now if I buy that tomorrow then all I can pray for is that it keeps falling in price (as long as the business is not long term impaired). If it stays cheap for 10 years then the money from dividends I get I can buy crap loads more of it as well as them buying in shares at very cheap prices. You can EASILY build a spreadsheet that will show you that you will make far more money this way than if you buy it and it doubles in the next 3 Months. That's the last thing I want to see.
It's hard to believe that we are arguing about it being better to invest in a bear market than a bull market, no disrespect intended but it's opinions like yours which allow equity like returns at exist.
Nobody in the history of the world has displayed a long term outperformance record by applying technical analysis to the US 10 year bond yield and then applying what they interpret to knowing when to get in and out of the market. But people still do it, and it's stuff like this and other nonsense that allows others like me to just keep buying cheap stocks.
okay under your system how do you account for your future cashflows being disrupted , if say economic conditions or something else happens. buy more ? or ditch it and wouldnt your future cashflows need to out perform inflation in the long run to make you truely wealthy.
buy the way i get that too you andd baabaa capital doesnt really matter in the long run
also about the 10yr bond thing its easier to say this happened with something tangible to look at rather than say i think someone at the fed decided bonds had gone up to fast without any prove
Baa_Baa
08-07-2022, 11:36 AM
okay under your system how do you account for your future cashflows being disrupted , if say economic conditions or something else happens. buy more ? or ditch it and wouldnt your future cashflows need to out perform inflation in the long run to make you truely wealthy.
buy the way i get that too you andd baabaa capital doesnt really matter in the long run
Just to be clear, my portfolio contains a mix of long term investments that pay dividends, growth companies that I only want increased capital value and SP, speculative companies that I think might one day be very successful.
I'm not saying it's all about one thing or the other, merely trying to draw a distinction between a long term investment mindset and strategy as opposed to a capital appreciation mindset.
The only reason I chimed in on this is because falling market prices are a great opportunity to acquire or accumulate the long term equity assets at low market prices.
SailorRob
08-07-2022, 11:41 AM
okay under your system how do you account for your future cashflows being disrupted , if say economic conditions or something else happens. buy more ? or ditch it and wouldnt your future cashflows need to out perform inflation in the long run to make you truely wealthy.
buy the way i get that too you andd baabaa capital doesnt really matter in the long run
also about the 10yr bond thing its easier to say this happened with something tangible to look at rather than say i think someone at the fed decided bonds had gone up to fast without any prove
Pretty difficult to understand your grammar Bull, it's not even 12 o'clock yet mate.
So with my example of the businesses in aggregate - so with as NZ50 index fund or SPY then the cash flows are going to be what they will be, if cash flows are disrupted then everything else will perform worse. Cash flows of businesses in aggregate will always exceed inflation in the long run for obvious reason.
If cash flows will be whatever they will be then logically I want to purchase them as cheaply a possible.
For me Capital is the only thing that actually matters in the long run.
It's not 'my system' its just math. I didn't invent basic arithmetic.
bull....
08-07-2022, 11:58 AM
Pretty difficult to understand your grammar Bull, it's not even 12 o'clock yet mate.
So with my example of the businesses in aggregate - so with as NZ50 index fund or SPY then the cash flows are going to be what they will be, if cash flows are disrupted then everything else will perform worse. Cash flows of businesses in aggregate will always exceed inflation in the long run for obvious reason.
If cash flows will be whatever they will be then logically I want to purchase them as cheaply a possible.
For me Capital is the only thing that actually matters in the long run.
It's not 'my system' its just math. I didn't invent basic arithmetic.
when you do the hrs i do grammer never that good lol anyway time to go done my days work.
of course you need to pick winners. thats how buffett got so rich. he invested in a small collection of companies he considered long term winners and reinvested the div's etc and the important bit he cut the duds from his portfolio if they didnt perform or situation changed and it warranted it. i forgot to mention buffet used heaps of leverage to on his winners
he did not just buy anything and hold for ever saying im going to be rich if i hold long term
He also bought preferred stock and got seats on boards. Not things many people here can do I'd say.
With average returns most of us will easily be able to achieve a net worth north of 40 million if we live to 75. But with a long period of low prices then we will be able to achieve far better than average long term results if we are lucky to get such an opportunity.
You're an investing genius. Your mate Warren Buffett must phone you up all the time, for advice!
falling market prices are a great opportunity to acquire or accumulate the long term equity assets at low market prices.
Absolutely agree.
But what's your opinion on a TEN-YEAR bear market? You would look forward to that? You want that?
SailorRob
08-07-2022, 12:46 PM
He also bought preferred stock and got seats on boards. Not things many people here can do I'd say.
Interestingly Buffett originally got rich by buying companies like Steel and Tube at 50c.
Deep value cigar butt investing.
Having a seat on the board as he has told us many times is the very last thing you want as an investor. Massive advantage not to be on the board.
Here is a direct Buffett quote from the 2001 Berkshire meeting afternoon session;
You can say it’s a mistake for us to be directors of companies, because we give up huge amount of flexibility in investment because we are directors. And there’s no question that we do.
If you’re thinking solely of making money, you do not want to be a director of any company. So there’s just no question about that.
SailorRob
08-07-2022, 12:48 PM
You're an investing genius. Your mate Warren Buffett must phone you up all the time, for advice!
Point is you don't need to be. Just investing everything into an index fund will see you incredibly wealthy.
If on the other hand you can buy bitcoin and time the market like some, then you will do even better.
Interestingly Buffett originally got rich by buying companies like Steel and Tube at 50c.
Deep value cigar butt investing.
Having a seat on the board as he has told us many times is the very last thing you want as an investor. Massive advantage not to be on the board.
Here is a direct Buffett quote from the 2001 Berkshire meeting afternoon session;
You can say it’s a mistake for us to be directors of companies, because we give up huge amount of flexibility in investment because we are directors. And there’s no question that we do.
If you’re thinking solely of making money, you do not want to be a director of any company. So there’s just no question about that.
What he says and what he does are two different things. The companies purchased outright, are managed blind and no representation? The companies with huge stakes, again done blind? I don't think so lol! And the preferred-stock plays are done for a reason: when suckers like you lose out he gets special benefits!
Point is you don't need to be. Just investing everything into an index fund will see you incredibly wealthy.
If on the other hand you can buy bitcoin and time the market like some, then you will do even better.
I'm pro index funds. I've been trying to explain to you, amongst other bleedingly obvious concepts, that a TEN-YEAR bear market would destroy index funds.
SailorRob
08-07-2022, 01:08 PM
I'm pro index funds. I've been trying to explain to you, amongst other bleedingly obvious concepts, that a TEN-YEAR bear market would destroy index funds.
Meaning it would make them cheap. Correct.
That's what we're after.
Meaning it would make them cheap. Correct.
That's what we're after.
You don't want something you own to become cheap!!!!!!!!!!
SailorRob
08-07-2022, 01:12 PM
What he says and what he does are two different things. The companies purchased outright, are managed blind and no representation? The companies with huge stakes, again done blind? I don't think so lol! And the preferred-stock plays are done for a reason: when suckers like you lose out he gets special benefits!
Companies that we buy outright it doesn't matter as he isn't restricted by public market limitations. But yes they are managed 'blind' he only buys with successful management (usually long term family that built it up) in place and he never meddles.
Companies with huge stakes as he says, directorship means more difficult for us to make money.
The preferred issues he gets on my behalf, we are on the same deal. He gets 100k to run the joint that's it.
SailorRob
08-07-2022, 01:12 PM
You don't want something you own to become cheap!!!!!!!!!!
As I have stated over 10 times in the last 24 hours on this very thread.
YES I DO.
kiora
08-07-2022, 01:13 PM
BH used the insurance float to make his early money & so they didn't even have to pay interest !
"Berkshire Hathaway's War Chest
Berkshire Hathaway's lifeblood is what industry insiders call a float. This is any money paid to Berkshire Hathaway’s insurance subsidiaries in premiums that has yet to be used to cover any claims.6
This money—also referred to as available reserve—doesn't actually belong to the insurance company. Yet, it remains on hand to be invested as its managers see fit. The company's float was $147 billion in 2021, $9 billion more than in 2020.6
Float allows Berkshire Hathaway to purchase temporarily wounded companies quickly and breathe life back into them. That's exactly what it did with Fruit of the Loom. Berkshire purchased the struggling clothing company for a mere $835 million in 2002 after its stock lost 97% of its value.78"
https://www.investopedia.com/articles/markets/041714/how-warren-buffett-made-berkshire-hathaway-worldbeater.asp
alokdhir
08-07-2022, 01:14 PM
https://www.newshub.co.nz/home/money/2022/07/cost-of-living-myob-poll-shows-more-than-1-million-kiwis-actively-considering-leaving-nz.html
If a million or even 250K leave NZ ...will it solve Inflation problems or complicate it more ...maybe depends on how productive these were to economy ...also if they can be replaced with more productive people .
Companies that we buy outright it doesn't matter as he isn't restricted by public market limitations. But yes they are managed 'blind' he only buys with successful management (usually long term family that built it up) in place and he never meddles.
Companies with huge stakes as he says, directorship means more difficult for us to make money.
The preferred issues he gets on my behalf, we are on the same deal. He gets 100k to run the joint that's it.
Buffett likes to portray this innocent aw shucks mentality and how anyone could become a billionaire if they just followed his advice. It's all lies. The reality is he's an INSIDER on everything; every penny he moves he has an inside track on it.
SailorRob
08-07-2022, 01:28 PM
Buffett likes to portray this innocent aw shucks mentality and how anyone could become a billionaire if they just followed his advice. It's all lies. The reality is he's an INSIDER on everything; every penny he moves he has an inside track on it.
Yeah...
He was an insider when he dumped all our airlines and then they doubled...
An insider when he sold me his Occidental at $10 a share and then he bought it in bucket loads at $50...
Not much information he can see that we cant regarding any of his public investments, it's just common sense.
READ the reports... Do the work. Don't be lazy.
If you follow his advice, depending on your age you'd likely get to only around 100 million. Very unlikely you'd be a Billionaire.
Unless you bought Bitcoin that is.
SailorRob
08-07-2022, 01:29 PM
BH used the insurance float to make his early money & so they didn't even have to pay interest !
"Berkshire Hathaway's War Chest
Berkshire Hathaway's lifeblood is what industry insiders call a float. This is any money paid to Berkshire Hathaway’s insurance subsidiaries in premiums that has yet to be used to cover any claims.6
This money—also referred to as available reserve—doesn't actually belong to the insurance company. Yet, it remains on hand to be invested as its managers see fit. The company's float was $147 billion in 2021, $9 billion more than in 2020.6
Float allows Berkshire Hathaway to purchase temporarily wounded companies quickly and breathe life back into them. That's exactly what it did with Fruit of the Loom. Berkshire purchased the struggling clothing company for a mere $835 million in 2002 after its stock lost 97% of its value.78"
https://www.investopedia.com/articles/markets/041714/how-warren-buffett-made-berkshire-hathaway-worldbeater.asp
Well said.
It's even better than that, over time they are actually paid to use the float.
This is from his 1995 letter;
"Since our float has cost us virtually nothing over the years, it has in effect served as equity. Of course, it differs from true equity in that it doesn't belong to us. Nevertheless, let's assume that instead of our having $3.4 billion of float at the end of 1994, we had replaced it with $3.4 billion of equity. Under this scenario, we would have owned no more assets than we did during 1995. We would, however, have had somewhat lower earnings because the cost of float was negative last year. That is, our float threw off profits. And, of course, to obtain the replacement equity, we would have needed to sell many new shares of Berkshire. The net result - more shares, equal assets and lower earnings - would have materially reduced the value of our stock."
Aaron
08-07-2022, 01:32 PM
https://www.newshub.co.nz/home/money/2022/07/cost-of-living-myob-poll-shows-more-than-1-million-kiwis-actively-considering-leaving-nz.html
If a million or even 250K leave NZ ...will it solve Inflation problems or complicate it more ...maybe depends on how productive these were to economy ...also if they can be replaced with more productive people .
1million people??? what a load of crap. 20% of the population over the next couple of years? I guess news media has to try and keep the eyeballs even if what they are publishing is rubbish.
Not surprising young people leaving as govt is focused on the older generation. Good to see they as typical kiwis, rather than get upset and make a fuss they do something about it.
More likely business trying to put pressure on the govt to open the immigration spigot and keep wages low. If they can whip the population into a frenzy people will be glad to get back to 50,000 immigrants a year.
Possibly it is all the people who rushed back to NZ at the beginning of the pandemic buggering off again now it is all clear.
I would be surprised if people exiting got anywhere near the number of people coming in prior to the pandemic.
If you follow his advice, depending on your age you'd likely get to only around 100 million.
You're in for a very big shock.
Currently I am helping my cousin who has a few thousand dollars to invest, he's 23. Does it matter where the market is right now, if he's investing his money in a very high or low market?
So you've told your cousin he's gonna turn "a few thousand dollars" into $100 million?
SailorRob
08-07-2022, 01:51 PM
So you've told your cousin he's gonna turn "a few thousand dollars" into $100 million?
For him it will be more as he has a much longer runway.
He should be able to do around 200 million if he sticks to the plan.
So that's taking 20k now and adding on average 50k a year over 60 years and compounding at 10%.
Likely to add a lot more though as 50k in 30 years will be pocket change and even after he stops working the dividends pouring in will vastly exceed his 50k per year input.
Average life expectance will be far more than 83 as well.
Compounding at 10% for 60 years after expenses won't be easy but not unachievable
Which is why he needs a MASSIVE BEAR for a long time NOW.
For him it will be more as he has a much longer runway.
He should be able to do around 200 million if he sticks to the plan.
So that's taking 20k now and adding on average 50k a year over 60 years and compounding at 10%.
Likely to add a lot more though as 50k in 30 years will be pocket change and even after he stops working the dividends pouring in will vastly exceed his 50k per year input.
Average life expectance will be far more than 83 as well.
Compounding at 10% for 60 years after expenses won't be easy but not unachievable
Which is why he needs a MASSIVE BEAR for a long time NOW.
I don't think I need any further proof, your post sums it up nicely.
SailorRob
08-07-2022, 02:09 PM
I don't think I need any further proof, your post sums it up nicely.
Cheers. I knew you'd get there in the end.
Place to hide for next 2 years or so is High Dividend stocks with reliable dividends in recessionary times .
Lets put our heads together to provide a list of 10 top NZX high quality dividend stocks which can reliably maintain dividend ahead too
GNE , ARG , HGH ? , WHS ? , CEN , SPK , etc
Bump .
More likely business trying to put pressure on the govt to open the immigration spigot and keep wages low. If they can whip the population into a frenzy people will be glad to get back to 50,000 immigrants a year.
I think immigration will reduce naturally due to the acceptance here in NZ of "work from anywhere" (the fools who don't want to go into the office call it "work from home"). These non-immigrants will be hired [via an agency with a local "account" presence] and they stay in their home countries doing exactly the same work as if they lived here in NZ.
NZ is a great country, but I've never seen so many depressed, beaten-down people as lately, a direct and lasting result of placing the entire population under house arrest for months on end and with absolutely no purpose to it.
SailorRob
08-07-2022, 03:17 PM
NZ is a great country, but I've never seen so many depressed, beaten-down people as lately, a direct and lasting result of placing the entire population under house arrest for months on end and with absolutely no purpose to it.[/QUOTE]
Strongly agree.
winner69
09-07-2022, 09:23 AM
A heck of a relief rally in the 10 year bond rate. All this talk of recession is immediately making traders think that the pending recession will bring rates back down, but of course we haven't had the recession yet to cure inflation, and to do that we need to raise rates. Its like stopping antibiotics before they have started working. And the relief trading coming in between CPI reading, so I suspect could be some volatility when actual measures of core CPI come in.
I had a look back through the last 20 years of 10 year gov bond rates, laid out below. Interesting the last 20 years have been some of the most benign times as well.
SPOT: 3.6%
Last 5 yr ave: 2.06%
Last 10 yr ave: 2.84%
Last 15 yr ave: 3.76%
Last 20 yr ave: 4.32%
I'm using 20yr ave 10yr bond rates when I do my back of the envelope DCF's on companies on my buy list (when I have the motivation and time to do them) so I don't get caught out.
Out of curiosity do you use that 20 year average as the risk free rate to calculate WACC or is it the discount rate you use in your DCF
bull....
09-07-2022, 10:01 AM
Payrolls increased 372,000 in June, more than expected, as jobs market defies recession fears
https://www.cnbc.com/2022/07/08/jobs-report-june-2022-.html
should cement the 75 hike by the fed later this mth. bonds back above 3% again on the news meaning the relief rally ( correction ) to the trend maybe over and the trend higher in rates may resume. or at the least consolidate at these levels.
stocks by the way are working off oversold levels , timely you might say this is being done in a week when stocks usually move higher ie after the 4th july holiday.
bull....
11-07-2022, 12:43 PM
Kiwibank increases term deposit rate to 4%, putting it above competitors
https://www.stuff.co.nz/business/129234857/kiwibank-increases-term-deposit-rate-to-4-putting-it-above-competitors
should be 4.5 -5 by end of yr , that put more pressure on nzx stocks with lower yields.
Heartland is a competitor and has had 4% for the past days or so.
alokdhir
11-07-2022, 04:36 PM
Important week for short term direction of the markets ...RBNZ decision and USA CPI date both 13th the Wednesday .
RBNZ market expects 50bps up with similar anti inflation hawkish tone
USA CPI for June consensus is again 8.6 % !!!
winner69
11-07-2022, 04:52 PM
Important week for short term direction of the markets ...RBNZ decision and USA CPI date both 13th the Wednesday .
RBNZ market expects 50bps up with similar anti inflation hawkish tone
USA CPI for June consensus is again 8.6 % !!!
NZ CPI next Monday could be interesting
Cat amongst the pigeons if it comes in at 5.5% eh ....that would get pundits talking
bull....
11-07-2022, 05:44 PM
US dollar opened the week nicely ... up that is.
guess if the fed wants to break the camels back dollars needs to go heaps higher. 1.20 chart target ?
bull....
12-07-2022, 07:07 AM
nice night for US dollar
I like it when so many people in media etc etc say second half be better keep buying the dips.
makes me feel all shivery with excitement knowing plenty more selling to do
bull....
13-07-2022, 07:00 AM
oil and some commodities savaged overnight thx to the strong dollar more than likely. just what we need.
stocks down again at this stage , thats good. all part of the plan
RBNZ today dont expect anything out of the ordinary maybe his forward language to watch
but i guess when you have
New Zealand lost 11,000 people in a year, Stats NZ says
https://www.stuff.co.nz/business/300635298/new-zealand-lost-11000-people-in-a-year-stats-nz-says
such a drain of labour thats not going to help the inflation outlook or is the ever falling dollar.
Oil savaged because we have a massive global recession coming our way
Apparently
mike2020
13-07-2022, 09:08 AM
Brent still close to $100.
Oil savaged because we have a massive global recession coming our way
Apparently
Apparently, indeed. A recession with full employment might be on the cards!
bull....
13-07-2022, 09:53 AM
Apparently, indeed. A recession with full employment might be on the cards!
to get inflation down they need people to lose there jobs
to get inflation down they need people to lose there jobs
maybe not. money supply dropping like a stone
probably in for a soft landing. too many people are talking about recession, everyone preparing for it. so shouldnt be any shocks
maybe not. money supply dropping like a stone
probably in for a soft landing. too many people are talking about recession, everyone preparing for it. so shouldnt be any shocks
I think we're priced-in (stocks etc). But who knows lol.
bull....
13-07-2022, 11:36 AM
maybe not. money supply dropping like a stone
probably in for a soft landing. too many people are talking about recession, everyone preparing for it. so shouldnt be any shocks
guess all central banks are hoping for soft landing. we should know by this time next yr how deep it be
bull....
13-07-2022, 11:36 AM
I think we're priced-in (stocks etc). But who knows lol.
bitcoin looks like going lower
bitcoin looks like going lower
It might! But I think around $20k is the bottom - ie, not a drop to, say, $15k or $10k. Two days ago I think it was, it's 24-hour drop was the same as the Nas lol (-3.5%), and yesterday it dropped 2% more than the Nas (-3% vs -1%).
I'm watching [for USA and others] housing and employment. Both seem to be holding up ok, considering all the doom and gloom.
the fact that bitcoin isnt booming means inflation is transitory ay?
the fact that bitcoin isnt booming means inflation is transitory ay?
That's a very good point. (Not saying I agree or disagree!)
We may have a big hit with inflation, higher rates deal to it, it's a permanent change to our prices, but then inflation returns to the generally accepted levels it was at.
If inflation continues high for a long period, alternative assets will be desired.
bull....
13-07-2022, 11:55 AM
We may have a big hit with inflation, higher rates deal to it, it's a permanent change to our prices, but then inflation returns to the generally accepted levels it was at.
If inflation continues high for a long period, alternative assets will be desired.
sailor rob wont be happy with high inflation would wreck future cash flows returns
sailor rob wont be happy with high inflation would wreck future cash flows returns
It doesn't matter, bull...., he's on track for his $200 million portfolio target.
bull....
13-07-2022, 12:01 PM
It doesn't matter, bull...., he's on track for his $200 million portfolio target.
no point having all that money when your 2 old to enjoy it.
no point having all that money when your 2 old to enjoy it.
Maybe we could talk him into giving it all to charity.
Oil savaged because we have a massive global recession coming our way
Apparently
Hmmm...Emotive words attract media attention and with fiece online media competition these days emotive headlines is needed to attract readers/viewers..To the investor seeing headline of Oil savaged overnight there has to be homework done to see if savage is really savage or exaggeration...Well to be fair a near 9% drop to just under $96 overnight justifies the word savage...
..but...I'll use another emotive term.. Oil price currently on the edge of a cliff.
Lets look at the wider picture..this is where charts are useful tools.
Below is firstly a one year chart...the second chart is a 3 year wider look at the trading history of Oil futures..
In hindsight and I digress...I wished I owned a couple of oil tankers and an old disused salt mine to store oil when the oil futures fell to $6.50/Barrel..I heard some trades went minus $$ a Black Swan event which we will probably never see again in our lifetimes...Now that's justified being called savage .. or stronger still.. carnage...eh
Fundamental V Technical Conflicting views:
Looking at the longer view of things on the 3 years chart sees Oil futures trading in a technical Bull Market cycle..The chart has Oil price in a nice upward trend and last nights price fall is hardly noticeable (so much for the savagery), and so the long term view still seems healthy. Looking more closely (the one year chart) sees the worry of Oil very close to becoming a technical Bear. All it needs technically is another down day today...
On the other hand the Fundamental says oil has dropped more than 20% from its high and is officially trading in a Bear Cycle..If it is a Bear then the $95/Barrel support will be expected to break and the near future for the Oil price is grim...Technically however if Oil rallies up off that strong $95 support it will still be called a technical Bull experiencing a very large correction.. Bull cycles see price recoveries after corrections so the near future for the Oil price is rosy..
Looking at the 3 year Chart the Russian invasion of Ukraine coincided with the start of this present bearish secondary tide..will this end quickly too or will a possible incoming recession be enough to see Oil falling below $90/barrel in a Bear market cycle which by then will be agreed by both Fundamental and Technical disciplines?
We won't have to wait long for an answer..
13962
13963
Joshuatree
13-07-2022, 02:30 PM
Hmmm...Emotive words attract media attention and with fiece online media competition these days emotive headlines is needed to attract readers/viewers..To the investor seeing headline of Oil savaged overnight there has to be homework done to see if savage is really savage or exaggeration...Well to be fair a near 9% drop to just under $96 overnight justifies the word savage...
..but...I'll use another emotive term.. Oil price currently on the edge of a cliff.
Lets look at the wider picture..this is where charts are useful tools.
Below is firstly a one year chart...the second chart is a 3 year wider look at the trading history of Oil futures..
In hindsight and I digress...I wished I owned a couple of oil tankers and an old disused salt mine to store oil when the oil futures fell to $6.50/Barrel..I heard some trades went minus $$ a Black Swan event which we will probably never see again in our lifetimes...Now that's justified being called savage .. or stronger still.. carnage...eh
Fundamental V Technical Conflicting views:
Looking at the longer view of things on the 3 years chart sees Oil futures trading in a technical Bull Market cycle..The chart has Oil price in a nice upward trend and last nights price fall is hardly noticeable (so much for the savagery), and so the long term view still seems healthy. Looking more closely (the one year chart) sees the worry of Oil very close to becoming a technical Bear. All it needs technically is another down day today...
On the other hand the Fundamental says oil has dropped more than 20% from its high and is officially trading in a Bear Cycle..If it is a Bear then the $95/Barrel support will be expected to break and the near future for the Oil price is grim...Technically however if Oil rallies up off that strong $95 support it will still be called a technical Bull experiencing a very large correction.. Bull cycles see price recoveries after corrections so the near future for the Oil price is rosy..
Looking at the 3 year Chart the Russian invasion of Ukraine coincided with the start of this present bearish secondary tide..will this end quickly too or will a possible incoming recession be enough to see Oil falling below $90/barrel in a Bear market cycle which by then will be agreed by both Fundamental and Technical disciplines?
We won't have to wait long for an answer..
13962
13963
I've read alot of research and believe peak oil is here and along with reduced oil and gas exploration ,ESG pressures,the fact that a large %of the world's population is climbing out of poverty and demanding their share of energy use and the colossal amounts of traditional energy required to create green energy solutions,that this time it really is different .So indeed we will see ,recession or no recession demand will exceed supply hereon imo.
winner69
13-07-2022, 02:49 PM
Hoops me ol mate, have you seen the latest Crestmont update
Spooky chart included
This graph presents both (1) the historical trend for actual reported earnings per share (EPS), including a forecast by Standard & Poor's, and (2) an inset graph presenting the historical record for S&P's forecast over the past five years. To put the historical trend and future forecast into perspective, the graph includes Crestmont's assessment of the long-term baseline trend for EPS. Crestmont's baseline also puts into perspective whether current and forecast EPS are above or below the long-term trend for EPS. Note: the inset graph reflects S&P's EPS forecasts for recent years; forecasts begin about two years in advance and proceed until the year is finalized.
Hoops me ol mate, have you seen the latest Crestmont update
Spooky chart included
...
Interesting chart.
1) we are way off long term trend. Need to be very selective with ya stocks.
2) long term trend EPS always goes up. Buy the dip
Hmmm...Emotive words attract media attention and with fiece online media competition these days emotive headlines is needed to attract readers/viewers..To the investor seeing headline of Oil savaged overnight there has to be homework done to see if savage is really savage or exaggeration...Well to be fair a near 9% drop to just under $96 overnight justifies the word savage...
..but...I'll use another emotive term.. Oil price currently on the edge of a cliff.
Lets look at the wider picture..this is where charts are useful tools.
Below is firstly a one year chart...the second chart is a 3 year wider look at the trading history of Oil futures..
In hindsight and I digress...I wished I owned a couple of oil tankers and an old disused salt mine to store oil when the oil futures fell to $6.50/Barrel..I heard some trades went minus $$ a Black Swan event which we will probably never see again in our lifetimes...Now that's justified being called savage .. or stronger still.. carnage...eh
Fundamental V Technical Conflicting views:
Looking at the longer view of things on the 3 years chart sees Oil futures trading in a technical Bull Market cycle..The chart has Oil price in a nice upward trend and last nights price fall is hardly noticeable (so much for the savagery), and so the long term view still seems healthy. Looking more closely (the one year chart) sees the worry of Oil very close to becoming a technical Bear. All it needs technically is another down day today...
On the other hand the Fundamental says oil has dropped more than 20% from its high and is officially trading in a Bear Cycle..If it is a Bear then the $95/Barrel support will be expected to break and the near future for the Oil price is grim...Technically however if Oil rallies up off that strong $95 support it will still be called a technical Bull experiencing a very large correction.. Bull cycles see price recoveries after corrections so the near future for the Oil price is rosy..
Looking at the 3 year Chart the Russian invasion of Ukraine coincided with the start of this present bearish secondary tide..will this end quickly too or will a possible incoming recession be enough to see Oil falling below $90/barrel in a Bear market cycle which by then will be agreed by both Fundamental and Technical disciplines?
We won't have to wait long for an answer..
13962
13963
Thanks for that post, Hoop, interesting.
Hoops me ol mate, have you seen the latest Crestmont update
Spooky chart included
This graph presents both (1) the historical trend for actual reported earnings per share (EPS), including a forecast by Standard & Poor's, and (2) an inset graph presenting the historical record for S&P's forecast over the past five years. To put the historical trend and future forecast into perspective, the graph includes Crestmont's assessment of the long-term baseline trend for EPS. Crestmont's baseline also puts into perspective whether current and forecast EPS are above or below the long-term trend for EPS. Note: the inset graph reflects S&P's EPS forecasts for recent years; forecasts begin about two years in advance and proceed until the year is finalized.
And this is just as good. Trying to get my head around it!
Interesting chart.
1) we are way off long term trend. Need to be very selective with ya stocks.
I was thinking that, but EPS is going to be messed with inflation in more than one way maybe?
Hoops me ol mate, have you seen the latest Crestmont update
Spooky chart included
This graph presents both (1) the historical trend for actual reported earnings per share (EPS), including a forecast by Standard & Poor's, and (2) an inset graph presenting the historical record for S&P's forecast over the past five years. To put the historical trend and future forecast into perspective, the graph includes Crestmont's assessment of the long-term baseline trend for EPS. Crestmont's baseline also puts into perspective whether current and forecast EPS are above or below the long-term trend for EPS. Note: the inset graph reflects S&P's EPS forecasts for recent years; forecasts begin about two years in advance and proceed until the year is finalized.
This is gonna drive me crazy. Need more inputs from peeps here!
SailorRob
13-07-2022, 08:21 PM
sailor rob wont be happy with high inflation would wreck future cash flows returns
By definition inflation is higher cash flows. Nominal GDP and corporate revenues are exploding.
But of course we're concerned with net future cash flows.
With inflation causing the cost of goods sold to increase, a good defense is a high gross margin. A 10% rise in the COGS will have far less effect on a company with high gross margins than one with lower.
The other thing to watch closely is capital intensive businesses with who's capex will explode with inflation. High returns on tangible assets is what you want. Assets which don't require cash pouring into them in order for them to retain their ability to earn.
Very early days for inflation, who knows. Bond market is calling bollox on it but we shall see.
SailorRob
13-07-2022, 08:23 PM
It doesn't matter, bull...., he's on track for his $200 million portfolio target.
No that was my Cousin who is 23.
I ran through the Math, it's not complicated.
The question is who can compound at 10% for multiple decades.
And I'll tell you something. Warhol cannot.
SailorRob
13-07-2022, 08:29 PM
I was thinking that, but EPS is going to be messed with inflation in more than one way maybe?
That is correct.
Gerald
13-07-2022, 09:53 PM
Hoops me ol mate, have you seen the latest Crestmont update
Spooky chart included
This graph presents both (1) the historical trend for actual reported earnings per share (EPS), including a forecast by Standard & Poor's, and (2) an inset graph presenting the historical record for S&P's forecast over the past five years. To put the historical trend and future forecast into perspective, the graph includes Crestmont's assessment of the long-term baseline trend for EPS. Crestmont's baseline also puts into perspective whether current and forecast EPS are above or below the long-term trend for EPS. Note: the inset graph reflects S&P's EPS forecasts for recent years; forecasts begin about two years in advance and proceed until the year is finalized.
Yes very spooky. Returning to the norm of 8-9% margins would drop earnings by 30% or so :scared:
The question is who can compound at 10% for multiple decades.
Bernie Madoff.
Yes very spooky. Returning to the norm of 8-9% margins would drop earnings by 30% or so :scared:
I'm scared as hell right now - but not knowing, fully, *why* lol.
US CPI 9.1% p/a for June.
US CPI 9.1% p/a for June.
That's year-over-year. Month is much worse: 1.3% for June.
Bitcoin down 5% on very low volume. It might end up doing better today than some stocks on the Nas!
Bitcoin recovered half the 5% drop.
And..... Bitcoin has fully recovered the 5% drop. Nas is in the green.
If the shocking inflation data hasn't crashed the markets today then I think the bottom could be in for stocks!
bull....
14-07-2022, 05:55 AM
And..... Bitcoin has fully recovered the 5% drop. Nas is in the green.
If the shocking inflation data hasn't crashed the markets today then I think the bottom could be in for stocks!
nah everyone new it was going to be high thats why the reaction is pretty muted. doesnt change the fact E will be impacted next reporting period not this one
https://www.youtube.com/watch?v=EI1IWOLl5YU
bull....
14-07-2022, 06:06 AM
Inflation rose 9.1% in June, even more than expected, as consumer pressures intensify
https://www.cnbc.com/2022/07/13/inflation-rose-9point1percent-in-june-even-more-than-expected-as-price-pressures-intensify.html
Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher
https://www.bloomberg.com/news/articles/2022-07-13/fed-could-weigh-historic-100-basis-point-hike-after-cpi-scorcher?srnd=premium-asia
oh no azz its all in the red again
on this news
beige book just out
:scared:
stagflation
oh no azz its all in the red again
Goddam it !
Ricky-bobby
14-07-2022, 06:33 AM
Be a big dip tomorrow I recon… been taking a day to sink in at the mo…
Be a big dip tomorrow I recon… been taking a day to sink in at the mo…
It's a pretty bad number, the month one, 1.3% holy hell !
bull....
14-07-2022, 07:11 AM
Fed’s Bostic Says June CPI Concerning, ‘Everything in Play’
https://www.bloomberg.com/news/articles/2022-07-13/fed-s-bostic-says-june-cpi-concerning-everything-is-in-play#xj4y7vzkg
100 in play
guess it has to be , next meeting after july is sept
Inflation rose 9.1% in June, even more than expected, as consumer pressures intensify
https://www.cnbc.com/2022/07/13/inflation-rose-9point1percent-in-june-even-more-than-expected-as-price-pressures-intensify.html
Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher
https://www.bloomberg.com/news/articles/2022-07-13/fed-could-weigh-historic-100-basis-point-hike-after-cpi-scorcher?srnd=premium-asia
oh no azz its all in the red again
on this news
beige book just out
:scared:
stagflation
Wait till we see New Zealand’s figures in the coming months. A business I know is seeing 30-60% product increases in the food sector. A certain Supplier I know is thinking about 30% of takeaways won’t make it in the next 12 months and about the same if not more in restaurants.
bull....
14-07-2022, 07:50 AM
Wait till we see New Zealand’s figures in the coming months. A business I know is seeing 30-60% product increases in the food sector. A certain Supplier I know is thinking about 30% of takeaways won’t make it in the next 12 months and about the same if not more in restaurants.
agree takeaways , cafe's , restaurants etc are up against it
:scared: feel sorry for anyone in these businesses
Wait till we see New Zealand’s figures in the coming months. A business I know is seeing 30-60% product increases in the food sector. A certain Supplier I know is thinking about 30% of takeaways won’t make it in the next 12 months and about the same if not more in restaurants.
My local Domino's takes itself offline for all centralized promotions. You put your address in and the store disappears. This is very worrying for a number of reasons.
Does anyone here know of an asset not really affected by inflation? That can't be diluted outside of a predictable norm? Where earnings are not an issue? That can weather a terrible storm with great fortitude? Where short interest can turbo power any upward move?
agree takeaways , cafe's , restaurants etc are up against it
:scared: feel sorry for anyone in these businesses
I think we should all be prepared for $50 mains being the new normal at restaurants. As for pizzas. I don’t know how they can sell one for $5 the cheese is already $1-2 worth. On a positive you may see some more takeaways declaring their cash take
bull....
14-07-2022, 08:23 AM
I think we should all be prepared for $50 mains being the new normal at restaurants. As for pizzas. I don’t know how they can sell one for $5 the cheese is already $1-2 worth. On a positive you may see some more takeaways declaring their cash take
its a catch 22 , they cant keep raising prices to offset input costs because of demand destruction. combine with people getting poorer and they cant win this one.
service will get worse as well as the food to help many to struggle thru.
ill be able to cook a nicer meal at home
its a catch 22 , they cant keep raising prices to offset input costs because of demand destruction. combine with people getting poorer and they cant win this one.
service will get worse as well as the food to help many to struggle thru.
ill be able to cook a nicer meal at home
Agreed. Prices can’t keep increasing all the time. Service will get worse as businesses struggle to maintain a profit. To be fair $50 is not a bad price when the meal costs $20 or more to make, after adding wages
Demand is still there in lots of other industries. A local car dealer mentioned they have demand for new cars, but they are arriving at the end of next year for some models due to factories in Ukraine. People are paying for them now in cash with a promise to be in the queue.
alokdhir
14-07-2022, 08:41 AM
Does anyone here know of an asset not really affected by inflation? That can't be diluted outside of a predictable norm? Where earnings are not an issue? That can weather a terrible storm with great fortitude? Where short interest can turbo power any upward move?
Check out FPH ...may fit your requirements ...DYOR
bull....
14-07-2022, 08:52 AM
Agreed. Prices can’t keep increasing all the time. Service will get worse as businesses struggle to maintain a profit. To be fair $50 is not a bad price when the meal costs $20 or more to make, after adding wages
Demand is still there in lots of other industries. A local car dealer mentioned they have demand for new cars, but they are arriving at the end of next year for some models due to factories in Ukraine. People are paying for them now in cash with a promise to be in the queue.
with monetary tightening theres always a lag before it hits the real economy , so the demand your seeing now may be gone later this yr , early next yr
Does anyone here know of an asset not really affected by inflation? That can't be diluted outside of a predictable norm? Where earnings are not an issue? That can weather a terrible storm with great fortitude? Where short interest can turbo power any upward move?
Meta, google, microsoft type companies maybe?
Financial institutions- but with banks you have credit risk
Meta, google, microsoft type companies maybe?
Financial institutions- but with banks you have credit risk
EBOS has been remarkably resilient to this inflation thing. Long may it continue!
bull....
14-07-2022, 12:42 PM
who thinks after next weeks nz inflation data RBNZ may look behind the curve
Bjauck
14-07-2022, 12:51 PM
Agreed. Prices can’t keep increasing all the time. Service will get worse as businesses struggle to maintain a profit. To be fair $50 is not a bad price when the meal costs $20 or more to make, after adding wages
Demand is still there in lots of other industries. A local car dealer mentioned they have demand for new cars, but they are arriving at the end of next year for some models due to factories in Ukraine. People are paying for them now in cash with a promise to be in the queue. NZ is a country of extremes. There are still plenty of people selling real estate investments for a good profit, yet not wishing to reinvest in that sector.
mike2020
14-07-2022, 12:51 PM
I'm guessing everyone.
who thinks after next weeks nz inflation data RBNZ may look behind the curve
I'm not a big proponent of the RBNZ - but they did raise interest rates before almost everyone else. So, that's good, relatively.
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