Black Monday

[bull....]

nz 10yr at 4.18 now. having a effect today on the nz50 i guess.

[alokdhir]

nz 10yr at 4.18 now. having a effect today on the nz50 i guess.

Long weekend Friday is also having an effect today ...but yes 10 yr is hurting all stocks ...Biggest down day recently so far albeit on very poor volumes

[bull....]

Long weekend Friday is also having an effect today ...but yes 10 yr is hurting all stocks ...Biggest down day recently so far albeit on very poor volumes

yep but nz50 still outperforming others ( at the moment ) . i mean look at the asx today getting pummelled esp con dis stocks and nzd still going down

[SailorRob]

We have our own pool of term deposits funds of $ 180 Billion ...if mortgage take drys as its happening now and it becomes cheaper to borrow local then why will market or banks look to borrow from overseas .

This is not happening for the first time ...so it will play out in similar ways ...there are market forces at play ...demand and supply pressures will decide what levels economy can bear ...Japan is a shining example

Term deposits fund NZ Inc?

Tell you what sport, you let me know when NZ bonds diverge on the low side to US.

[alokdhir]

Term deposits fund NZ Inc?

Tell you what sport, you let me know when NZ bonds diverge on the low side to US.

U can see it your self mate ....US 10 year yields at new high ...last was 3.5% now its above 3.73% while NZ 10 years still below previous high of 4.284 set in June

[Baa_Baa]

If I’ve learnt anything useful about investing and social media insights it might be only these two things:

1. “Everything is overpriced, value is hard to find” - get ready to cash out a few and build a reserve

2. “It’s all turning to custard, everything is under valued” - get ready to unleash the cash reserves, it happens only occasionally

Have a nice weekend, detach from the noise of the day to day chatter, rejoice in the opportunity and don’t beat yourself up for not being perfectly timed in your decisions.

[Bobdn]

Sisters, is this capitulation or is it still too orderly? My oil ETFs are down 8 per cent so it feels like capitulation to me.

The SP500, however, is down 2 per cent at the time of writing and the NZD down 1.5 per cent. So many down days in a row.

[alokdhir]

Sisters, is this capitulation or is it still too orderly? My oil ETFs are down 8 per cent so it feels like capitulation to me.

The SP500, however, is down 2 per cent at the time of writing and the NZD down 1.5 per cent. So many down days in a row.

Not yet fully there but the process has started ....get ready for wild moves ...mainly to down side

NZD around 55 Cents is a good indicator of close to bottom ...normally doesn't stay long below 55 ...exact bottom only God knows

[bull....]

savage rise in US dollar , driving NZD to new lows. US stock market at new lows surely NZ50 will catch up soon.

should be lower petrol prices soon oil getting crushed but on the other hand guess lower nzd dollar makes it more expensive to import so nah not much in fact everything getting really expensive to import must be crushing those nz companies that import stuff.

orr must surely be more hawkish next meeting nzd driving inflation up along with nz govt spending

[bull....]

Sisters, is this capitulation or is it still too orderly? My oil ETFs are down 8 per cent so it feels like capitulation to me.

The SP500, however, is down 2 per cent at the time of writing and the NZD down 1.5 per cent. So many down days in a row.

not all bear markets end in capitulation , but if we get one it might help us in guessing the bottom

[Panda-NZ-]

The issue is bonds are worse than cash so diversified/ "balanced" ETFs will still take a double hit there.

[bull....]

only save place in the world is US dollars ... till it lasts

[alokdhir]

Dow closed at new low for 2022 ...S&P 500 flirting with near lows of 2022 .

While NZX is way above its June lows ...will we catch up on the way down or we will diverge and make a higher bottom in this go ? Time will tell but divergence so far is showing the relative strength of NZX ...IMHO

[Bobdn]

@Bull, quite right, not all bear markets have to have that whoosh down in the end.

I really didn't think we'd be back down here at the lows of the year. Just holding and observing. As someone who has no cash to invest, I'll console myself with the quarterly dividend reinvestment coming up. Better than nothing but not as good as a barrel full of dry powder.

[Panda-NZ-]

There's always adding margin/leverage.

..but interest rates hit that too. :p

[Bobdn]

Nah, my borrowing days are over. I'll just take my lumps.

[winner69]

Heard this on the telly - "Lots of pain as people realize what they thought was their own investment genius was actually just low interest rates."

[Panda-NZ-]

Heard this on the telly - "Lots of pain as people realize what they thought was their own investment genius was actually just low interest rates."

Strange thing is that housing will still weather this storm better.

Despite it not involving much in the way of "smarts".

[winner69]

My mate Michael says 'The US real exchange rate now is just a bit above where it was for much of 2001.
Back then the NZD/USD exchange rate was just a bit above 0.4000'

I remember those days well and the shock horror when it went below 40 cents .... really stuffed up margins if you imported stuff (goods or raw materials)

Might happen again

Then again first time I went to the US a NZD got me $1.30 of their dollars ....cool

[ynot]

It made no sense at the start of this inflationary spiral when the reserve bank stated this movement was "transitory".

https://www.kitco.com/commentaries/2022-09-24/Federal-Reserve-s-inaction-will-lead-the-U-S-into-a-deep-recession.html

[LEMON]

No alternative, only to wait till things begin to break (energy crisis, civil unrest) and then fire up the magic money machine, debase the Euro, the wealth gap grows bigger, demand a new regime change from the people, new regime breaks away from the European Union, weak European countries adopt the US dollar alongside their weak currency, the Milkshake theory is in play
Note - not everyone wants a US dollar and wants to move away from it and transact with hard commodities and their own currency, and as states then become more independent and less global, privatisation of land and energy grids

Yen
GBP
Euro

Milkshake $$

[alokdhir]

We are lucky we closed on Monday ...lol

One more day we get for some bounce to start from over sold US markets ...so our Tuesday can open more sober :D

[Aaron]

Heard this on the telly - "Lots of pain as people realize what they thought was their own investment genius was actually just low interest rates."

Can't help but think there is a bit of truth in that statement. A lot of the geniuses appear to be getting upset with central banks already, worried about unemployment. 30 years of lower lows might be hard to adjust to a change. We have had 11 months of rises, pretty steep rises off a historical .25% low. OCR is now just above where we were in April 2009 at the bottom of the GFC. One of the biggest financial crises in history.

Don't know what that says about where the economy is at now, at a guess more debt, requires lower rates. Not that hard really. Should do well when rates go negative in the next crisis. They are currently negative in real terms. Inflation is great at disguising things, like theft from savers.

[bull....]

savage start to the week at this point of time

nzd currently down over half a cent again
asx down nearly 2%
wall st futures in the red for tonight
US dollar going ballistic to the upside

im mainly in cash. unfortunatlet for me the stocks i still own are getting crushed :scared:

[Muse]

savage start to the week at this point of time

nzd currently down over half a cent again
asx down nearly 2%
wall st futures in the red for tonight
US dollar going ballistic to the upside

im mainly in cash. unfortunatlet for me the stocks i still own are getting crushed :scared:

Whatcha holdin’ bull?

[iceman]

savage start to the week at this point of time

nzd currently down over half a cent again
asx down nearly 2%
wall st futures in the red for tonight
US dollar going ballistic to the upside

im mainly in cash. unfortunatlet for me the stocks i still own are getting crushed :scared:

All relative isn't it. My little Hatch account into the US in monthly installments this year shows a capital loss of 14.2% but a currency gain of 15.6%, plus a few very small divies. Well relaxed !

[alokdhir]

FPH and RMD not getting crushed ...rather going up as I write ....So surely not Bull's picks ...lol

[bull....]

Whatcha holdin’ bull?

i was just referring to my nhc today but my fbu ive started building a long term position in recently due to div. ill keep adding over time as there debt levels etc are pretty good going into a slowdown. got a couple others that about it mainly cash. being patient for when we allocate to long term holdings but continue to trade when appropriate.

[Tomtom]

Will inflationary forces, and therefore higher interest rates, persist?

The Russians look prepared to throw tens, maybe hundreds, of thousands more men into the Ukrainian meat grinder to slow defeat and drag the war out. China doesn't appear to have made much progress with Covid-19 and the labour market remains tight as a drum. I cannot see much reprieve.

If anything I've been surprised at how low impact rate increases have been so far, consumers appear insatiable and businesses lethargic.

[LEMON]

Yen
GBP
Euro

Milkshake $$


No alternative, only to wait till things begin to break (energy crisis, civil unrest) and then fire up the magic money machine, debase the Euro, the wealth gap grows bigger, demand a new regime change from the people, new regime breaks away from the European Union, weak European countries adopt the US dollar alongside their weak currency, the Milkshake theory is in play
Note - not everyone wants a US dollar and wants to move away from it and transact with hard commodities and their own currency, and as states then become more independent and less global, privatisation of land and energy grids

Or

CBDC (central bank digital currency) where governments take control and monitor your daily transactions that allow the creation of money, that can then be manipulated by accessing and blocking daily transactions from the civilians and if you don't like it or try to rebel then you will be censored and cancelled then be forced into poverty, so be good boys and girls as your transaction will dictate your social credit

Who really knows though, history never repeats but it does rhyme and I do love me some monetary history

Italy votes in "far right", regime change, EU break up?

Weakening currencies against the US dollar, Milkshake

[JBmurc]

Poor money policy is an understatement!!!

Jeremy Siegel of the Wharton School ripping apart Powell and the Fed

https://twitter.com/profplum99/status/1573411055786770445?s=20&t=SLky4MgnrnvE-FuqJnUyOA

[bull....]

NZD slammed down to just above 56c :scared:
US dollar up big
commodities down
US bonds massive jump 5% higher TO 3.9 % 10 yr , probably feed thru to NZ bonds again esp when you consider aus bonds had a big jump yesterday
stocks down

did you know historically this is the worst week of the yr

[Bjauck]

Italy votes in "far right", regime change, EU break up?

Weakening currencies against the US dollar, Milkshake The Italians don't want to leave the EU but they may cause frictions. They can see the economic fall out that the UK has endured from its Right Wing Brexiters taking the UK out of the EU and the single market with resultant trade barriers reintroduced.

[winner69]

Heard this this morning “A further market decline of over 20% would be required simply to restore a positive risk-premium for the S&P 500 relative to bonds."


That SPX at 2800 still on the cards

[bull....]

Heard this this morning “A further market decline of over 20% would be required simply to restore a positive risk-premium for the S&P 500 relative to bonds."


That SPX at 2800 still on the cards

guess the same applies to NZ ... see the 10yr in nz has already had a big jump this morning near touching highs back in june of around 4.26. more mortgage pain coming next mth after ORR says i need to see more pain

[alokdhir]

Tradable bounce in US markets very close as per VIX data and S&P close to 200 week MA level of 3595 ...also it just cant go down in straight line

Every day NZD looses one cent plus ...crazy stuff !!!

[GTM 3442]

Tradable bounce in US markets very close as per VIX data and S&P close to 200 week MA level of 3595 ...also it just cant go down in straight line

Every day NZD looses one cent plus ...crazy stuff !!!

Yeah. Slowly rotating out of S&P and DOW into NZD.

Pleasing how the exchange rate can turn a USD loss into an NZD gain.

[winner69]

Tradable bounce in US markets very close as per VIX data and S&P close to 200 week MA level of 3595 ...also it just cant go down in straight line

Every day NZD looses one cent plus ...crazy stuff !!!

NZD has had some huge daily falls in the past --- todays's nothing really

From my mate Michael

[LEMON]

The Italians don't want to leave the EU but they may cause frictions. They can see the economic fall out that the UK has endured from its Right Wing Brexiters taking the UK out of the EU and the single market with resultant trade barriers reintroduced.

Italy can't leave the EU, too many strings with bailouts, debt and bonds. The Italians want change which creates more disruption and a more unstable EU, which has a knock-on effect, that is yet to be seen, it's a long-term outlook as things become more uneasy & as new far right governments will talk different to those in Brussel with power, for now bigger EU countries like Germany will prop up Italy

[winner69]

This guy reckons NZD still 28% overvalued (AUD still undervalued) ….all to do with current account deficit …..and ours is pretty bad

Interesting table

https://twitter.com/robinbrooksiif/status/1574478292660654085?s=21&t=4onySoSaKxLUXVB14Y17cg

[Panda-NZ-]

NZD slammed down to just above 56c :scared:

Time to sell your knick knacks on ebay to americans, rather than on trademe.

[bull....]

Time to sell your knick knacks on ebay to americans, rather than on trademe.

if your got some usd you could just by trademe .. getting cheaper by the day

[bull....]

nz50 going down today by a sizable amount , nz bonds up big today guess there is an alternative now ?

[850man]

over 2% down today alone :scared:

[bull....]

at this time asx looking quite weak again today
US 10yr big jump again just about 4% now
big reversal down from opening highs US stocks ... looks like the great run up in US utilities is over now. savaged last 3 weeks. maybe starting to flow thru into NZ defensive stocks now?

[Rawz]

at this time asx looking quite weak again today
US 10yr big jump again just about 4% now
big reversal down from opening highs US stocks ... looks like the great run up in US utilities is over now. savaged last 3 weeks. maybe starting to flow thru into NZ defensive stocks now?
I like your ‘Black Monday’ morning brief, Bull. There’s always something to ponder- Like your last thought on the defensive stocks. Nice one.

Does anyone recommend a very good morning brief from a commercial outfit? A free one. Lol

[Filthy]

Does anyone recommend a very good morning brief from a commercial outfit? A free one. Lol

i usually read the ASB one (can get it sent to your inbox) https://www.asb.co.nz/asb-securities/morning-brief.html

[winner69]

I like your ‘Black Monday’ morning brief, Bull. There’s always something to ponder- Like your last thought on the defensive stocks. Nice one.

Does anyone recommend a very good morning brief from a commercial outfit? A free one. Lol

He pretty good that bull …hits the hail on the head first thing in the morning ….few words as well.

Thanks bull.

[Filthy]

maybe starting to flow thru into NZ defensive stocks now?

can now get a (relatively) safe 4-4.5% return from a term-deposit; which is higher than the divi's of many defensive equities i.e. POT (~2.31%), AIA (nothing), SPN (~3.1%), VHP (~3.84%), MEL (~3.5%) etc which are likely to track down or sideways...

[bull....]

can now get a (relatively) safe 4-4.5% return from a term-deposit; which is higher than the divi's of many defensive equities i.e. POT (~2.31%), AIA (nothing), SPN (~3.1%), VHP (~3.84%), MEL (~3.5%) etc which are likely to track down or sideways...

you do need to add imputation credits into the equation as well but agree if bonds / term deposits keep rising some of these defensive stocks will yield less even with credits and many of them dont offer growth so really is just a yield comparison with risk of capital loss at this point in time for some of these stocks.

[Filthy]

you do need to add imputation credits into the equation as well but agree if bonds / term deposits keep rising some of these defensive stocks will yield less even with credits and many of them dont offer growth so really is just a yield comparison with risk of capital loss at this point in time for some of these stocks.

totally. was just using early morning 'back of a cigarette packet' math on a couple of examples.

[Aaron]

can now get a (relatively) safe 4-4.5% return from a term-deposit; which is higher than the divi's of many defensive equities i.e. POT (~2.31%), AIA (nothing), SPN (~3.1%), VHP (~3.84%), MEL (~3.5%) etc which are likely to track down or sideways...

If they have a lot of debt, eventually rising interest rates will lower earnings and maybe dividends as well. Also the bond holder knows what their return is going to be unless the company hits trouble (not the companies above) in which case the equity gets wiped out first. Food for thought.

[bull....]

apple just said cutting back production due to weak demand ..... might not go down to well tonight. everything just took a dive even the nz dollar :scared: down another half cent

[alokdhir]

apple just said cutting back production due to weak demand ..... might not go down to well tonight. everything just took a dive even the nz dollar :scared: down another half cent

Bull do u remember ....NZD 55 has arrived ....Soon bottom will arrive

[Baa_Baa]

Bull do u remember ....NZD 55 has arrived ....Soon bottom will arrive

Crash lows:
0.5470 March 2020 - Covid
0.4895 March 2009 - GFC
0.3900 October 2000 - Dotbomb

[alokdhir]

Crash lows:
0.5470 March 2020 - Covid
0.4895 March 2009 - GFC
0.3900 October 2000 - Dotbomb

I pick in between 0.4895 and 0.5470 ...so maybe 52.50 !!! Just can guess as no one can actually predict bottom ...but vicinity we can feel

[alokdhir]

All yield stocks in free fall ....GNE almost 2.60 ...wow

Time to get in growth stocks ...early bird catches the worm ....soon this trend will catch up ...yield theme over it seems ...

[bull....]

All yield stocks in free fall ....GNE almost 2.60 ...wow

Time to get in growth stocks ...early bird catches the worm ....soon this trend will catch up ...yield theme over it seems ...

yep our bond yields heading to 4.35 might be interested in gne at some stage
cause who knows how bonds going to go ? if they went to 10% gne would be expensive at 1.50 lol

[bull....]

Bull do u remember ....NZD 55 has arrived ....Soon bottom will arrive

lol it all depends how high us dollar goes. have a look at chart of us dollar in 1980 and your see how high it went in that inflation period

[alokdhir]

lol it all depends how high us dollar goes. have a look at chart of us dollar in 1980 and your see how high it went in that inflation period

We are too far away from 1980's mate ....now average home has 100 times more debt then 1980s so it needs much lesser medicine for them to start feeling fainting

[Muse]

yep our bond yields heading to 4.35 might be interested in gne at some stage
cause who knows how bonds going to go ? if they went to 10% gne would be expensive at 1.50 lol

could do but everything will be buggered then anyway

but even if that happened, you could just do the "bull" thing: buy not worrying about short term price declines, collect the dividend, wait for the macro economic cycle to turn and interest rates to revert, divest share hopefully for same or no less than purchase price, locking in yield.

the equity equivalent of holding a bond to maturity...you only "get" your interest rate if you hold it to maturity...if you sell along the way you are taking capital risk, and a risk equivalent to equity risk.

that's the shame about all these defensive funds - people drawing on them right now will be taking capital losses on their bond positions as interest rates rise.

[alokdhir]

could do but everything will be buggered then anyway

but even if that happened, you could just do the "bull" thing: buy not worrying about short term price declines, collect the dividend, wait for the macro economic cycle to turn and interest rates to revert, divest share hopefully for same or no less than purchase price, locking in yield.

the equity equivalent of holding a bond to maturity...you only "get" your interest rate if you hold it to maturity...if you sell along the way you are taking capital risk, and a risk equivalent to equity risk.

that's the shame about all these defensive funds - people drawing on them right now will be taking capital losses on their bond positions as interest rates rise.

Agree with u fully ...But same capital appreciation or depreciation can be got from Bonds also ...if u buy near the yield top then its all fun ...sell whenever ...

But I also prefer good quality yield stocks like GNE ...only yields going up is rerating GNE types down ...around $ 2.50 they become good value again ....just took 2-3 days from 2.90 to 2.60 ...maybe few more and its close to 2.50 ...then again cycle starts

[bull....]

could do but everything will be buggered then anyway

but even if that happened, you could just do the "bull" thing: buy not worrying about short term price declines, collect the dividend, wait for the macro economic cycle to turn and interest rates to revert, divest share hopefully for same or no less than purchase price, locking in yield.

all very well but if you time your purchase wrong it may never get back to your original buy price esp if rates revert back to nz norms. whats that around 7%

[alokdhir]

Rebound has started as BoE could not bear it anymore ....now Bond market knows where Central Banks actually stands ....

Made the fight against inflation difficult or longer or orderly ...longer surely

PS : Bull only gives early morning comments when markets going his way ie Down ...Upside he skips ...lol

[bull....]

Rebound has started as BoE could not bear it anymore ....now Bond market knows where Central Banks actually stands ....

Made the fight against inflation difficult or longer or orderly ...longer surely

PS : Bull only gives early morning comments when markets going his way ie Down ...Upside he skips ...lol

lol i decided to sleep in this morning, to many early starts.

it was suggested the BOE was going to do something yesterday or the day before
everything was either over brought or over sold so nothing to worry about hence the sleep in. we can go back to going down soon enough

[SailorRob]

lol i decided to sleep in this morning, to many early starts.

it was suggested the BOE was going to do something yesterday or the day before
everything was either over brought or over sold so nothing to worry about hence the sleep in. we can go back to going down soon enough

Bought...

Why didn't you buy the UK long bond then. Up 32% overnight.

[bull....]

Bought...

Why didn't you buy the UK long bond then. Up 32% overnight.

didnt buy anything , no trends have changed. like i said boe was an excuse to take profits all over the place

[alokdhir]

didnt buy anything , no trends have changed. like i said boe was an excuse to take profits all over the place

Mr Bull ...Main point to note here is the big discomfort of powerful Central Banks at fast rising yields . Fighting inflation is good for markets but preservation of markets is even more important . They do not want to repeat the mistakes of GFC ....Lehman Bros style ....they ready to step in with liquidity when push comes to shove

Stock Markets will take solace from that ...we may slowly drift down after a bounce but now further capitulation risks have been minimised

US 10Y at 4% markets have seen and discounted ...I will be very surprised markets actually needs to sustain anything much higher then that ahead

Time is very close by to switch sides and become a real Bull ... lol

https://www.marketwatch.com/story/u-k-response-to-crisis-style-bond-moves-revives-debate-about-a-fed-pivot-11664393364?mod=mw_latestnews (https://www.marketwatch.com/story/u-k-response-to-crisis-style-bond-moves-revives-debate-about-a-fed-pivot-11664393364?mod=mw_latestnews)

[JohnnyTheHorse]

SPY and QQQ have held support, which was expected as we approached them with longer timeframe RSI's at oversold levels, as well as the DXY overextended. Until the bulls prove otherwise, this bounce is just bear market continuation to cool off RSI levels before another leg down.

[bull....]

Mr Bull ...Main point to note here is the big discomfort of powerful Central Banks at fast rising yields . Fighting inflation is good for markets but preservation of markets is even more important . They do not want to repeat the mistakes of GFC ....Lehman Bros style ....they ready to step in with liquidity when push comes to shove

Stock Markets will take solace from that ...we may slowly drift down after a bounce but now further capitulation risks have been minimised

US 10Y at 4% markets have seen and discounted ...I will be very surprised markets actually needs to sustain anything much higher then that ahead

Time is very close by to switch sides and become a real Bull ... lol

https://www.marketwatch.com/story/u-k-response-to-crisis-style-bond-moves-revives-debate-about-a-fed-pivot-11664393364?mod=mw_latestnews (https://www.marketwatch.com/story/u-k-response-to-crisis-style-bond-moves-revives-debate-about-a-fed-pivot-11664393364?mod=mw_latestnews)

they stepped in because politicians had destroyed the economy with dumb policy..... had no choice. it was evident something had to happen when most mortgage lending froze up

[Aaron]

Pointless prognostication but is the bottom in???

Has the UK central bank confirmed that central banks will always be there to back stop financial markets despite inflation?

I am assuming today's positivity in financial markets is solely due to the actions of the UK central bank. Possibly I am a bit cynical and there has been other positive news? Is there anything else driving the market today other than central banks?

Maybe inflation is showing signs of slowing down.

[bull....]

Fed Officials Reinforce Rate-Hike Calls, Say Markets Got Message
https://www.bloomberg.com/news/articles/2022-09-29/fed-s-bullard-says-markets-have-gotten-the-message-on-rate-hikes?srnd=premium-asia

they saying UK a sideshow ..... anyway we are back to business of going down. alokdhir wont be happy

[bull....]

The NZ dollar down again even though the US dollar is down :scared: faith being lost in NZ inc?
Orr and robertson both in lala land earlier in week saying inflation no worries it be back down in time for the election lol
basic economic's says how can that be when we still have negative real rates
So is Orr placating his master robertson when he said to union bosses our monetary policy tightening is near complete ?
meanwhile ardern is too busy defending racist bulling ministers to care about the economy , i mean lol sack someone who says mp's are bullies but defend someone who is a bully again. I thought she had a marketing degree
and luxon wants tax cuts just like truss in the UK ... jeepers UK2 coming ?

So here we are NZ dollar going down only one worse is the turkish lira or pound ? jeepers hate to think what the dollar be when farming rolls over

[alokdhir]

Here we go ...before I opened website I knew Bull would have beaten me to it today unlike yesterday ....Today Bull was too excited to sleep ...lol

To keep things in balanced perspective ....NZ tightening cycle is. " Mature " ....and our Gov Orr will do as planned ...two more 50bips this year and then a few months pause ....Monetary policy works with a pretty long lag ...so need give it time ...By June next year we maybe around 4.25% and holding or changing bias

This chaos is being created by overzealous FED talk which got left behind and now trying to hurry up thus causing even more pain then needed by causing major systemic risks for other economies .

NZ is doing it very smoothly ...We are really lucky that our dumb politicians are geniuses in front of others

[bull....]

you would think nz50 on the charts will have to retest 10500 to catch up with falls on oversea's markets where most are testing june lows now. surely the defensive nature of the nzx is a headwind now. dj utilities savaged last nite down 4%

[JohnnyTheHorse]

you would think nz50 on the charts will have to retest 10500 to catch up with falls on oversea's markets where most are testing june lows now. surely the defensive nature of the nzx is a headwind now. dj utilities savaged last nite down 4%

Closer to the bottom when looking at the capital index, which is the best to use if trying to compare apples with apples. This week the NZX has though lost the resilience it was showing.

[Crypto Crude]

The biggest market crash of all time is underway and politicians aren't even trying to stop it.. they are causing it ...
Stock up on food people.. next year going to be major food and energy crisis... all self created...
Aussie is running out of a fertilizer in February which is used in absolutely everything and they are not looking for alternative supplies...
Sickening

[Aaron]

The biggest market crash of all time is underway and politicians aren't even trying to stop it.. they are causing it ...
Stock up on food people.. next year going to be major food and energy crisis... all self created...
Aussie is running out of a fertilizer in February which is used in absolutely everything and they are not looking for alternative supplies...
Sickening

You buying gold as disaster insurance?

[nztx]

You buying gold as disaster insurance?


might have tried Fertiliser as insurance ? :)

[SailorRob]

you would think nz50 on the charts will have to retest 10500 to catch up with falls on oversea's markets where most are testing june lows now. surely the defensive nature of the nzx is a headwind now. dj utilities savaged last nite down 4%

How does charting a gross index compare with charting on a capital index?

[Crypto Crude]

You buying gold as disaster insurance?
Yeah will be but not just yet...
Remember precious metals crashed in 2008 global financial crisis so nothing is protected... but with government backed digital currencies slowly coming out will be for sure...
Platinum is the one man.. its 860us an oz and its 20 times more rare than gold...

[Hoop]

How does charting a gross index compare with charting on a capital index?

Gross index is share price plus money received such as dividends. Capital index is share price only.
As you can see with the charts (orange line is the gross)..the 1yr chart shows little difference but the 13 year chart shows the cumulative effect.
Most major global indexes such as S&P500 are capital indexes. As Johnny the Horse quoted it's best to compare NZ50C with the likes of S&P500 as they are both capital indexes (comparing apples with apples).

The NZ50G is commonly used in NZ..I fail to understand why as most investors don't or not able to reinvest their dividends. Some companies have reinvestment plans but those that haven't it's very costly in fees to buy the small amount of shares on the Market with the money you received from tax deducted dividend. This makes the NZ50G look redundant from an investor point of view.
Also the NZSE listed stocks have different dividend payouts trends and differing tax treatments than overseas stocks so overall you can't compare NZX50G with any other global gross indices either as the longer the time period the more incompatible they become (see the two charts below).

14198

[Muse]

Gross index is share price plus money received such as dividends. Capital index is share price only.<br>
As you can see with the charts (orange line is the gross)..the 1yr chart shows little difference but the 13 year chart shows the cumulative effect.<br>
Most major global indexes such as S&amp;P500 are capital indexes. As Johnny the Horse quoted it's best to compare NZ50C with the likes of S&amp;P500 as they are both capital indexes (comparing apples with apples).<br>

The NZ50G is commonly used in NZ..I fail to understand why as most investors don't or not able to reinvest their dividends. Some companies have reinvestment plans but those that haven't it's very costly in fees to buy the small amount of shares on the Market with the money you received from tax deducted dividend. This makes the NZ50G look redundant from an investor point of view.<br>
Also the NZSE listed stocks have different dividend payouts trends and differing tax treatments than overseas stocks so overall you can't compare NZX50G with any other global gross indices either as the longer the time period the more incompatible they become (see the two charts below).<br>
<br>
<img src="https://www.sharetrader.co.nz/attachment.php?attachmentid=14198&amp;stc=1" attachmentid="14198" alt="" id="vbattach_14198" class="previewthumb size_fullsize"><br>

the story often told is the NZX50G was introduced by Mark Weldon after the woeful run of the main capital index. Things look a bit rosier having dividends deemed automatically reinvested on ex date without fees and compounded over time than a pure capital index - particularly as our listed market has a disproportionate number of high yielding low growth constituents. The story concludes that the vast majority of main indices around the world are capital indices and while gross variations exist they play second fiddle to the main capital index. I dont know how much of the above is true but I've heard it enough time.

So what does it matter if an index is gross? Can joe blog match it? A gross index is impossibly efficient with no transaction costs. The dividends are reinvested on ex date which is often weeks in advance of the cash actually being received and then the lag from which a person chooses to reinvest. I know I dont automatically reinvest everything when it comes in - sometimes I let it pool, sometimes I use it to pay a credit card, etc. what does that timing difference really mean? Well in a bull market it makes a difference as it allows the dividends to compound quickly. Over the long term markets go up, so it gives a slight advantage in compounding. Small things over the long term can add up.

[bull....]

bad end to the week for US markets

sept lived up to its reputation as the worst mth of the yr
utilities had a disaster of a mth down 9% for the mth

[alokdhir]

Close below 3600 is notable ....now both can happen ....big and quick down capitulation or New monthly positive start and recovery .

[winner69]

What's the saying for US punters - sell in May and go away .....and come backin November

So looks like we have to endure a down October as well

And October is famous for some really bad days eh

[Panda-NZ-]

I compiled a list by month of performance breakdowns since 2000 (low variance and high percent is better):

Small caps (russell 2000 index)

https://datastudio.google.com/reporting/4da78108-3e9d-4936-b32c-9b6c649e8502

Dow Jones Index:

https://datastudio.google.com/reporting/974c87ed-cb5a-4e2c-bacd-df9213eec233

[SailorRob]

[QUOTE=Hoop;977219]Gross index is share price plus money received such as dividends. Capital index is share price only.
As you can see with the charts (orange line is the gross)..the 1yr chart shows little difference but the 13 year chart shows the cumulative effect.
Most major global indexes such as S&P500 are capital indexes. As Johnny the Horse quoted it's best to compare NZ50C with the likes of S&P500 as they are both capital indexes (comparing apples with apples).

The NZ50G is commonly used in NZ..I fail to understand why as most investors don't or not able to reinvest their dividends. Some companies have reinvestment plans but those that haven't it's very costly in fees to buy the small amount of shares on the Market with the money you received from tax deducted dividend. This makes the NZ50G look redundant from an investor point of view.
Also the NZSE listed stocks have different dividend payouts trends and differing tax treatments than overseas stocks so overall you can't compare NZX50G with any other global gross indices either as the longer the time period the more incompatible they become (see the two charts below).

Share price plus money received and reinvested.

Yeah I was highlighting the fact that these people going on about charting the retracements etc of the different indexes and going on about the NZ50G actually have no idea that they are dealing with a TOTALLY different index.

[bull....]

i think oct be shaped by fed and geo politics

inflation core data released today kept rising

Fed’s preferred gauge shows inflation accelerated even more than expected in August
https://www.cnbc.com/2022/09/30/pce-inflation-august-2022-inflation-accelerated-even-more-than-expected-in-august.html

so no let up in fed tightening i reckon unless something breaks

putin annexed territory so what happens now when ukraine attacks ? so called new russian territory

[SailorRob]

<br>

the story often told is the NZX50G was introduced by Mark Weldon after the woeful run of the main capital index. Things look a bit rosier having dividends deemed automatically reinvested on ex date without fees and compounded over time than a pure capital index - particularly as our listed market has a disproportionate number of high yielding low growth constituents. The story concludes that the vast majority of main indices around the world are capital indices and while gross variations exist they play second fiddle to the main capital index. I dont know how much of the above is true but I've heard it enough time.

So what does it matter if an index is gross? Can joe blog match it? A gross index is impossibly efficient with no transaction costs. The dividends are reinvested on ex date which is often weeks in advance of the cash actually being received and then the lag from which a person chooses to reinvest. I know I dont automatically reinvest everything when it comes in - sometimes I let it pool, sometimes I use it to pay a credit card, etc. what does that timing difference really mean? Well in a bull market it makes a difference as it allows the dividends to compound quickly. Over the long term markets go up, so it gives a slight advantage in compounding. Small things over the long term can add up.


Yes that is true and Brian Gaynor used to highlight it often.

Great points as to the efficiency being impossible to match, only one in a thousand would realise that the NZ50G is totally bogus for these reasons and more.

The actual index as you would compare to the SP500 only reached it's 1987 high in 2018.

[bull....]

How does charting a gross index compare with charting on a capital index?

makes no diff to me i make money off any index with charting but hoops explanation is great on the diff between the two

[SailorRob]

makes no diff to me i make money off any index with charting but hoops explanation is great on the diff between the two


Oh man.

Bull when is your fund starting? I am standing by to invest!

You are amazing.

But still working the day job eh?

Imagine if you devoted all your time to making money off ANY index with 'Charting'

You'd soak up all of the worlds capital in no time.

I've increased my bet to $500,000 NZD

Let get this going.

[SailorRob]

makes no diff to me i make money off any index with charting but hoops explanation is great on the diff between the two

Just so everyone here is clear, can you confirm that you are saying;

You make money off any index you choose by 'charting' and that this money is consistently made and beats the returns of the respective indexes over the long term?


Thanks.

[alokdhir]

Just so everyone here is clear, can you confirm that you are saying;

You make money off any index you choose by 'charting' and that this money is consistently made and beats the returns of the respective indexes over the long term?


Thanks.

IMHO ...No one can do that ...TA is a hindsight analysis mostly ...but like Hoop says it gives u probability play with SL for short term people with not enough certainty to go big bucks

TA combined with some FA does little better ....but time in the market with FA as basis with small help from TA should be ideal for bigger funds

All big funds have about 10% say of TA analysts on roles

[alokdhir]

What's the saying for US punters - sell in May and go away .....and come backin November

So looks like we have to endure a down October as well

And October is famous for some really bad days eh

Mid October onwards we should be on solid ground ....imho

[SailorRob]

IMHO ...No one can do that ...TA is a hindsight analysis mostly ...but like Hoop says it gives u probability play with SL for short term people with not enough certainty to go big bucks

TA combined with some FA does little better ....but time in the market with FA as basis with small help from TA should be ideal for bigger funds

All big funds have about 10% say of TA analysts on roles


Yep and they almost all underperform the market too (big funds).

The only person who can consistently time the market profitable in all of recorded history is Bull.

A very apt name he's chosen for himself, well the fist half anyway. Readers can guess for themselves the second part of his name.

[SailorRob]

Mid October onwards we should be on solid ground ....imho


Honest opinion or not....

Nobody knows.

Markets could be at current levels in 10 years time.

What happens from October onwards, nobody knows, opinions are totally meaningless.

[alokdhir]

Honest opinion or not....

Nobody knows.

Markets could be at current levels in 10 years time.

What happens from October onwards, nobody knows, opinions are totally meaningless.


IF u give any credit to history and past experiences then U will know Bear markets typically last 10 months ....so now u decide when ...

But it seems u are hell bent being an antagonist ....so its ok ...as u say and think

[percy]

From Sharecafe.

Key things for investors to bear in mind
Sharp share market falls are stressful for investors as no one likes to see their investments fall in value. And try as one may, it’s never easy to accurately predict economies and shares. So, at times like these it’s important to focus on basic investment principles. In particular, these things are worth keeping in mind:

share market pullbacks are healthy and normal – their volatility is the price we pay for the higher returns they provide over the long term;
it’s very hard to time market moves so the key is to stick to an appropriate long-term investment strategy;
selling shares after a fall locks in a loss;
share pullbacks provide opportunities for investors to buy them more cheaply;
shares invariably bottom with maximum bearishness;
Australian shares still offer an attractive income (or cash) flow relative to bank deposits; and
to avoid getting thrown off a long-term strategy – it’s best to turn down the noise around all the negative news flow.

[Beau]

Thanks for sharing Percy

[SailorRob]

IF u give any credit to history and past experiences then U will know Bear markets typically last 10 months ....so now u decide when ...

But it seems u are hell bent being an antagonist ....so its ok ...as u say and think


I'm not talking about bear markets mate, I said that the market could be at this level in 10 years time.

If you have any knowledge of history and current conditions you will know this is very possible.

As I have told you recently the NZ market reached 1987 level in 2018. How many years is that?

Please tell me you know the SP500 was at the same level in 2008 as in 1997 or 2000 and 2013?

So we just look at some headline about bear markets 10 months, get a calendar out... then based of this incredible analysis publicly post that IMOH its all on from October?

Is it really that easy?

[SailorRob]

From Sharecafe.

Key things for investors to bear in mind
Sharp share market falls are stressful for investors as no one likes to see their investments fall in value. And try as one may, it’s never easy to accurately predict economies and shares. So, at times like these it’s important to focus on basic investment principles. In particular, these things are worth keeping in mind:

share market pullbacks are healthy and normal – their volatility is the price we pay for the higher returns they provide over the long term;
it’s very hard to time market moves so the key is to stick to an appropriate long-term investment strategy;
selling shares after a fall locks in a loss;
share pullbacks provide opportunities for investors to buy them more cheaply;
shares invariably bottom with maximum bearishness;
Australian shares still offer an attractive income (or cash) flow relative to bank deposits; and
to avoid getting thrown off a long-term strategy – it’s best to turn down the noise around all the negative news flow.


Good stuff thanks for sharing.

[bull....]

Oh man.

Bull when is your fund starting? I am standing by to invest!

You are amazing.

But still working the day job eh?

Imagine if you devoted all your time to making money off ANY index with 'Charting'

You'd soak up all of the worlds capital in no time.

I've increased my bet to $500,000 NZD

Let get this going.

what are you dribbling on about again

i spell it out slowly
what i said was you can use charting to make money on any thing whether its index;s of any nature , stocks , currencies etc etc etc of course i dont expect you to understand this but again let me tell you everything is not black and white people can master all methods of what ever they choose to make money in the markets.

you keep telling people they should be a fund manager course they are successful it does not work that way , you could be warren buffet and the fma would still not licence you based on results alone. results matter little in becoming a fund manager

by the way when you answer my question on the article i posted about compounding over the long term ( which was a topic you say you know lots about ) maybe ill be inclined to think you know more about investing rather than just looking to antagonize

[Snoopy]

You keep telling people they should be a fund manager course they are successful it does not work that way , you could be warren buffet and the fma would still not licence you based on results alone. Results matter little in becoming a fund manager.


Very surprised to read this. I thought to be officially recognised as a bonafide fund manager, underperforming the market was a requirement ;-P

SNOOPY

[SailorRob]

what are you dribbling on about again

i spell it out slowly
what i said was you can use charting to make money on any thing whether its index;s of any nature , stocks , currencies etc etc etc of course i dont expect you to understand this but again let me tell you everything is not black and white people can master all methods of what ever they choose to make money in the markets.

you keep telling people they should be a fund manager course they are successful it does not work that way , you could be warren buffet and the fma would still not licence you based on results alone. results matter little in becoming a fund manager

by the way when you answer my question on the article i posted about compounding over the long term ( which was a topic you say you know lots about ) maybe ill be inclined to think you know more about investing rather than just looking to antagonize


Bull*^%$, you spelling anything, whether it be slow or fast is probably not a good idea.

Just start a company and have limited partners. It doesn't need to be a formal fund. Just start a company and a few of us can be shareholders, very very simple.

I answered the questions regarding the article in a reply to someone else on this thread.

If you did what the article was proposing yes you could be in a world of trouble. It's a very far cry from dollar cost averaging as I'm talking about. From memory most of the stuff in the article was correct, but again not what I'm talking about and it didn't talk about reinvesting dividends from memory.

One thing turning down my 50k Bull*^&% but 500? And when I'm paying for the audit too? You used the cost of the audit as one of your excuses conveniently forgetting that I'd offered to cover it whatever the cost.

[SailorRob]

what are you dribbling on about again

i spell it out slowly
what i said was you can use charting to make money on any thing whether its index;s of any nature , stocks , currencies etc etc etc of course i dont expect you to understand this but again let me tell you everything is not black and white people can master all methods of what ever they choose to make money in the markets.

you keep telling people they should be a fund manager course they are successful it does not work that way , you could be warren buffet and the fma would still not licence you based on results alone. results matter little in becoming a fund manager

by the way when you answer my question on the article i posted about compounding over the long term ( which was a topic you say you know lots about ) maybe ill be inclined to think you know more about investing rather than just looking to antagonize

Here it is, reposted for you below.




As for the article he posted... Who was ever talking about investing a lump sum into the market at one time and then walking away? In this case of course you may not get average returns, unless you are investors for a very long time. While you guys can make many claims you cannot challenge the mathematical definition of average. We are talking about investing capital as you accumulate it and then reinvesting dividends which over any period of time will see you get the average return of the market...

Many markets globally are at the same levels now as they were in the year 2000 or late 90's. EVEN if you had invested a lump sum at the top 22 years ago, you would have still done ok with reinvesting dividends as you would be investing into the lows that followed. There are many calculators which can show you exactly what returns you would get depending on various factors.

Don't just read articles, think about things for yourselves and challenge everything.

[SailorRob]

what are you dribbling on about again

i spell it out slowly
what i said was you can use charting to make money on any thing whether its index;s of any nature , stocks , currencies etc etc etc of course i dont expect you to understand this but again let me tell you everything is not black and white people can master all methods of what ever they choose to make money in the markets.

you keep telling people they should be a fund manager course they are successful it does not work that way , you could be warren buffet and the fma would still not licence you based on results alone. results matter little in becoming a fund manager

by the way when you answer my question on the article i posted about compounding over the long term ( which was a topic you say you know lots about ) maybe ill be inclined to think you know more about investing rather than just looking to antagonize


Forget about a fund Bull*&$#, why are you not full time professional just for yourself then?

[winner69]

Guy on cnbc - looks and feels like October 1987

Another guy pointed out lastweek was the 2nd largest retail selling week in the last 5 years.

Suppose that’s not good news

[bull....]

Here it is, reposted for you below.




As for the article he posted... Who was ever talking about investing a lump sum into the market at one time and then walking away? In this case of course you may not get average returns, unless you are investors for a very long time. While you guys can make many claims you cannot challenge the mathematical definition of average. We are talking about investing capital as you accumulate it and then reinvesting dividends which over any period of time will see you get the average return of the market...

Many markets globally are at the same levels now as they were in the year 2000 or late 90's. EVEN if you had invested a lump sum at the top 22 years ago, you would have still done ok with reinvesting dividends as you would be investing into the lows that followed. There are many calculators which can show you exactly what returns you would get depending on various factors.

Don't just read articles, think about things for yourselves and challenge everything.





on that article he mentioned dollar cost averaging works till it doesnt so he did cover it and he also mentioned that the period from 2009 - end 2021 was only time in history that compounding truely worked but then mentioned that from now on markets could revert to the mean which is happening now so therefore in another year this golden age from 2009 - 2021 will just look no different to any other period in history for compounded returns

so if you dive deeper into dollar cost average for ever no matter the current market condition and re-invest the dividend's we will be ok as you say

my question to you before on this was how do we know we picked the right stock to do this strategy. ? thinking off chase corp or enron in the back of my mind. to me it is only in hindsight you will truely know if you picked the right stock to make dollar cost averaging work

[ynot]

Guy on cnbc - looks and feels like October 1987

Another guy pointed out lastweek was the 2nd largest retail selling week in the last 5 years.

Suppose that’s not good news
I suspect another 87 is well on the cards.
If it arrives the problem I have is what to buy but I guess at that point it will be obvious.

[tim23]

Guy on cnbc - looks and feels like October 1987

Another guy pointed out lastweek was the 2nd largest retail selling week in the last 5 years.

Suppose that’s not good news

When there is selling there is also buying to match?

[tim23]

I'm not talking about bear markets mate, I said that the market could be at this level in 10 years time.

If you have any knowledge of history and current conditions you will know this is very possible.

As I have told you recently the NZ market reached 1987 level in 2018. How many years is that?

Please tell me you know the SP500 was at the same level in 2008 as in 1997 or 2000 and 2013?

So we just look at some headline about bear markets 10 months, get a calendar out... then based of this incredible analysis publicly post that IMOH its all on from October?

Is it really that easy?
Are you sure the NZ market got to its 1987 level in 2018? I thought the indices were not in any way comparable?

[Hoop]

Close below 3600 is notable ....now both can happen ....big and quick down capitulation or New monthly positive start and recovery ..
I'm in the same camp as this guy (https://stockcharts.com/articles/arthurhill/2022/09/understanding-bear-markets-and-102.html?mc_cid=6c8262867a&mc_eid=9cc8c14836) (phase 2). Forget the subscription advert tempting article and just focus on the 3 stages (phases) of a Bear market cycle and assess where we are at within the cycle..
Note: Cycle-wise NZ50C maturity is similar to Wall St.

Beware rambling post from an old dude(me) below:

This bear so far has been a teddy bear...a cute fluffy likeable bear that isn't damaging anyone to any great degree, accepted and liked because it is a rational action of a needed fundamental correction for the greater future good. The financial world is still mostly structurally intact, operating with sane fundamental decisions and outcomes..There has been a number of (teddy) bear cycles ( <-35% ) in the past..

Its a grizzly bear that you hate, they can be born grizzly or they can materialise from a teddy bear.. and... that is when the financial world breaks down and goes irrational and emotionally/fundamentally insane

Have we seen a panic yet or capitulation event? Teddy bears have minor panic attacks and sudden drops but not quite classed as capitulation events because rationale is still intact..I think we are exposed and gaining a Teddy bear experience at the moment.

We certainly haven't yet seen continuous day after day falls of -3% to -5% or worse that would define as a Capitulation event (Bear market cycles can have 2 or more capitulation events). The two go hand to hand, Panic selling often creates a Capitulation event.

For many younger people (young financial advisors) though this present market behaviour may seem like periods of panic or capitulation to them.

I'm old enough to have experienced many Bear Markets, some are forgetful Teddybear events. Other more rarer grizzly types stick in your memory because they are the ones that mentally sucks you in and spits you out...endgame being emotional and financially drained and a feeling of disillusionment/disgust towards the market with "I will never enter the market again"...and ...many don't...one reason why markets can take years to recover that lost ground.

A problem nowadays is many investors (active and passive[e.g Kiwi Saver]) and the influential well qualified financial people are under 35 and weren't investing/working in the marketplace to experience a grizzly bear first hand..and really you have to experience at least 2 Grizzly bear cycles to gain knowledge and emotions. Financial people under 45 haven't experienced that..only read about it or seen data and haven't experienced the mental emotion side that can sway the thinking and decision making of the best of experts. Remember you are dealing with herd behaviour to which you are apart of , therefore your survival instincts are heighten to the point of running with the herd..Fighting your basic instincts puts you in a bad emotional state, you can be criticized for thinking different to the herd (e.g stick to the plan and don't sell..that would be a bad image for fund managers from the herd..eh:t_down:).

You may look at the history and data and say I will stay in the market and ride it out because history says that's best..but when a grizzly bear enters the market you have to experience all the bad news/ forecast bad news/ the emotional toll/ doubt/ panic sell outs/ this time is different/paradigm shifting/fighting your intincts/indecisions/misinformed media from so called "experts"/dilemmas/unanswerable questions/no right or wrong/disillusionment/ etc etc.. and...then... try to make the "right" decision.

In hindsight after the smoke clears and you can see the carnage you get to understand the rationale of irrationale with fund managers, investors, media and like, perceiving no end in sight after many months of a savage bear cycle advising everyone and self included to sell out before irreversible damage happens and buy bonds..eh..If they advise you to keep sticking it out they go against the herds decision and they lose reputation and a portion of their clients.
A rock and a hard place scenario..

So if you can't see that happening at the moment then either we are going through a shallow Bear Market Cycle (Teddybear) or we are in stage 2 of a more common 3 stage Bear market Cycle...

The later stages of 2 and early stage 3 is when irrational market behaviour becomes more evident...

[alokdhir]

.
I'm in the same camp as this guy (https://stockcharts.com/articles/arthurhill/2022/09/understanding-bear-markets-and-102.html?mc_cid=6c8262867a&mc_eid=9cc8c14836) (phase 2). Forget the subscription advert tempting article and just focus on the 3 stages (phases) of a Bear market cycle and assess where we are at within the cycle..
Note: Cycle-wise NZ50C maturity is similar to Wall St.

Beware rambling post from an old dude(me) below:

This bear so far has been a teddy bear...a cute fluffy likeable bear that isn't damaging anyone to any great degree, accepted and liked because it is a rational action of a needed fundamental correction for the greater future good. The financial world is still mostly structurally intact, operating with sane fundamental decisions and outcomes..There has been a number of (teddy) bear cycles ( <-35% ) in the past..

Its a grizzly bear that you hate, they can be born grizzly or they can materialise from a teddy bear.. and... that is when the financial world breaks down and goes irrational and emotionally/fundamentally insane

Have we seen a panic yet or capitulation event? Teddy bears have minor panic attacks and sudden drops but not quite classed as capitulation events because rationale is still intact..I think we are exposed and gaining a Teddy bear experience at the moment.

We certainly haven't yet seen continuous day after day falls of -3% to -5% or worse that would define as a Capitulation event (Bear market cycles can have 2 or more capitulation events). The two go hand to hand, Panic selling often creates a Capitulation event.

For many younger people (young financial advisors) though this present market behaviour may seem like periods of panic or capitulation to them.

I'm old enough to have experienced many Bear Markets, some are forgetful Teddybear events. Other more rarer grizzly types stick in your memory because they are the ones that mentally sucks you in and spits you out...endgame being emotional and financially drained and a feeling of disillusionment/disgust towards the market with "I will never enter the market again"...and ...many don't...one reason why markets can take years to recover that lost ground.

A problem nowadays is many investors (active and passive[e.g Kiwi Saver]) and the influential well qualified financial people are under 35 and weren't investing/working in the marketplace to experience a grizzly bear first hand..and really you have to experience at least 2 Grizzly bear cycles to gain knowledge and emotions. Financial people under 45 haven't experienced that..only read about it or seen data and haven't experienced the mental emotion side that can sway the thinking and decision making of the best of experts. Remember you are dealing with herd behaviour to which you are apart of , therefore your survival instincts are heighten to the point of running with the herd..Fighting your basic instincts puts you in a bad emotional state, you can be criticized for thinking different to the herd (e.g stick to the plan and don't sell..that would be a bad image for fund managers from the herd..eh:t_down:).

You may look at the history and data and say I will stay in the market and ride it out because history says that's best..but when a grizzly bear enters the market you have to experience all the bad news/ forecast bad news/ the emotional toll/ doubt/ panic sell outs/ this time is different/paradigm shifting/fighting your intincts/indecisions/misinformed media from so called "experts"/dilemmas/unanswerable questions/no right or wrong/disillusionment/ etc etc.. and...then... try to make the "right" decision.

In hindsight after the smoke clears and you can see the carnage you get to understand the rationale of irrationale with fund managers, investors, media and like, perceiving no end in sight after many months of a savage bear cycle advising everyone and self included to sell out before irreversible damage happens and buy bonds..eh..If they advise you to keep sticking it out they go against the herds decision and they lose reputation and a portion of their clients.
A rock and a hard place scenario..

So if you can't see that happening at the moment then either we are going through a shallow Bear Market Cycle (Teddybear) or we are in stage 2 of a more common 3 stage Bear market Cycle...

The later stages of 2 and early stage 3 is when irrational market behaviour becomes more evident... "

The blue callouts highlight two bear market bounces of at least 20%. These two bounces occurred over a year after the S&P 500 peaked and the index moved to new lows after these bounces. We already witnessed a 17% bear market rally from mid June to mid August. Judging from the last two bear markets, we can expect another counter-trend bounce at some point, but this is unlikely to be the bounce that ends the bear market. "

The above from the article is worth noting ....He is expecting another counter trend rally / bounce !!! Maybe soon and then the final plunge ? He also expects this will also not be able to break the previous resistance of 4800 ....

Interesting stuff Hoop ...lets c what happens ....I do agree history repeats as its the history of collective human behaviour which remains the same as humans are same ....TA is map of collective human responses / behaviour
https://www.nzherald.co.nz/business/liam-dann-brace-yourself-for-an-action-packed-inflation-reveal-this-month/PRG5PQFL7OI2TWSH2YQXCRP5SA/

This article talks about important data which can decide plunge or another bounce ....coincides with important mid Oct time frame given initially of bear market life !!

[Crypto Crude]

This is the biggest statement I've ever made...

I'm more and more convinced that the dow jones could go to zero...
Ie the end of the stockmarket...

[ynot]

This is the biggest statement I've ever made...

I'm more and more convinced that the dow jones could go to zero...
Ie the end of the stockmarket...

Um.... That would be good for crypto right ?

[Baa_Baa]

This is the biggest statement I've ever made...

I'm more and more convinced that the dow jones could go to zero...
Ie the end of the stockmarket...

Good luck with that. DOW to zero!!!!! End of the stockmarket!!!!!, comprising the vast majority of all the wealth in the global sharemarkets? Brilliant, Copy us todays Tweet that has informed your latest view.

How not to be a dick?
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Don't be a dick.

[Snoopy]

This is the biggest statement I've ever made...

I'm more and more convinced that the dow jones could go to zero...
Ie the end of the stockmarket...


You are wrong. I have just contacted an American broker and put a buy order in for 1c as a collective bid for the whole dow-jones index fund, IOW all the companies that make it up in its entirety, for just 1c. Thus I have neatly headed off your 'prophecy of doom' CC at the pass, in the very best wild west tradition.

SNOOPY

[Muse]

You are wrong. I have just contacted an American broker and put a buy order in for 1c as a collective bid for the whole dow-jones index fund, IOW all the companies that make it up in its entirety, for just 1c. Thus I have neatly headed off your 'prophecy of doom' CC at the pass, in the very best wild west tradition.

SNOOPY

I've just finished my counterbid at 2c. Things are heating up again - 100% increase is bid price - do I smell a bull market?

Hard work underwriting the global economy, but someone has got to do it.

[kiora]

Positioning for rebound is just as/more important, than positioning for any falls from here on in.

Which companies will rebound faster than the pack?

Large cap liquid stocks with low debt bounce the earliest ?

Or .........

[Jaa]

Anyone watching Credit Suisse?

Share price is down 60% this year and market cap is now just $US10b which isn't a lot for the world's 6th biggest investment bank. They lost a lot on some poor private equity lending and now their credit default swaps are nearing GFC levels.

Never a crisis till the CEO denies it...
Credit Suisse has strong capital base and liquidity -CEO memo (https://www.reuters.com/business/finance/credit-suisse-has-strong-capital-base-liquidity-ceo-memo-2022-09-30/)

[Crypto Crude]

Anyone watching Credit Suisse?

Share price is down 60% this year and market cap is now just $US10b which isn't a lot for the world's 6th biggest investment bank. They lost a lot on some poor private equity lending and now their credit default swaps are nearing GFC levels.

Never a crisis till the CEO denies it...
Credit Suisse has strong capital base and liquidity -CEO memo (https://www.reuters.com/business/finance/credit-suisse-has-strong-capital-base-liquidity-ceo-memo-2022-09-30/)

Yeah man its going under.. same with deutsche bank...looking 2-3 times worse than the global financial crisis of 2008 as a pretty sure bet I'd say...
We never learnt from the mistakes of the GFC but now we have so many other layers to the problem...

[alokdhir]

Positioning for rebound is just as/more important, than positioning for any falls from here on in.

Which companies will rebound faster than the pack?

Large cap liquid stocks with low debt bounce the earliest ?

Or .........

U r spot on Kiora ...Large caps will bounce the first and big bounce will happen some time in October ....maybe after CPI data on 13th Oct ....before that good chance of drift down ...after CPI capitulation or big rally ...depends on CPI numbers

[bull....]

Yeah man its going under.. same with deutsche bank...looking 2-3 times worse than the global financial crisis of 2008 as a pretty sure bet I'd say...
We never learnt from the mistakes of the GFC but now we have so many other layers to the problem...

true could be possible with the state of europe to come

Trading Like a Lehman Moment’ — Credit Suisse, Deutsche Bank Suffer From Distressed Valuations as the Banks’ Credit Default Insurance Nears 2008 Levels


Credit Suisse and Deutsche Bank Valuations Have Dive-Bombed — Investors Discuss the Systemic Risk to the Global Economy



Large Investor Says Credit Suisse CDS Is Trading Like a ‘Lehman Moment,’ Wallstformainst CEO Says ‘Anyone Who Fully Trusts Credit Suisse’s accounting Also Believes in Unicorns and the Tooth Fairy



https://news.bitcoin.com/trading-like-a-lehman-moment-credit-suisse-deutsche-bank-suffer-from-distressed-valuations-as-the-banks-credit-default-insurance-nears-2008-levels/


also one must remember in history something has broken every time the fed tighten's ..... so is it this. who know's we all know after the fact what it is

[causecelebre]

Oh man.

Bull when is your fund starting? I am standing by to invest!

You are amazing.

But still working the day job eh?

Imagine if you devoted all your time to making money off ANY index with 'Charting'

You'd soak up all of the worlds capital in no time.

I've increased my bet to $500,000 NZD

Let get this going.

Dog with a bone, mate. Give it a rest or get a room

[bull....]

futures in europe taking a tumble dragging all markets down now. credit suisse ?

[Rawz]

futures in europe taking a tumble dragging all markets down now. credit suisse ?

usually where there is smoke there is fire

[SailorRob]

Are you sure the NZ market got to its 1987 level in 2018? I thought the indices were not in any way comparable?


Hi Tim, I've done a fair bit of work in the past to establish this but the late great Brian Gaynor is really the one who would know having been very involved since before then and commenting on such things all the way through, here is an article from 2017 where he laments that the NZ capital market was still 9% below 1987. He has factored in all the necessary changes to the indices etc.. I trust his work very much.

https://www.nzherald.co.nz/business/brian-gaynor-reflecting-on-the-heady-heights-of-87/XRZZROLCLQMZS5TSQGE5QVTIRY/ (https://www.nzherald.co.nz/business/brian-gaynor-reflecting-on-the-heady-heights-of-87/XRZZROLCLQMZS5TSQGE5QVTIRY/)


You can also look at the total values of all listed companies in 1987 and 2018.

Here is another article from around 2017 highlighting that the market still had not recovered. https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/ (https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/)

Another great resource is the book Bulls Bears and Elephants - A History of the NZ Stock Exchange https://www.amazon.com/Bulls-bears-elephants-history-Exchange/dp/0864733089 (https://www.amazon.com/Bulls-bears-elephants-history-Exchange/dp/0864733089)

More than anything this highlights how crazy 1987 really was, makes last year look tame. I was far too young to remember but my workmates remember driving around the dead bodies on the motorway under the Grafton bridge and all the BMW's parked at the top...


There are lots of major global indices that are currently trading at the same level as 20 years ago as well.

[SailorRob]

Dog with a bone, mate. Give it a rest or get a room


When you see my name on a post just don't read it, pretty simple.

Cheers.

[SailorRob]

on that article he mentioned dollar cost averaging works till it doesnt so he did cover it and he also mentioned that the period from 2009 - end 2021 was only time in history that compounding truely worked but then mentioned that from now on markets could revert to the mean which is happening now so therefore in another year this golden age from 2009 - 2021 will just look no different to any other period in history for compounded returns

so if you dive deeper into dollar cost average for ever no matter the current market condition and re-invest the dividend's we will be ok as you say

my question to you before on this was how do we know we picked the right stock to do this strategy. ? thinking off chase corp or enron in the back of my mind. to me it is only in hindsight you will truely know if you picked the right stock to make dollar cost averaging work


Sorry Bull, while I enjoy the banter I'll have to leave it there as you're not reading or understanding what I have been saying.

I have never said that you 'pick a stock' to dollar cost average. It's all there should you choose to read.

[tim23]

Yeah man its going under.. same with deutsche bank...looking 2-3 times worse than the global financial crisis of 2008 as a pretty sure bet I'd say...
We never learnt from the mistakes of the GFC but now we have so many other layers to the problem...
Probably run by men😀

[tim23]

Hi Tim, I've done a fair bit of work in the past to establish this but the late great Brian Gaynor is really the one who would know having been very involved since before then and commenting on such things all the way through, here is an article from 2017 where he laments that the NZ capital market was still 9% below 1987. He has factored in all the necessary changes to the indices etc.. I trust his work very much.

https://www.nzherald.co.nz/business/brian-gaynor-reflecting-on-the-heady-heights-of-87/XRZZROLCLQMZS5TSQGE5QVTIRY/ (https://www.nzherald.co.nz/business/brian-gaynor-reflecting-on-the-heady-heights-of-87/XRZZROLCLQMZS5TSQGE5QVTIRY/)


You can also look at the total values of all listed companies in 1987 and 2018.

Here is another article from around 2017 highlighting that the market still had not recovered. https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/ (https://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/)

Another great resource is the book Bulls Bears and Elephants - A History of the NZ Stock Exchange https://www.amazon.com/Bulls-bears-elephants-history-Exchange/dp/0864733089 (https://www.amazon.com/Bulls-bears-elephants-history-Exchange/dp/0864733089)

More than anything this highlights how crazy 1987 really was, makes last year look tame. I was far too young to remember but my workmates remember driving around the dead bodies on the motorway under the Grafton bridge and all the BMW's parked at the top...


There are lots of major global indices that are currently trading at the same level as 20 years ago as well.

Thanks- good read always enjoyed Gaynors columns and Terry Hall in the Dominion- both very good.

[bull....]

Forget about a fund Bull*&$#, why are you not full time professional just for yourself then?

good banter sailorrob , never hurt's to challenge each one's thinking
by the way I am

[bull....]

big fall in bond's US , dollar down and risk on stocks from oversold level's again at this point

In the UK govt has backtracked on there plan's which has probably helped risk on

UK finance minister pledges no more distractions after ‘tough day’ sees U-turn on top tax rate


https://www.cnbc.com/2022/10/03/uk-finance-minister-pledges-no-more-distractions-after-tax-rate-u-turn.html

dumb politic's giving a break to the rich during cost of living crisis ... hope luxon watching what happening UK

[SailorRob]

good banter sailorrob , never hurt's to challenge each one's thinking
by the way I am

Yeah well I'm still waiting.

I must say though I'm jealous of anyone who can make money off any index any time 'charting', could call them 'dial a dollar'.

You could travel the world, popping into the nearest hifi store, grab a dozen screens, plug in an away you go!

[bull....]

Yeah well I'm still waiting.

I must say though I'm jealous of anyone who can make money off any index any time 'charting', could call them 'dial a dollar'.

You could travel the world, popping into the nearest hifi store, grab a dozen screens, plug in an away you go!

guess that's the point , do what you want when you want no master to ask if its alright to take a toilet break.
makes you wonder why so called guru fund manager's are not doing the same ? is it because they are doing a public service to make us all rich or is it to make themselve's rich ?
I think personally people are better off trying to make themselves good investors rather than relying on a fund manager to do it for them.

[alokdhir]

NZD level of 57.2 USD is acting as a pivotal level of Risk at the moment ....even after almost 900 points rally ...its still holding ...

[winner69]

U r spot on Kiora ...Large caps will bounce the first and big bounce will happen some time in October ....maybe after CPI data on 13th Oct ....before that good chance of drift down ...after CPI capitulation or big rally ...depends on CPI numbers

Big bounce sooner than you though mate .... good call

[alokdhir]

Big bounce sooner than you though mate .... good call

Its too early ...maybe just small aberration to relieve pressure ....not very convinced with it ....but yields are down big time maybe that caused the bounce

Non farm payrolls and CPI are important data to bounce from if they better then expected ...so still in woods as per me ...lol

S&P 500 bounced of 200 WeekSMA ...important level around 3580....

[SailorRob]

guess that's the point , do what you want when you want no master to ask if its alright to take a toilet break.
makes you wonder why so called guru fund manager's are not doing the same ? is it because they are doing a public service to make us all rich or is it to make themselve's rich ?
I think personally people are better off trying to make themselves good investors rather than relying on a fund manager to do it for them.

Bull, you're 100% correct. Hit the nail on the head.

Same with financial advisors... Why do they need to hock their advice for cash...

[SailorRob]

Originally Posted by SailorRob https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=977314#post977314)
Honest opinion or not....

Nobody knows.

Markets could be at current levels in 10 years time.

What happens from October onwards, nobody knows, opinions are totally meaningless.







IF u give any credit to history and past experiences then U will know Bear markets typically last 10 months ....so now u decide when ...

But it seems u are hell bent being an antagonist ....so its ok ...as u say and think


Druck on CNBC recently;

STANLEY DRUCKENMILLER: The problem is we’ve become a little complacent about what does “long term” mean. If you bought the Dow in 1929, you got back to even in 1954. As you just pointed out, the Dow was in 1966 where it was in 1982.

I’m just saying we’ve had a hurricane behind us for 30 or 40 years, and it’s reversing, and I wouldn’t be surprised -- in fact, it’s my central forecast -- the Dow won’t be much higher in ten years than it is today.

[alokdhir]

Normally the countries which have low Total Market Capitalisation / GDP ratio have done better over longer term periods ....Our NZX is very well placed that way ...maybe its due to very low retail or mum and dad participation due to our eternal love affair with anything property while USA sits on other side of spectrum with huge local and foreign retail participation and institutional support .

This low penetration of NZX gives it a long runway to improve valuations for the right companies eg RMD being US company listed there gets much better valuations and coverage by institutions while our No 1 company by market cap FPH is a poor cousin .

Overall NZX will do better as local retail participation improves while investors move away slowly from just property for retirement theme ...Kiwisavers also will help in a big way . IMHO NZX market has a bright future ahead ....

Recently premiums to NAV trends of listed Fisher funds showing great retail interest ...maybe due to ultra low saving interest rates TINA effect ....but its still around even after TD rates almost reaching 5% ...thats encouraging signs

[SailorRob]

Normally the countries which have low Total Market Capitalisation / GDP ratio have done better over longer term periods ....Our NZX is very well placed that way ...maybe its due to very low retail or mum and dad participation due to our eternal love affair with anything property while USA sits on other side of spectrum with huge local and foreign retail participation and institutional support .

This low penetration of NZX gives it a long runway to improve valuations for the right companies eg RMD being US company listed there gets much better valuations and coverage by institutions while our No 1 company by market cap FPH is a poor cousin .

Overall NZX will do better as local retail participation improves while investors move away slowly from just property for retirement theme ...Kiwisavers also will help in a big way . IMHO NZX market has a bright future ahead ....

Fair points, however there is absolutely zero chance our market outperforms the US over the long term for obvious reasons.

While what you highlight may be true, the implications of what you say is that as more participants enter it will therefore drive valuations higher... They're already up there.

It's all about return on capital over the long term. The better companies and better system will always outperform. No chance a socialist nation will touch the US.

[Aaron]

Originally Posted by SailorRob https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=977314#post977314)
Honest opinion or not....

Nobody knows.

Markets could be at current levels in 10 years time.

What happens from October onwards, nobody knows, opinions are totally meaningless.

Druck on CNBC recently;

STANLEY DRUCKENMILLER: The problem is we’ve become a little complacent about what does “long term” mean. If you bought the Dow in 1929, you got back to even in 1954. As you just pointed out, the Dow was in 1966 where it was in 1982.

I’m just saying we’ve had a hurricane behind us for 30 or 40 years, and it’s reversing, and I wouldn’t be surprised -- in fact, it’s my central forecast -- the Dow won’t be much higher in ten years than it is today.

10 years is a long time to wait to get your money back especially if you want to buy a house or enjoy retirement. Stanley seems like a thoughtful sort of a guy.

What about if Ray Dalio is right and there is a long term debt cycle and the direction of interest rates has changed. Interest rates go up asset prices go down.

Boomers cashing out of Kiwisaver although Kiwisaver has not been around long enough for them to have significant balances. Not sure how the Aussie scheme works, I wonder what percentage of the NZX Aussie pension funds hold.

Young people will be cashing out of Kiwisaver for their house deposits if house prices keep falling.

https://www.interest.co.nz/personal-finance/117857/fma-says-over-65s-withdrew-nearly-2-billion-kiwisaver-accounts-last-year

Nearly convinced myself to panic sell. Mind you the cash in the bank doesn't help if it is tied up helping the bank get out of trouble a la the Open Bank Resolution. Scary times for flighty investors.

Trust in gold? Even the gold bugs seem to be a bit embarrassed to suggest this as an option these days and where do you bury it if you bought some?

[SailorRob]

10 years is a long time to wait to get your money back especially if you want to buy a house or enjoy retirement. Stanley seems like a thoughtful sort of a guy.

What about if Ray Dalio is right and there is a long term debt cycle and the direction of interest rates has changed. Interest rates go up asset prices go down.

Boomers cashing out of Kiwisaver although Kiwisaver has not been around long enough for them to have significant balances. Not sure how the Aussie scheme works, I wonder what percentage of the NZX Aussie pension funds hold.

Young people will be cashing out of Kiwisaver for their house deposits if house prices keep falling.

https://www.interest.co.nz/personal-finance/117857/fma-says-over-65s-withdrew-nearly-2-billion-kiwisaver-accounts-last-year

Nearly convinced myself to panic sell. Mind you the cash in the bank doesn't help if it is tied up helping the bank get out of trouble a la the Open Bank Resolution. Scary times for flighty investors.

Trust in gold? Even the gold bugs seem to be a bit embarrassed to suggest this as an option these days and where do you bury it if you bought some?


Yes but if you keep investing throughout and reinvesting dividends then you'll still do just fine.

Obviously nothing is certain, I'm just highlighting that 10, 20 and 30 year periods where the market is at the same level is very normal, after all NZ has just come through a 30 year period. Not a problem unless you put in all your capital at the top.

Good points you raise however selling isn't the solution, keeping on investing is.

Gold... well stocks have outperformed Gold by 11,700% PER year over the last 200 years or so (to 1999). Yes you read that correct.

Gold returned 12% REAL over the 200 years to 1999 (as it should as it's just holding value not producing any) while equities averaged 7% per year real over those 200 years. 12% total over 200 years vs 7% per year is a 117 times difference per year.


Can you time the periods where Gold outperforms?

[Aaron]

Gold... [/B]well stocks have outperformed Gold by 11,700% PER year over the last 200 years or so (to 1999). Yes you read that correct.

Gold returned 12% REAL over the 200 years to 1999 (as it should as it's just holding value not producing any) while equities averaged 7% per year real over those 200 years. 12% total over 200 years vs 7% per year is a 117 times difference per year.

Can you time the periods where Gold outperforms?

I am confused stocks have outperformed gold by 11,700% but gold had a real return of 12% compared to equities 7%. How can both of those statements be right.

As gold is faith based investing it is difficult admittedly but if I were to guess, I would think that gold outperforms if central banks around the world print lots of money in the face of a new crisis and drop interest rates back to zero.

[SailorRob]

I am confused stocks have outperformed gold by 11,700% but gold had a real return of 12% compared to equities 7%. How can both of those statements be right.

As gold is faith based investing it is difficult admittedly but if I were to guess, I would think that gold outperforms if central banks around the world print lots of money in the face of a new crisis and drop interest rates back to zero.

Gold 12% total return over 200 years. Stocks 7% CAGR. So average 7% per year.

That wasn't 11,700%. It was 11,700% per year for 200 years.

Gold isn't investing at all but speculating. It can outperform over certain periods but good luck timing when.

If rates go to zero again, particularly long end of the curve then obviously stocks go to the moon. Gold... Who knows. Doesn't produce anything.

[bull....]

rba just surprised with a 25 instead off expected 50. will rbnz surprise now ?

[Aaron]

That makes more sense, sorry didn't read it very well.

I guess that makes the last 12 months one for the books NZX50 down 16% (not including dividends) Gold down 8% (in USD)

RBA weaker than the RBNZ imo.

[bull....]

US markets having a nice continuation bounce today of support levels.
Wonder if the RBA surprise yesterday is playing a part too as risk really went on after the announcement.
looks like aus is going to see another big bounce up today at this stage.
potential terminal rate in nz had been pushed higher by traders in nz last few weeks in anticipation rbnz would have to go harder which was impacting some stocks nz but after yesterday RBA guess its all gone now.
be interesting what rbnz say today in there commentary
will we get a big move higher on nzx with a we nearly finished statement ?

[SailorRob]

US markets having a nice continuation bounce today of support levels.
Wonder if the RBA surprise yesterday is playing a part too as risk really went on after the announcement.
looks like aus is going to see another big bounce up today at this stage.
potential terminal rate in nz had been pushed higher by traders in nz last few weeks in anticipation rbnz would have to go harder which was impacting some stocks nz but after yesterday RBA guess its all gone now.
be interesting what rbnz say today in there commentary
will we get a big move higher on nzx with a we nearly finished statement ?

Do you mean 'discount rate'?

[bull....]

Do you mean 'discount rate'?

no its a terminal rate
i dont have time for an in depth conversation on this very involved topic as i have heaps of trades on at the moment for tday
to do with the cash rate level the rbnz will hike too
rbnz say hiking to 4% in there statements
market says nah we dont agree and they price in expectations of say 4.5 % that being the new implied termainal rate by the market.
these expectations set pricing fgor all sets of assets and also like i tell you the g in fcf forecasts

todays statement by rbnz will change traders expectations of implied terminal rate for ocr going forward and that provides the opportunity for profit trades as market priced higher than rbnz so if they act like rba yest there be a massive diff between traders and rbnz expectations

sailorrob - read this article from nick an interest rate strategist from bnz and your see how he refers to terminal rate in his talking

https://www.interest.co.nz/currencies/117880/equity-markets-rally-strongly-second-day-running-rba-hikes-rates-only-25bps

[Rawz]

The bear has been shot! Just need the RBNZ to put it down once and for all

[SailorRob]

no its a terminal rate
i dont have time for an in depth conversation on this very involved topic as i have heaps of trades on at the moment for tday
to do with the cash rate level the rbnz will hike too
rbnz say hiking to 4% in there statements
market says nah we dont agree and they price in expectations of say 4.5 % that being the new implied termainal rate by the market.
these expectations set pricing fgor all sets of assets and also like i tell you the g in fcf forecasts

todays statement by rbnz will change traders expectations of implied terminal rate for ocr going forward and that provides the opportunity for profit trades as market priced higher than rbnz so if they act like rba yest there be a massive diff between traders and rbnz expectations


'termainal rate'?? This is really a new one

Ok so you mean the Discount rate. What you have described is called the discount rate.

https://www.investopedia.com/terms/d/discountrate.asp#:~:text=The%20discount%20rate%20i s%20the,value%20of%20future%20cash%20flows.

Good luck with the heaps of trades, should be more manageable with 12 screens.

[bull....]

'termainal rate'?? This is really a new one

Ok so you mean the Discount rate. What you have described is called the discount rate.

https://www.investopedia.com/terms/d/discountrate.asp#:~:text=The%20discount%20rate%20i s%20the,value%20of%20future%20cash%20flows.

Good luck with the heaps of trades, should be more manageable with 12 screens.

ok terminal rate is the end point of where the cash rate hikes will end. thats the definition
in this enviroment it changes all the time thats why the market is jumping all over the place based on the expected terminal rate

[bull....]

massive fall in nz 10yr already this morning should flow to nz yield stocks ?

be interesting what happens on nz50 looked like a head and shoulder bottom on the hourrlies yest potentially

[alokdhir]

The bear has been shot! Just need the RBNZ to put it down once and for all

Its not healthy as most experts saying and I agree ...till we dont have a clear winner in Inflation fight claiming victory by central banks will be counter productive .

Very sure it will peter out when real data shows otherwise ....maybe data will support what RBA started ...then its lasting good stuff and pivotal moment of this Bear market ...anyways its almost 10 months old so if past history is correct then thats average life of bear market

Our RBNZ has been most consistent that our rates cycle mature , we have two more then wait and watch etc ...so he has already indicated not much further to go ...just fine tuning after two 50 bips ....its the market which is jumpy and keeps changing its views to let Bull make tons of money trading ...lol

Pain for people which RBA took notice of will be harder ahead even if rates dont go much higher ...as now mortgages at new and big higher rates will start to be refinanced ...so they will just keep them high for longer for them to work .

If u start anti biotics for any disease ....only first few doses can be double then need to come back to correct protocol unless u want to kill the patient ...all medicines take time to work ...already high rates will sort this trouble in next 9 months or so ...market will take into stride and look thru this period and start rerating it upwards soon or already started

S&P 500 3900 crossing will be first good signs that this can last

[alokdhir]

ok terminal rate is the end point of where the cash rate hikes will end. thats the definition
in this enviroment it changes all the time thats why the market is jumping all over the place based on the expected terminal rate

Now u got it right ...hopefully he will understand this simple definition and move on to higher level discussions ....lol :p

[alokdhir]

Action after 2 PM news ...Bull be ready mate

[daveypnz]

Before y'all get excited: https://twitter.com/LizAnnSonders/status/1577406629066248254

[bull....]

Action after 2 PM news ...Bull be ready mate

for sure , took my bets yesterday after the rba announcement although i have to admit there was only one bet on a nz stock for today rest were on oversea's stuff

[alokdhir]

for sure , took my bets yesterday after the rba announcement although i have to admit there was only one bet on a nz stock for today rest were on oversea's stuff

Good luck mate ...I am sure u dont need it but still wish u well ...:t_up:

[mike2020]

for sure , took my bets yesterday after the rba announcement although i have to admit there was only one bet on a nz stock for today rest were on oversea's stuff
Finally going big on OCA? Spill :)

[percy]

https://smallcaps.us14.list-manage.com/track/click?u=ac3a9fdb691a7372f8b04b033&id=96b17fff1d&e=6c1ad5cc63

[lawson]

Its not healthy as most experts saying and I agree ...till we dont have a clear winner in Inflation fight claiming victory by central banks will be counter productive .

Very sure it will peter out when real data shows otherwise ....maybe data will support what RBA started ...

"The ABS has just introduced monthly Consumer Price Index (CPI) indicator for Australia. The monthly CPI indicator will provide a timelier indication of inflation using the same data collected for use in the quarterly CPI."

The first was released on Septemeber 29 and it did show that Australian YoY inflation eased in August back to the June level of 6.8% from July's high. This is why the RBA decided to go lower.

However 100% of that fall was due to the price of petrol and the RBA has said they know inflation will still be rising. This leads to a lower aud as well.


However many are saying the RBA blinked and that central banks will have to blink - cue a return to talk of the "pivot".

https://www.reuters.com/markets/asia/australia-monthly-cpi-measure-slows-slightly-68-yy-august-2022-09-29/

[winner69]

Orr might chicken out today and go 25 bp instead of expected 50 bp

That would make life interesting

[Rawz]

https://smallcaps.us14.list-manage.com/track/click?u=ac3a9fdb691a7372f8b04b033&id=96b17fff1d&e=6c1ad5cc63

These hedge funds shorting stocks… I don’t think I will ever invest in a fund that shorts stocks.

[alokdhir]

Orr might chicken out today and go 25 bp instead of expected 50 bp

That would make life interesting

I dont think he will chicken out ...he will go 50bp as expected but he can restate his August line ...that in RBNZ view 4% is the " Terminal Rate " ( Bulls favourite term ) ....that will be enough to fire up our markets too ...as market at present is priced on 4.5% Peak by mid 2023 ....If its 4 % then at least 5% stocks rally in order ...:D

[percy]

These hedge funds shorting stocks… I don’t think I will ever invest in a fund that shorts stocks.

I agree.
Spend all my time looking for good small companies with great growth prospects.
Only sell when they do not do as they say they would.

[winner69]

I dont think he will chicken out ...he will go 50bp as expected but he can restate his August line ...that in RBNZ view 4% is the " Terminal Rate " ( Bulls favourite term ) ....that will be enough to fire up our markets too ...as market at present is priced on 4.5% Peak by mid 2023 ....If its 4 % then at least 5% stocks rally in order ...:D

Jeez - the Committe considered they go 75bps .... so the vibes I got he was going to chicken out were good - just I didn't get the ful story

[bull....]

I dont think he will chicken out ...he will go 50bp as expected but he can restate his August line ...that in RBNZ view 4% is the " Terminal Rate " ( Bulls favourite term ) ....that will be enough to fire up our markets too ...as market at present is priced on 4.5% Peak by mid 2023 ....If its 4 % then at least 5% stocks rally in order ...:D

market was right eh pricing in higher terminal. his statement was quite hawkish

[alokdhir]

market was right eh pricing in higher terminal. his statement was quite hawkish

He did the sensible thing ...scaring the market into pricing higher peak rate so it starts taking effect sooner then when he actually needs to reach that rate

RBA did a very shoddy job of playing to the galleries ....surely it will come to bite them latter

RBNZ is on track and doing things pretty smoothly and consistently ....I am quite satisfied the way things are going ...NZ markets will rejoice sooner then others in the long run

[bull....]

He did the sensible thing ...scaring the market into pricing higher peak rate so it starts taking effect sooner then when he actually needs to reach that rate

RBA did a very shoddy job of playing to the galleries ....surely it will come to bite them latter

RBNZ is on track and doing things pretty smoothly and consistently ....I am quite satisfied the way things are going ...NZ markets will rejoice sooner then others in the long run

they didnt mention anything this statement about terminal rate staying the same or increasing but i take it from there other comments such as

we discussed 75
lower kiwi if sustained may pose problems
retail spending still too strong
labour market too strong

so in summary that they are now undecided on terminal rate and it will be data dependant going forward and upside is possible at this point in time ( what the market thinks )

and now we got oil prices being pushed higher again by opec

[percy]

https://sharecafe.us14.list-manage.com/track/click?u=c2c1464dc7900c4f66c3a574d&id=d1966a91b6&e=338561e893

[winner69]

Suppose it’ll only be a matter of time before Orr listens to increasing media coverage of the pain he’s causing in getting inflation under control.

Raising rates like he is seen as unnecessary …..what’s to gain from fighting a phantom evil blah blah ……he’s got to get out into the real world to see the pain he’s causing to normal kiwis.

More amd more media comments like this …..I reckon Orr will succumb to the increasing feelings of the populus

[Habits]

"We discussed 75"

When I go to the doctor (thankfully almost never) he/she does not prescribe say 25mg of something and then the next day double the dose to 50mg and so on. The doc gives the meds/antibiotics the required time to start working, for the fever to come down. Increase the dose too much and the patient will die, which will of course get rid of the fever. :D

[Aaron]

Suppose it’ll only be a matter of time before Orr listens to increasing media coverage of the pain he’s causing in getting inflation under control.

Raising rates like he is seen as unnecessary …..what’s to gain from fighting a phantom evil blah blah ……he’s got to get out into the real world to see the pain he’s causing to normal kiwis.

More amd more media comments like this …..I reckon Orr will succumb to the increasing feelings of the populus

I thought the pain was due to a cost of living crisis brought on by inflation. The pain is in asset prices so you would hope that Adrian is at least consistent and continues if CPI inflation stays high even if asset prices drop.

A lot of crap about something "breaking" in the media, breaking = correction so we can have a return on capital and valuations get back to something that makes sense. The interest rates were historically low and the money printing pretty excessive from what I understand. If FOMO caused you to take on too much debt, tough s*it, unless you are a UK pension fund manager or wall Street investment banker.

Bill Bonner reckons
‘Disruptive monetary policy’? That’s what the Bloomberg team calls the Fed’s attempt to get back to normal. The elite were having such a good time pumping fake money and credit into the system. And then…someone comes along to ‘disrupt’ the party. They don’t like it.

[workingdad]

Suppose it’ll only be a matter of time before Orr listens to increasing media coverage of the pain he’s causing in getting inflation under control.

Raising rates like he is seen as unnecessary …..what’s to gain from fighting a phantom evil blah blah ……he’s got to get out into the real world to see the pain he’s causing to normal kiwis.

More amd more media comments like this …..I reckon Orr will succumb to the increasing feelings of the populus

Whilst I understand increasing interest rates puts pressure on mortgage holders I don’t agree entirely with your post. For so many years so many home owners have made ‘bank’ and spent plenty on pretty much everything and anything. I watched so many instead of knocking down their debt levels take on more and more with new cars and boats and various other extravagances beyond their normal means with a rampant property market and equity making them asset rich. In my day it seemed the norm was paying down debt which lately seems the minority.

New home owners I feel for getting caught out but banks would have stress tested to a higher OCR than present. Inflation is hurting savers immensely not to mention anyone needing to make larger purchases.

Too much money floating around for a long time, OCR raises takes some out of the system, govt spending needs to be pulled back but the pain is across the board and many of us have lived through easing and tightening cycles. If we don’t get inflation under control the consequences are far greater.

[cyclist]

Workingdad. Nice to see you posting.

I agree with all of that. Add in that inflation hits the poorest hardest, which rebounds on us all.

But you do know that winner is the ultimate devils advocate don't you?

[workingdad]

Workingdad. Nice to see you posting.

I agree with all of that. Add in that inflation hits the poorest hardest, which rebounds on us all.

But you do know that winner is the ultimate devils advocate don't you?

Thank you..... very good point, re-reading it and yes, I look to have misinterpreted that one which makes sense, my thoughts on W69 are as a poster I find quite admirable.

[winner69]

Former Fed Governer Mishkin projects a 5% Fed rate. Said "I think the Fed should not pivot and I don't think they will pivot. There are some elements of the market that don't believe that, and I think the markets are making a mistake."

As an aside the Fed has never pivoted when rates are below Core PCE + .5 and they are a long way away from that currently

[bull....]

Former Fed Governer Mishkin projects a 5% Fed rate. Said "I think the Fed should not pivot and I don't think they will pivot. There are some elements of the market that don't believe that, and I think the markets are making a mistake."

As an aside the Fed has never pivoted when rates are below Core PCE + .5 and they are a long way away from that currently

and they have also said real rates need to be positive
guess that's why utilities and real estate are getting pummelled recently. utilities down nearly 5% again last 2 days think the defensive trade is well and truely over as they succumb to the bear

as an aside mondelez ceo was saying there food cost will go up substantially next yr due to inflation pressures

[bull....]

see the opec announcement the other day has big implications for NZ inflation fight and interest rates.
govt must realize too as minister has backflipped in a week on this opec announcement

Transport Minister Michael Wood doesn't rule out fuel tax cut extension after last week saying it will end in January
https://www.newshub.co.nz/home/politics/2022/10/transport-minister-michael-wood-doesn-t-rule-out-fuel-tax-cut-extension-after-last-week-saying-it-will-end-in-january.html

[Ricky-bobby]

Get drilling NZ!!

[SailorRob]

Now u got it right ...hopefully he will understand this simple definition and move on to higher level discussions ....lol :p


Thankyou Alokdhir for being the arbitrator of truth. Fortunately a discounted cash flow calculation is a mathematical construct, so we don't need you to arbitrate the truth for now.

Thanks Bull for finally providing a definition of the 'Terminal rate' being 'terminal rate is the end point of where the cash rate hikes will end. thats the definition'

So for both of you... Nobody uses this 'terminal rate' in a discounted cash flow calculation, as using the rate of overnight money to discount a stream of cash flows well into the future would indeed be stupid.

Even more stupid would be using the markets perception of where the overnight cash rate will 'peak'. Or Bulls 'terminal rate'

Instead we use the 'discount rate' which will be different to each investor and is one of the variables that makes a market. Buffett doesn't to DCF's in the traditional sense but he certainly thinks in these terms and he uses the long bond as his discount rate, which is the 30 year rate.

We can also use an investors 'required rate' or what they want to achieve over the long term, again unrelated to the overnight rate.

These things are what generates a yield curve and for those watching, the overnight money rate getting jacked up is having little effect on the long rate thus inverting the curve.

Another way to think about it is watching the oil equity market which is pricing off the long end of the futures curve, as it would be mind bogglingly stupid to buy a long stream of oil based income based on the spot price. You need to be thinking what you will earn next year and in 5 years and discounting that.

In summary, the cash rate or the perception of where it will peak is not used by anyone in a DCF and this is what Bull defined as the 'terminal rate' he uses and what he thinks the market uses.

It is VERY important we have market participants this naïve trying to trade off 12 screens with others such as Alokdhir fawning as this is another source of an edge to long term fundamental investors. Their losses are our returns.

Please be aware of following people like this and do your own research.

[ynot]

Get drilling NZ!!
That would be the obvious solution but unfortunately we do are environmentally aware so we will import coal/petrol.

[bull....]

Thankyou Alokdhir for being the arbitrator of truth. Fortunately a discounted cash flow calculation is a mathematical construct, so we don't need you to arbitrate the truth for now.

Thanks Bull for finally providing a definition of the 'Terminal rate' being 'terminal rate is the end point of where the cash rate hikes will end. thats the definition'

So for both of you... Nobody uses this 'terminal rate' in a discounted cash flow calculation, as using the rate of overnight money to discount a stream of cash flows well into the future would indeed be stupid.

Even more stupid would be using the markets perception of where the overnight cash rate will 'peak'. Or Bulls 'terminal rate'

Instead we use the 'discount rate' which will be different to each investor and is one of the variables that makes a market. Buffett doesn't to DCF's in the traditional sense but he certainly thinks in these terms and he uses the long bond as his discount rate, which is the 30 year rate.

We can also use an investors 'required rate' or what they want to achieve over the long term, again unrelated to the overnight rate.

These things are what generates a yield curve and for those watching, the overnight money rate getting jacked up is having little effect on the long rate thus inverting the curve.

Another way to think about it is watching the oil equity market which is pricing off the long end of the futures curve, as it would be mind bogglingly stupid to buy a long stream of oil based income based on the spot price. You need to be thinking what you will earn next year and in 5 years and discounting that.

In summary, the cash rate or the perception of where it will peak is not used by anyone in a DCF and this is what Bull defined as the 'terminal rate' he uses and what he thinks the market uses.

It is VERY important we have market participants this naïve trying to trade off 12 screens with others such as Alokdhir fawning as this is another source of an edge to long term fundamental investors. Their losses are our returns.

Please be aware of following people like this and do your own research.

your funny :)

still dont get it eh about terminal rate ... guess that's why you got one screen
you then contradict yourself by saying every investor uses different rate's in there dcf after saying nobody uses a terminal rate.
hello we know discount rate is used in dcf but its about figuring out the terminal rate so you can plug that in your dcf

[SailorRob]

your funny :)

still dont get it eh about terminal rate ... guess that's why you got one screen
you then contradict yourself by saying every investor uses different rate's in there dcf after saying nobody uses a terminal rate.
hello we know discount rate is used in dcf but its about figuring out the terminal rate so you can plug that in your dcf


*You're......

[SailorRob]

your funny :)

still dont get it eh about terminal rate ... guess that's why you got one screen
you then contradict yourself by saying every investor uses different rate's in there dcf after saying nobody uses a terminal rate.
hello we know discount rate is used in dcf but its about figuring out the terminal rate so you can plug that in your dcf


*Their.....

[Rawz]

I thought the discount rate should = your hurdle rate. So i set mine to 10% i.e. i want returns over 10%
Then the terminal rate is the fair P/E multiple the stock should be trading at. So like FPH you could plug in 30 and HLG you could use 10?

I actually stopped using DCFs when i figured out i couldnt predict the future

[JohnnyTheHorse]

Get a life mate. And maybe spend this weekend with your loved ones or doing hobbies, rather than arguing with people on the internet. We don't need a repeat of last weekend.

[SailorRob]

your funny :)

still dont get it eh about terminal rate ... guess that's why you got one screen
you then contradict yourself by saying every investor uses different rate's in there dcf after saying nobody uses a terminal rate.
hello we know discount rate is used in dcf but its about figuring out the terminal rate so you can plug that in your dcf


So Bull, if I say that everyone runs at a different pace but nobody runs at 75kph, is this a contradiction? If so, how?

If I say everyone uses different rates but nobody uses the overnight rate or their prediction of where it will peak, is this a contradiction? If so how?

[SailorRob]

Get a life mate. And maybe spend this weekend with your loved ones or doing hobbies, rather than arguing with people on the internet. We don't need a repeat of last weekend.


Johnny, this is my life. Arguing with idiots on the internet is all I have.

[SailorRob]

I thought the discount rate should = your hurdle rate. So i set mine to 10% i.e. i want returns over 10%
Then the terminal rate is the fair P/E multiple the stock should be trading at. So like FPH you could plug in 30 and HLG you could use 10?

I actually stopped using DCFs when i figured out i couldnt predict the future


Yes this is one way of doing it, the other is opportunity cost of risk free return for long money.

Using your hurdle rate will give you the investment basis of what you need to pay to obtain your desired returns.

This is hot of the press and an incredible explanation of what actually drives returns over the long term.

https://www.morganstanley.com/im/publication/insights/articles/article_returnoninvestedcapital.pdf?1665064386283

[SailorRob]

'A company creates value when the present value of the cash flowsfrom its investments are greater than the cost of the investments.In other words, one dollar invested in the business becomes worthmore than one dollar in the market. Discounting future cash flowsmakes sure the investment is attractive relative to the capital’sopportunity cost, the return on the next best alternative.

Here is one way to think about it. A company invests $10,000 andthe opportunity cost is 8 percent. In the first scenario, theinvestment generates cash flow of $500 per year into perpetuity,which equals a value of $6,250 ($500/.08). This fails the one dollartest and illustrates why positive earnings do not always equate tovalue creation.

In the second scenario the business earns $800 in cash flow peryear, making the investment worth exactly the cost of $10,000($800/.08). This business is value neutral. Note that growth addsno value in this case. Growth is like the speed setting on a treadmill.You can turn it up or down but you are going nowhere.

In the final scenario, the firm produces cash flow of $1,100. Thispasses the one dollar test with flying colors, as the $10,000 is worth$13,750 ($1,100/.08). Growth is good. The faster the company cangrow while sustaining these returns, the more value it creates'.

[bull....]

Johnny, this is my life. Arguing with idiots on the internet is all I have.

well your have to argue with yourself , cause ive made my money for the week timing my entries and exits perfectly this week and now im going to sit in cash until i do the same next week . off too enjoy my weekend in the deck chair on the super powerboat

[winner69]

With those job numbers in US Fed won’t be pivoting for a while

Possibly means Orr won’t be pivoting for a while as well …..we’ll possibly see more media about Orr causing unnecessary stress on NZ households and he should stop being so unkind

[Panda-NZ-]

Possibly means Orr won’t be pivoting for a while as well …..we’ll possibly see more media about Orr causing unnecessary stress on NZ households and he should stop being so unkind

Orr would need to keep the dollar up though.. or even more inflation.

[winner69]

Max Rashbrooke: Sacrificing 50,000 workers on the altar of inflation is madness

https://www.stuff.co.nz/opinion/130102321/max-rashbrooke-sacrificing-50000-workers-on-the-altar-of-inflation-is-madness

[Aaron]

Max Rashbrooke: Sacrificing 50,000 workers on the altar of inflation is madness

https://www.stuff.co.nz/opinion/130102321/max-rashbrooke-sacrificing-50000-workers-on-the-altar-of-inflation-is-madness

Max Rashbrooke was also writing about wealth inequality when the RBNZ was driving up asset prices. I am on the same page with him on a lot of things but moaning about everything is not the same as coming up with solutions or alternatives.

[SailorRob]

well your have to argue with yourself , cause ive made my money for the week timing my entries and exits perfectly this week and now im going to sit in cash until i do the same next week . off too enjoy my weekend in the deck chair on the super powerboat

Good on you. You deserve it.

One thing that I don't understand (there are many) is that you seem to be very busy with your job. Would it not make sense to trade full time and then you wouldn't need to worry about just enjoying weekends?

Even poor Johnny the old horse is going on about weekends. Weekends... why bother? Why work? Why just enjoy hobbies in the weekend Johnny? Why not every day?

Even though I have well over 2 decades left before 'retirement' I have just quit my very well paid job, I finish in 2 weeks, I'll be living off investing income/returns. Then every day is a weekend. I'll be Circumnavigating NZ under sail to begin with. Given your ability to profitably trade any market any time, I don't see the need for you to have another job and be all busy. You could even redo 3rd form English or something.

[Bobdn]

I'm 5 years into super early retirement..I'd never go back to work, I love retirement.

However, one thing I do miss is fresh cash from my job. I don't "need" it as such but it certainly made bear markets more fun. I'd love to be putting cash to work right now.

[nztx]

Max Rashbrooke: Sacrificing 50,000 workers on the altar of inflation is madness

https://www.stuff.co.nz/opinion/130102321/max-rashbrooke-sacrificing-50000-workers-on-the-altar-of-inflation-is-madness


How about the 50,000 plus extra civil servants that Govt's inflationary employment policies
have added in the Country's Civil Service, which may have a finite gone-by term added ? ;)

[ynot]

I'm 5 years into super early retirement..I'd never go back to work, I love retirement.

However, one thing I do miss is fresh cash from my job. I don't "need" it as such but it certainly made bear markets more fun. I'd love to be putting cash to work right now.


Out of interest, If you had a spare fifty K, where would you put it. (personally I don't think the bottom is in just yet)

[SailorRob]

Out of interest, If you had a spare fifty K, where would you put it. (personally I don't think the bottom is in just yet)


If you don't think the bottom is in then the easiest money in the world is going short.

Nobody knows were the bottom is, or if it's in but to say that you personally think we go lower - by definition means that you think that you have an edge over the market. So you know more than the combined aggregate of all other market participants in the multi trillion dollar capital markets, which is what is setting the market at it's current price.

The easiest arbitrage in the world, if people KNOW the market goes lower is to sell and buy back lower. If everyone thought this then the market would reprice immediately.

If you even can say that there is a 51% chance we go lower and a 49% that we don't and you can have this tiny ability of being ever so slightly more right than wrong consistently, then you will become very wealthy pretty quickly.

The best thing to do is free yourself from this notion that you know slightly more than the combined wisdom of the market in terms of it's overall direction and concentrate on finding opportunities that you think you can get a sufficient return from at current prices - or figuring out a price at which you could.

In this way you will currently find many opportunities that will produce 10-15% CAGR BUT volatile returns going forward from here for many years and you will pounce, you will be happier if the things you bought go lower after you buy and you will over time make a LOT of money.

This is not to say you should be fully invested and I think holding cash here is of course a market timing call as there are opportunities galore to do very well, but you can look at it as more something that allows you to behave appropriately rather than market timing call.

At the beginning of the year - rather than pretend we saw this coming or thinking we go lower, you could have said there were not sufficient opportunities to deploy large sums of capital (there always are unless you're running billions) and thus waited for better opportunities.

[SailorRob]

I'm 5 years into super early retirement..I'd never go back to work, I love retirement.

However, one thing I do miss is fresh cash from my job. I don't "need" it as such but it certainly made bear markets more fun. I'd love to be putting cash to work right now.


Yeah, great to hear. One way around this is if you have access to non recourse debt, you can borrow at negative real rates and buy productive assets, something that will work out exceptionally well over the medium term.

Taking on 10% leverage now would be a good way of putting more to work. After all it is considered totally normal and even strongly encouraged to borrow 900% of your net worth to buy non productive assets (house) in this country.

So levering up 10% against a mortgage free house right now would make all the sense in the world to me in your situation.

[SailorRob]

Out of interest, If you had a spare fifty K, where would you put it. (personally I don't think the bottom is in just yet)

Now if the market bottom is indeed not in and you think 'see, told you so, my gut feeling was correct'

Then if you can keep doing this - or indeed only do it now and then, or even only once more - you can make more money than you can possibly imagine.

[Baa_Baa]

I'm 5 years into super early retirement..I'd never go back to work, I love retirement.

However, one thing I do miss is fresh cash from my job. I don't "need" it as such but it certainly made bear markets more fun. I'd love to be putting cash to work right now.

Have you considered margin lending; borrowing on your equities to acquire a larger holding? ASB Securities current lending rate is 6.95%, for example.

[SailorRob]

Have you considered margin lending; borrowing on your equities to acquire a larger holding? ASB Securities current lending rate is 6.95%, for example.


Interactive Brokers are the best for this, lower rates than you will find anywhere.

Currently 4% and was MUCH lower before the front end started lifting.

Way easier than the ASB system too.

[ynot]

If you don't think the bottom is in then the easiest money in the world is going short.

Nobody knows were the bottom is, or if it's in but to say that you personally think we go lower - by definition means that you think that you have an edge over the market. So you know more than the combined aggregate of all other market participants in the multi trillion dollar capital markets, which is what is setting the market at it's current price.

The easiest arbitrage in the world, if people KNOW the market goes lower is to sell and buy back lower. If everyone thought this then the market would reprice immediately.

If you even can say that there is a 51% chance we go lower and a 49% that we don't and you can have this tiny ability of being ever so slightly more right than wrong consistently, then you will become very wealthy pretty quickly.

The best thing to do is free yourself from this notion that you know slightly more than the combined wisdom of the market in terms of it's overall direction and concentrate on finding opportunities that you think you can get a sufficient return from at current prices - or figuring out a price at which you could.

In this way you will currently find many opportunities that will produce 10-15% CAGR BUT volatile returns going forward from here for many years and you will pounce, you will be happier if the things you bought go lower after you buy and you will over time make a LOT of money.

This is not to say you should be fully invested and I think holding cash here is of course a market timing call as there are opportunities galore to do very well, but you can look at it as more something that allows you to behave appropriately rather than market timing call.

At the beginning of the year - rather than pretend we saw this coming or thinking we go lower, you could have said there were not sufficient opportunities to deploy large sums of capital (there always are unless you're running billions) and thus waited for better opportunities.

I take your point, although I only "think the bottom is not in" I do not know that for sure obviously, and I would not risk going short at this point.

[SailorRob]

I take your point, although I only "think the bottom is not in" I do not know that for sure obviously, and I would not risk going short at this point.


Thanks, the point was also meant to demonstrate that this thinking can also be detrimental though.

How often have you 'thought' something like this and been correct. We should all be recording these musings and see what track record we have, if it's not good then any time spent on these thoughts is a total waste of time. If it is good then you're going to be a major global macro investor.

Focus on individual companies and your estimation of their net future cash flows and then judge what you can purchase them for now and if that is a good deal then buy. Sit on your arse and count the cash.

[SailorRob]

No prizes for guessing who;

'We have no notion on that andwe really don’t think about it. Because we don’t know. Our job is to focus on things we canknow and that make a difference. And if something can’t make a difference or we can’t know it,then we write that one off.”

[Bobdn]

@baabaa

No, as much as I would love to. I use to borrow heavily to invest when I was working. But now no borrowing is one of the rules; along with staying within my 4 per cent plus inflation spending cap; and staying diversified in passive funds (I do allow myself a little tilt of 5 per cent of my financial assets but even that is in ETFs eg currently XLE/OIH).

If I don't break these rules, I should still have money in 35 plus years. And if the pension is still around when I turn 65, well that would be a terrific bonus. I use the Monte Carlo simulator at the Portfolio Visualizer website. Its owned by Blackrock now..it's free and good fun.

I run the numbers pretty regularly. I'm only aiming for a 85 per cent success rate, although I've been hovering around 90 per cent since retirement. If it drops below 85 per cent I'll cut back on expenditure by not adjusting for inflation for the following year. I'll make these sort of adjustments until I get back on track.

85 per cent sounds risky. Its fine for me as long as I'm prepared to make adjustments. We're in the heart of a bear market and above the 85 per cent red line and I'm in my 5th month of my current overseas trip so no need to rush home just yet. I do live cheaply however and my hotels are always budget with breakfast included! They're sometime just the next step up from hostels:).

[SailorRob]

@baabaa

No, as much as I would love to. I use to borrow heavily to invest when I was working. But now no borrowing is one of the rules; along with staying within my 4 per cent plus inflation spending cap; and staying diversified in passive funds (I do allow myself a little tilt of 5 per cent of my financial assets but even that is in ETFs eg currently XLE/OIH).

If I don't break these rules, I should still have money in 35 plus years. And if the pension is still around when I turn 65, well that would be a terrific bonus. I use the Monte Carlo simulator at the Portfolio Visualizer website. Its owned by Blackrock now..it's free and good fun.

I run the numbers pretty regularly. I'm only aiming for a 85 per cent success rate, although I've been hovering around 90 per cent since retirement. If it drops below 85 per cent I'll cut back on expenditure by not adjusting for inflation for the following year. I'll make these sort of adjustments until I get back on track.

85 per cent sounds risky. Its fine for me as long as I'm prepared to make adjustments. We're in the heart of a bull market and above the 85 per cent red line and I'm in my 5th month of my current overseas trip so no need to rush home just yet. I do live cheaply however and my hotels are always budget with breakfast included! They're sometime just the next step up from hostels:).


This one is great too, way more historical data runs.

https://firecalc.com/

[Bobdn]

Yes for sure, I've spent many hours (days!) on Firecalc.

Portfolio Visualizer has more asset input options (eg Asia Pacific shares) so I find it easier to get closer to my portfolio.

But both report: no need to go back to work!

One correction: I said in my longer post we're in the "heart of a bull market". Wouldn't that be great. Edited it to read "bear" market. Two bear markets since I've retired - so sequence of return risk feels real at the moment. So far so good but "don't get cocky kid".

[alokdhir]

https://www.nzherald.co.nz/business/liam-dann-time-to-hit-pause-on-interest-rate-hikes/7GJINM2LWOJZ5DNWKTOI7A53KA/

Debate has started and rightly so ....Bringing rates up so fast without pause to see their effects is same as bringing them down too fast eg in Covid times without realising their medium term effect ...NZ OCR of 0.25% was a ER type act ...though at that time it did look like a very big emergency ....Now 75bips move after move of FED will get us into bigger trouble then being anticipated ...why they need to see something break then panic in financial markets to signal a pivot ...maybe they let market's decide the difficult part ...like covid panic decided for FED what to do now Inflation panic set them in other direction ...just averted UK collapse would have woken them up but BoE did the smaller task ....maybe FED again waiting for a Hobson's choice

Last August data of average mortgage rate of just 3.68% from RBNZ shows the lag it needs to actually hit people ...at present its just scare tactics which are not yet working on Covid scared and distressed people ....but in next 3-6 months it will start showing its ugly effect when actually extra money will start disappearing from salary accounts as newly reset mortgages payments

The way all Central Banks are going is sure way to break something soon ...especially FED as that matters most

I reckon total wealth erosion effect of these higher rates worldwide shud match if not exceed combined money printing during covid times ....

Trying to match demand supply mismatch by aggressive demand destruction only will lead to bigger problems ....like public unrest etc ahead

[bull....]

@baabaa

No, as much as I would love to. I use to borrow heavily to invest when I was working. But now no borrowing is one of the rules; along with staying within my 4 per cent plus inflation spending cap; and staying diversified in passive funds (I do allow myself a little tilt of 5 per cent of my financial assets but even that is in ETFs eg currently XLE/OIH).

If I don't break these rules, I should still have money in 35 plus years. And if the pension is still around when I turn 65, well that would be a terrific bonus. I use the Monte Carlo simulator at the Portfolio Visualizer website. Its owned by Blackrock now..it's free and good fun.

I run the numbers pretty regularly. I'm only aiming for a 85 per cent success rate, although I've been hovering around 90 per cent since retirement. If it drops below 85 per cent I'll cut back on expenditure by not adjusting for inflation for the following year. I'll make these sort of adjustments until I get back on track.

85 per cent sounds risky. Its fine for me as long as I'm prepared to make adjustments. We're in the heart of a bear market and above the 85 per cent red line and I'm in my 5th month of my current overseas trip so no need to rush home just yet. I do live cheaply however and my hotels are always budget with breakfast included! They're sometime just the next step up from hostels:).

very wise not using leverage in retirement

[bull....]

Interactive Brokers are the best for this, lower rates than you will find anywhere.

Currently 4% and was MUCH lower before the front end started lifting.

Way easier than the ASB system too.

interactive brokers is setup as a traders platform. low fees for trading , if you dont trade you pay them.
I dont understand how this platform would interest you or anyone that is a long term investor.
i think you should stop and think before posting.

[bull....]

Good on you. You deserve it.

One thing that I don't understand (there are many) is that you seem to be very busy with your job. Would it not make sense to trade full time and then you wouldn't need to worry about just enjoying weekends?

Even poor Johnny the old horse is going on about weekends. Weekends... why bother? Why work? Why just enjoy hobbies in the weekend Johnny? Why not every day?

Even though I have well over 2 decades left before 'retirement' I have just quit my very well paid job, I finish in 2 weeks, I'll be living off investing income/returns. Then every day is a weekend. I'll be Circumnavigating NZ under sail to begin with. Given your ability to profitably trade any market any time, I don't see the need for you to have another job and be all busy. You could even redo 3rd form English or something.

cant speak for johnny but if you asked why warren buffett still works then your have your answer.
i thought you got laid off ?
anyway hope your retirement goes well , let us know in 10yrs if the stocks you chose are still paying for your retirement

[SailorRob]

interactive brokers is setup as a traders platform. low fees for trading , if you dont trade you pay them.
I dont understand how this platform would interest you or anyone that is a long term investor.
i think you should stop and think before posting.


For anyone interested, rather than listen to Bull*%^$, here is a good overview of Interactive Brokers.

It is by far the best platform for long term international investors and you can convert $180,000 NZD to USD at the real spot rate for a fee of $2 USD.

https://www.moneyhub.co.nz/interactive-brokers-review.html

[SailorRob]

cant speak for johnny but if you asked why warren buffett still works then your have your answer.
i thought you got laid off ?
anyway hope your retirement goes well , let us know in 10yrs if the stocks you chose are still paying for your retirement


True enough, if your work is your life then there is that.

Yes was made Redundant in June and paid out, started back with the same company the next day.

There are other factors which come into it, how much capital do you have now and how much do you need to spend. Depending on those factors, you could be as bad an 'investor' as you are and still be ok but you'd need an awful lot of capital to begin with incinerating it like that.

[Gerald]

interactive brokers is setup as a traders platform. low fees for trading , if you dont trade you pay them.
I dont understand how this platform would interest you or anyone that is a long term investor.
i think you should stop and think before posting.

I think they removed the monthly inactivity fee, so compared to other platforms it's actually not that bad?

[SailorRob]

I think they removed the monthly inactivity fee, so compared to other platforms it's actually not that bad?

It's better than any of the others, particularly if accessing global markets. When you factor in currency conversions there is nothing to touch IB. The trading fees are extremely competitive as well. As usual, no surprises Bull* hasn't a clue what he's on about, 12 screens and all.

Hatch and Sharsies etc are ok for school kids and casual retail which is what they are designed for but when you're talking serious capital you need to consider the actual custodianship of your shares and how any cash balances you have are held.

[thegreatestben]

@SailorRob, out of interest what do you consider serious capital? Genuine question.

[Bobdn]

I used Hatch. Didn't realise Interactive Brokers had such good currency conversion rates.

Hatch does do my tax, because I'm over the 50k threshold, for just $50. And I reinvest my dividends once year for a $3 USD transaction fee. My dividends are all in USD of course. No new money so leaving everything where it. I'm very happy with Hatch. BTW, Dividends go into VT (Vanguards world index). You'll struggle to find a more boring investor than me. I'm boring and so are my investments.

Hatch; Superlife; Kernel; Devon and Simplicity. That's who has my money. I'm ultra paranoid about everything and everyone so I spread it around.

[SailorRob]

@SailorRob, out of interest what do you consider serious capital? Genuine question.


In the context of what I personally would be bothered about having exposed to Hatch or the like where murky foriegn banks may be subjecting your shares to rehypothecation... I'd be fine with a few tens of thousands possibly 200k type of thing but not a million.

In terms of 'serious capital' nowadays in general, it seems like most everyone is a millionaire (almost always from just having owned property) and I'd guess it's getting on for 2 million that starts seperating people out from the norm and I think in all context 5 million is now serious capital in a general sense in NZ.

[bull....]

see nz 10yr has opened back at recent high's this morning around 4.28. with US utilities / real estate getting particularly crushed last week in the US be interesting how nz market fairs this week with its defensive nature

[alokdhir]

see nz 10yr has opened back at recent high's this morning around 4.28. with US utilities / real estate getting particularly crushed last week in the US be interesting how nz market fairs this week with its defensive nature

What do u make from divergence of NZ 10Y highs vs US 10Y highs ...while US10Y made substantial new highs while NZ 10Y is just around June high levels ...IMHO market thinks NZ rates dont have much upside while US ones do ...That shud make NZ market more resilient in times ahead ?

[bull....]

What do u make from divergence of NZ 10Y highs vs US 10Y highs ...while US10Y made substantial new highs while NZ 10Y is just around June high levels ...IMHO market thinks NZ rates dont have much upside while US ones do ...That shud make NZ market more resilient in times ahead ?

nothing , they all going higher full stop.

[bull....]

who thinks black monday event would be russia dropping a mini nuke in ukraine ?

[alokdhir]

who thinks black monday event would be russia dropping a mini nuke in ukraine ?

There are so many bad things which can happen which are beyond our control and beyond the scope of planning ....If u are short then thinking of such events can be wishful thinking too ....like people long thinking FED will pivot in this week ....

[bull....]

There are so many bad things which can happen which are beyond our control and beyond the scope of planning ....If u are short then thinking of such events can be wishful thinking too ....like people long thinking FED will pivot in this week ....

too true.
as for the fed pivot thats why bonds have to go higher in my opinion cause everyone was thinking inflation was temporary and the fed going to pivot. now people are slowly coming to the realisation that neithier of these are going to happen anytime this yr under current situation
bonds must go up now to compensate for loss of future cash flows due to sticky inflation and equity pe must come down at same time due to lower earnings ahead due to sticky inflation.
lose / lose situation for all the 60/40 type portfolio's
thats why the best bet so far this yr has been parked in US dollar and if you listened to powell correctly he referenced volker so many times this yr and then go look at volker period then you will see US dollar went to the moon
safe haven and earning some interest at same time. if you convert back to nz dollars or that matter plenty of currencies at some time you have done very well this yr

[winner69]

The Fed has never pivoted when rates are below Core PCE + .5 and they are a long way away from that currently

So talk of this pivot thing is very premature

But Orr culd bow to public/media pressure to be not so evil towards NZ households - apparently today he's visiting a food bank today after talking to some budget advisors to see the pain he's caused

[alokdhir]

too true.
as for the fed pivot thats why bonds have to go higher in my opinion cause everyone was thinking inflation was temporary and the fed going to pivot. now people are slowly coming to the realisation that neithier of these are going to happen anytime this yr under current situation
bonds must go up now to compensate for loss of future cash flows due to sticky inflation and equity pe must come down at same time due to lower earnings ahead due to sticky inflation.
lose / lose situation for all the 60/40 type portfolio's
thats why the best bet so far this yr has been parked in US dollar and if you listened to powell correctly he referenced volker so many times this yr and then go look at volker period then you will see US dollar went to the moon
safe haven and earning some interest at same time. if you convert back to nz dollars or that matter plenty of currencies at some time you have done very well this yr

U keep missing the point mate ...I was comparing your wishful thinking of UKE being nuked with other people 's thinking of FED pivoting next week ...which meant both almost have very low probability ....but both can happen together ....if nuked then FED will pivot immediately ....

If u had read my previous post about debates worldwide if this pain being caused by Central Banks worthwhile ....then U will know FED acts when its a Hobson's choice ...they dont like to take the blame for their decisions ...they do what they do when it appears to all that thats the only way out

So for FED to pivot out this rate hikes path ...they most likely will need a Black Swan event ....which can be collapse of some big currency / bank / country or Nukes etc ...it will surely not be they saw the end of inflation ..imho ...time has shown before ...will see again

[bull....]

U keep missing the point mate ...I was comparing your wishful thinking of UKE being nuked with other people 's thinking of FED pivoting next week ...which meant both almost have very low probability ....but both can happen together ....if nuked then FED will pivot immediately ....

If u had read my previous post about debates worldwide if this pain being caused by Central Banks worthwhile ....then U will know FED acts when its a Hobson's choice ...they dont like to take the blame for their decisions ...they do what they do when it appears to all that thats the only way out

So for FED to pivot out this rate hikes path ...they most likely will need a Black Swan event ....which can be collapse of some big currency / bank / country or Nukes etc ...it will surely not be they saw the end of inflation ..imho ...time has shown before ...will see again

your not listening to the fed , they say they not pivoting even if something breaks. even larry summers was out end last week saying he agree's with fed and if something breaks so be it but fed should stick to plan

[alokdhir]

your not listening to the fed , they say they not pivoting even if something breaks. even larry summers was out end last week saying he agree's with fed and if something breaks so be it but fed should stick to plan

U dont seem so gullible as u stating here ...lol ....Will see what will happen when it happens ...then will bring this topic out ...:p

[JohnnyTheHorse]

The whole point is to break something. It's the only way to control inflation at this point.

[causecelebre]

who thinks black monday event would be russia dropping a mini nuke in ukraine ?

This is contentious and just a thought. Sure the humanitarian effect is horrific but in terms of actual effect on the market i'm not convinced. Mr Market would have reacted much more negatively than 3 months ago than now even much less another 3 months from now. Currency instability is largely ring fenced. Europe will spend what it takes on energy reserves. Markets react to the second and third order impacts of these crises. Many of these impacts are being or have been solved. I say again, its a humanitarian disaster but the financial disruption will be better contained as time goes by

[causecelebre]

The whole point is to break something. It's the only way to control inflation at this point.

Exactly, I think we (the market) is waiting for something to break. Some event that pushes the VIX to >44. We are in a holding pattern.

[Ricky-bobby]

Exactly, I think we (the market) is waiting for something to break. Some event that pushes the VIX to >44. We are in a holding pattern.

Yep I agree. It feels like that also…

[Muse]

NZ 10 year government bond just hit 4.419%

she's a freight train
https://www.marketwatch.com/investing/bond/tmbmknz-10y?countrycode=bx

[winner69]

NZ 10 year government bond just hit 4.419%

she's a freight train
https://www.marketwatch.com/investing/bond/tmbmknz-10y?countrycode=bx

We thought 4.4% was pretty low has it came off its highs over 6% in 2008

Might get back there again?

[Muse]

We thought 4.4% was pretty low has it came off its highs over 6% in 2008

Might get back there again?


who knows but in the short term I've always considered its the rate of change in interest rates from one period to the next that is the key driver to what happens in the short medium term spending and economic activity rather than the absolute value of interest rates (or at least of equal importance to it)

It's going to be an interesting/bumpy next 18-24 months. Did any of you catch that interest.co.nz article from a fortnight ago talking about how skinny bank mortgage margins had become this year? There is open speculation that is all to do with the RBNZ's FLP lending programme which concludes at the end of this year. Even if OCR rises stopped dead in its tracks I reckon you could see mortgage rates eventually still rise as FLP lending is turned off and their cost of funds becomes much more expensive. Layer that with an OCR that could be headed to 4.75% - not good. If the RBNZ's study on the neutral rate (which finishes at the end of this year) concludes that the neutral rate has risen from 2-2.5% even worse.

Demand remains too strong.

Think rates may have higher to go.

[winner69]

NZ 10 year government bond just hit 4.419%

she's a freight train
https://www.marketwatch.com/investing/bond/tmbmknz-10y?countrycode=bx

Not that high when you take a medium / long term view

Maybe the tide has turned and we will never low rates again?

Who knows

[Muse]

Not that high when you take a medium / long term view

Maybe the tide has turned and we will never low rates again?

Who knows

I agree full heartedly - but also reckon anything looks high when you start with the 70s or 80s!!

I note the 20 year average of 10 year bond yield is 4.22 or about 18 bps lower than right now.

A lot has changed from the 80s. Significant deregulation and liberalisation of the economy - all that over the long term should help reduce long term interest rates.

Quite a bit has changed even from 2006 - with the RBNZ's view that the neutral rate of ~5% has declined to ~2-2.5% today.

Thats the scary thing - hard to imagine it staying the same let alone going any lower - all of which directly impact the RBNZ's OCR trajectory. Neat graph on the neutral OCR rate below
https://www.sharetrader.co.nz/showthread.php?12293-Retail-Stocks&p=972931&viewfull=1#post972931

None the less in the context of that graph it always amazing how the market latches on to any tiny bit of information that indicates interest rates may drop and propels a few day rally. This market wants to run and is addicted to low interest rates like it was crack.

[bull....]

nz 10yr at 4.48 now

[bull....]

who knows but in the short term I've always considered its the rate of change in interest rates from one period to the next that is the key driver to what happens in the short medium term spending and economic activity rather than the absolute value of interest rates (or at least of equal importance to it)

It's going to be an interesting/bumpy next 18-24 months. Did any of you catch that interest.co.nz article from a fortnight ago talking about how skinny bank mortgage margins had become this year? There is open speculation that is all to do with the RBNZ's FLP lending programme which concludes at the end of this year. Even if OCR rises stopped dead in its tracks I reckon you could see mortgage rates eventually still rise as FLP lending is turned off and their cost of funds becomes much more expensive. Layer that with an OCR that could be headed to 4.75% - not good. If the RBNZ's study on the neutral rate (which finishes at the end of this year) concludes that the neutral rate has risen from 2-2.5% even worse.

Demand remains too strong.

Think rates may have higher to go.

yea i saw the story , i see they had another one saying the FLP is holding deposit rates down too around 1% lower than they should be. geez when the flp finishes could play havoc with all sorts of assets

[alokdhir]

nz 10yr at 4.48 now

Still NZD making new lows 0.5550 USD ....Rates high ...currency low ....normally doesn't happen like that ...but its a USD story going on which will help break something outside US

But higher the USD goes easier for their Inflation to come down thus automatic negative feedback loop will limit overall damage ...these are few weeks story not a long term story as longer term it will cripple US economy

[bull....]

Still NZD making new lows 0.5550 USD ....Rates high ...currency low ....normally doesn't happen like that ...but its a USD story going on which will help break something outside US

But higher the USD goes easier for their Inflation to come down thus automatic negative feedback loop will limit overall damage ...these are few weeks story not a long term story as longer term it will cripple US economy

wonder how many funds in NZ were juicing there returns like in the UK ? when rates were ultra low

[Muse]

Still NZD making new lows 0.5550 USD ....Rates high ...currency low ....normally doesn't happen like that ...but its a USD story going on which will help break something outside US

But higher the USD goes easier for their Inflation to come down thus automatic negative feedback loop will limit overall damage ...these are few weeks story not a long term story as longer term it will cripple US economy

aye the USD is a "special case" - to put it mildly! The reserve, safety currency, rightly or wrongly. Almost any currency pair is driven by expectations of interest rate differentials, with the exception of the United States. Some currencies are seen as higher risk/beta than others and react more strongly to changes in sentiment, but still proportionately to changes in interest rate differentials.

There are a few "leading indicators" that indicate CPI over the coming months in America should trend down but the FED's credibility is now so tarnished the fear is they will look over those in order to reassert their control over inflation by raising rates.

That said those leading indicators are almost always pushed into the public by "team transitory" who emotionally latch onto any good piece of news in order to argue that rates should come down, which makes you sorta question what story you are being spun.