But don't those who have been buying lately have less cash ..... seems the pile of cash is about the same as it was
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Ok, I'll admit I'm easily confused about such things. I get the idea that for every seller there is a buyer. However, cash piles can keep on growing through any number of means e.g. work! - not everything has to go into the NZX and people can have a higher allocation of cash. I see the NZX is down 12 per cent from its high so people are using less cash to get their shares than a year or so ago. And if there's better explanation then don't hesitate to let me know.
Beagle had a nice explanation for his position in the comp thread. I totally get it. Why take huge risks when one can live comfortably with the nut they have?
Yes Bobdn ….can be confusing and probably not as straight forward as some commentators make it out to be.
And I can’t argue with somebody whose top dog in the picking comp can I
"THE MARKETS
Bargain hunters drive NZ shares higher
Tweet
New Zealand's sharemarket rallied in earnest on Tuesday as investors concluded that equities had been oversold and rushed to buy at deflated valuations"
https://www.goodreturns.co.nz/articl...for+1+Feb+2022
Released just now - NZ jobless rate of 3.2% - lowest on record. Good news in itself. but also reinforces the likelihood in rapid & meaningful rises in interest rates.
I dont think either of those int rate outcomes will happen. Why not... australia are holding rates where they are for another 2 years, and so is most of the western world. High debt levels and high interest rates will cause a slowdown. The rbnz talks big to jawbone the market and does not always follow up
NZ has 5.9% inflation - Australia’s is just over 3%. There are some basket component differences to how the two counties measure - OZ would higher if the same basket. None the less, reported inflation here is nearly 2x that in AU, so I dont think the RBNZ cares if australia doesnt raise rates. Our OCR is near record lows, our unemployment rate at all time low, inflation at 30 year highs - seems logical the OCR going up soon and fast.
Interest rates already have. Swap rates and mortage costs all up significantly over the last 6mnths.
More to come too.
I'm not convinced increases in the OCR will have the impact on inflation they have had in the past
50 bps increase coming this month ?
Nasdaq been flying,up 7% last 3 days and looks like another 2%tonite.
rally from oversold levels ie bear bounce or is it a buy the dip to new highs again
take your pick people and have the tissues ready in case you pick the wrong side
Meta shares down 22% in after hours …that won’t help.
Paypal also down 25% .
Aye - its a multifaceted issue and we have but blunt tools. None the less, I believe supply chain issues form only a part of inflation, with the majority of it created by government stimulus that was issued at a vast multiple of the underlying gap in wages post pandemic to its pre-covid trend. Both here in NZ and more particularly in America. Another issue is as the NZD drops lower it will result in higher tradeable inflation, together with services inflation, labour inflation, energy inflation, supply chain etc.
I listened to this podcast on xmas eve by Larry Summers - who was 100% right in his call 12 months ago on what would happen to inflation. It's about 23 minutes long but it's one of the most insightful glances on why we have inflation. What is telling is Summers is not a right of centre economist - he served as Obama's treasury secretary and prior to that was director of the national economic council - so for a democratic leaning economist to be ringing the alarm bells the loudest on inflation then and now certainly grabbed my attention.
https://www.bloomberg.com/news/artic...sn-t-look-good
(note: ignore the video - click the audio only stephanomics podcast).
I would hope our economy will be more responsive to OCR hikes than in the past. Household debt as a % of disposable income is at all time highs so smaller rises in the OCR should have a higher proportionate impact on disposable income less servicing. The last data I have is at june 2021 and no doubt even higher now.
https://www.rbnz.govt.nz/statistics/...household-debt
At june 2021 it stood at 169% - probably more like 175% now. It's previous all time high was 158% in june 2009.
i think these stocks like netflix , meta etc etc who have missed earnings and have gotten absolutely slammed in the US ( i mean wow the size of these companies and the fall in $ value is incredible ) is a warnings for nzx and asx earnings coming up.
miss and your stock price will plummet big time
cause the other big news this week is the RBA stopping QE and im sure to raise rates soon due to inflation
Reserve Bank to wrap up $350 billion stimulus program this month as economy beats forecasts
https://www.abc.net.au/news/2022-02-...ates/100795814
and last night
Bank of England hikes rates in first back-to-back rise since 2004
https://www.cnbc.com/2022/02/03/bank...ince-2004.html
The euro jumped against the dollar on Thursday after comments from ECB president Christine Lagarde fuelled expectations of faster monetary policy tightening, although the central bank confirmed its guidance for interest rates and its bond purchase programme.
https://www.reuters.com/markets/euro...gs-2022-02-03/
a flip from dec but confirming the direction they are heading
all in all confirming a large part of the world is tightening now or soon and stocks will need to adjust to a rising rate environment and inflation
Do u know the P/E these big names trade on ...TESLA is 300 ...mind boggling 300 P/E ...and its not a tech company but a manufacturing one ...but people are paying high prices to own future Apple or so . They are not looking to make money in next 2 years but investing for next 30 years ...many traders dont have that perspective of super long term investors like pension funds etc ...they dont care if next year TESLA is $ 400 ...they just know in next 10 years it maybe $ 4000 .
Traders vs Investors is different perspective of investments ..." Time in the market is more important then Timing the market "
Our FPH / MFT are also long term investment grade stocks ...may look pricey at P/E of 30 + to traders but not to investors .
Meta has its own issues vs tiktok for now.. i am not entirely sure wall st understand that tiktok will one day go the way of the dodo and FB will be around forever... FB it is a key to the internet and has groups which keep you glued to their platform
RBA also said in commentary that. " No need to raise rates quickly " ....But surely they will rise ...but its not first time markets seeing rates cycle turning ...still markets do well in the long run . Yes for traders better opportunity can come ...but surely nothing big for investors .
Also IMHO ...this rate cycle will be very shallow just on the basis of huge debt levels of all Govts ...Mainly the short term difficulties of production and supply chain and people sentiment is driving inflation ...we dont have any capacity constraints ...just staff and supply issues .
Oil is big speculation going on ...from negative prices at start of pandemic to $ 100 is just speculation and supply issues driven sentiments .
Do u really think world is using more oil today then in 2019 ?
thats why i said in simple terms , for a start up as an example high pe can easliy translate into low pe in the future due to growth for the odd company but for most its just overvaluation at the moment. for old and big companies it is much harder to support such high growth rates yr after yr
Interesting correlations between the NZX and the SP500, with the overall conclusion that the NZX is showing significant relative weakness to the SP500.
NZX dropped 10% from peak, SP500 12%. Sounds like the NZX is stronger, however you need to consider that the NZX was down in 2021, whereas SP500 was up 20%. What's really notable to me though is the retracement from the lows. The NZX has retraced 38% (bear flag territory), whereas the SP500 has retraced 62%. In my opinion the SP500 is most likely to form an equilibrium in this range it is setting for many weeks, until we see a break either way (my bet would be downwards, but I'll be playing both directions).
One pays up for quality which delivers year after year.
It’s that simple.
This is the kind of headlines which have newbie short term traders reaching for their Valium:
https://www.news.com.au/finance/mark...12caf316f47140
“Mark Zuckerberg has experienced one of the most drastic drops in wealth ever, and it has sent shockwaves around the globe.”
So what has that got to do with the price of milk?
No mention of the fact that FB or Meta was grossly overvalued in the first place and its rise and rise had generated hundreds of billions of dollars of gains & wealth for Mark & FB shareholders. They are only giving back some of the inflated gains.
Not so good obviously for the traders who bought (especially those using leverage like call options) in the last week in anticipation of a great result.
For sure it is going to bounce once the panic stricken traders are ‘helped’ out of their stock - seen too many times over the years how the big players layer multiple offers on the sell side, spooking the inexperienced & jumpy traders out of the stock.
We see the same behaviour with postings on ST often enough!
facebook or meta is not a growth stock anymore its a mature old company thats now in decline and only used by old farts not young people. so long term investors will lose , traders have won who sold at the highs
time in the market is a sales pitch from investment firms to keep your money with them lol
Oil consumption in 2019 was 99.7 million barrels per day. In 2021 it was 96.90 million, In the link the EIA estimate this year it will be 100.5 million. So we could be close.
https://www.eia.gov/outlooks/steo/report/global_oil.php
Bit of a pointless argument. There are both long term investors and traders who would have bought recently and had significant losses. There are also long term investors and traders who have massive profits.
I will note however that a smart trader doesn't gamble, they manage their risk. If you gamble on earnings then you deserve to lose.
Agreed. Plus ignoring the Macro Economic Situation is always a bad idea.
Reason why the market was bad Last month wasn't because everyone woke up on the wrong side of bed... It is because the Fed and many other countries are raising interest rates.
Cheap Money AKA lowering rates = Higher Stock/Bonds/Cryto/Houses/Car Prices - People take out debt and spend
Expensive Money AKA Raising rates = Lower Stock/Bonds/Cryto/Houses/Car Prices - People stop spending and start focusing on debt repayments
Beware of the Dead Cat bounce... Repent while you still can!
Fuel poverty happening now.53% rise in energy costs in Britain.Oil companies pressured to go green,banks limiting loans,exploration decreased,less discoveries and it's a long time before green energy takes up the slack.Same with coal,gas.Perfect storm unfort.Thats why I have all energy picks in the ASX share comp.
But just to be clear the only time "time in the market" can't be guaranteed to work is with a just a few single stocks and commodities, according to Rich Bernstein (I tried to find the video but couldn't - might have been on Wealthtrack). So for time in market to work, one must really be in "the market" ie broadly diversified whole market funds (or ones that represent big chunks of the market) across the world. Simplicity; Kernelwealth; Smartshares/Superlife; Hatch for ishares and vanguard or whatever. There are plenty of options out there now. I spend maybe 5 minutes a year on my investments (maybe less). I just keep an eye on my 80/20 split and will rebalance occasionally.
I know we all know this but it's good to say it out loud occasionally. Time in the market with Polaroid or Kodak didn't save you lol. And Polaroid was considered the Apple of it's day.
https://www.wired.com/2012/10/instan...y-of-polaroid/
Saw this thsi morning --- sounded good but probably means nothing
If Milton Friedman were alive today, he'd be shocked at how deeply his failed and nonsensical ideology has taken hold. I mean, entirely and unshakably gripped global economic policy. What a sickness.
Tobin's Q Ratio at elevated levels - S&P500 needs to fall a lot to get back to near average levels
Long tale for oil coal and gas. Great if you are holding.A hedge to my poorly performing green stocks.
US markets futures up as Amazon, Snap & Pinterest reported good earnings after market close.
Amazon up 15% in after market trades.
https://finance.yahoo.com/news/amazo...162246834.html
Will the headlines scream Amazon up US$211billion, making Jeff Bezos even richer?
actually didnt think amazon result that good , slow down evident in parts of there business , just like meta
so the whole fang thing is starting to unravel i reckon.
fang propelled the market up big time last yr and with all the concentration in these 5 odd stocks :scared: by funds etc might get ugly at some stage
what about oil wow over 90 now aiming for $100 ( causing inflation to rise more ) and US bonds big jump no good for stocks :scared: yukky times for long term investors ahead i reckon
Meta will be the buy of the decade soon. Bottom draw stuff. TikTok will be like snap soon. Keep asking your nieces and nephews what platform they use. Or ask the grandkids. They are the best guide. After FB listed it fell lots on concerns it wouldn’t be able to generate ad revenue via mobile vs desktop. It found a way. FB run by a very smart lizard 🦎
Just to let u know as it seems u keep thinking long term investors think and behave like u ...long term investors in good stocks do not sweat too much about such cycles ...they know things are cyclic and they stay invested ...Nothing will be remain " Ugly " for ever ...eg I am invested in FPH / MFT since 2010 ...saw many cycles of rates and what not ...but stocks kept making newer highs ...imagine 2.42 to 30 and 6.46 to 88 ...of course saw many ups and downs and many advises like yours to get out and save yourself ...but investors remain invested ...maybe this time is different ? Is that u trying to say to long term investors ...or u just warning about FANG stock investors ? Not very clear to me ...
bull, time to update your name to bear :)
i do both long term and short term , just not much of either at the moment. the only really long term stock i have now is MHI which i have held since 1995 most others have sold. i buy low ride the trends sell and repeat. so in effect i time the cycles if you like.
Yes the rising cost of energy(this will last for years imo,green energy a long way from taking up the slack) is causing fuel poverty,food production costs will go up,inflation ,wages etc etc.Ive sold my fph (bought @re $3) ,RMD too as the shift to Value stocks occurs and future cashflow values are being discounted more.But I also need more cash for an investment outside of Equities so the time is right for me.
Yes, and I should be so smart as to predict the delta & omicron outbreak as well?
I added to my HLG position, confident in my analysis and continuing to enjoy the huge dividend income I derive from this most outstanding of stock.
Meanwhile, whatever happened with your ATM trade last year? It was going to bounce when it reported, remember? :t_up:
that was one hot inflation print just released. fed well behind the curve :scared: still stick to my view there going to be a surprise.
anyway asx reporting underway in earnest next week see ya next mth
Min wage up 6 percent from April, no heads up... dog chasing tail scenario. Also never mind that inflation was 5 perc and not 6. This increase adds to the inflation story.
Now those businesses in the covid firing line and on the brink just wont come back. As a shareholder, many of our companies just stopped paying divies as they needed cash, other companies were cowered into not paying shareholders or claiming legitimate money. Some have still not returned to precovid DPS. We need a shd union
The opening para's from the Wall Street Journal:
"A relentless surge in U.S. inflation reached another four-decade high last month, accelerating to a 7.5% annual rate as strong consumer demand collided with pandemic-related supply disruptions.
The Labor Department on Thursday said the consumer-price index—which measures what consumers pay for goods and services—in January reached its highest level since February 1982, when compared with the same month a year ago. That put inflation above December’s 7% annual rate and well above the 1.8% annual rate for inflation in 2019 ahead of the pandemic."
Isn't this what the NZSA is about?
https://www.nzshareholders.co.nz/
If you are not a member - just join them and support them!
Now talk of an emergency rate hike by the FED...
Don't fight the fed, up or down
I wonder what the sheiks are doing with all their oil money.
Probably funding more tribal religious wars and lambourghinis.
Flattening Yemen.
Lots of Red on the NZX boards so far today - a few solitary sparks resisting the tide though
You should not own stocks unless you know and acknowledge this critical fact :
https://vm.tiktok.com/ZSevku3A2/
I like the next tiktok that popped up after that was "alcohol is happiness". Fitting
just having a peruse of the latest MPS statement - particularly the databook.
I see the RBNZ is now forecasting the OCR to rise above 3% in mid 2023 (zero surprises) but then persist and peak at quarterly average of 3.35% in mid 2024.
both westpac and anz forecasting 3% peaks mid 2023.
so about 0.35% higher than consensus forecasts . see some of the fx pairings had a wee bump as a result
just a quick pop in till next week thought i better mention the sp 500 has broken its neckline last night of a head and shoulder pattern , one of the most reliable patterns there is. tonght might confirm with a big dip
Good time to be holding Cash, probably pay to be watching the global fundamentals rather than the TA at the moment
Attachment 13558
Have been 70%+ in cash and short term deposits since early January.
Sold all shares yesterday, followed my gut, close call.
I've been investing in the share market since I was 16 - that's around half a century ago. I've always been an investor and only rarely a trader - that's because I've never been any good at picking the highs or the lows in the market.
I've built up a substantial portfolio that sometimes is worth an amazing amount on paper - and sometimes (like right now) - it's worth quite a bit less. My portfolio is however, even today, still worth much, much more than my initial investment.
I enjoy watching my portfolio value increase though it's definitely not so much fun watching it plunge as it has over the past month or so. However, I've been through periods like this before and the market has always recovered - and gone higher.
I'm extremely fortunate because I don't need to draw on any of the capital I have invested. My shares pay dividends (sometimes more, sometimes less) that are always way more than sufficient to meet my annual outgoings and pay for lots of overseas travel (when that's possible). I also maintain a cash balance equivalent to around 4 years of those expenses as a further buffer against the downturns in the market.
I will be sleeping well tonight, not worrying about what's happening on share markets and planning some travel for later this year (not to Ukraine though).
I feel deeply for the people of Ukraine. I watched a Netflix documentary last night on their battle to oust their pro-Russian President in 2014 and know that they now have an extremely difficult period ahead of them as Putin wreaks his ultimate revenge. NATO will probably just make lots of noise but take little real action and sadly, I expect Ukraine will lose it's independence.
Once Ukraine is annexed to Russia, the world will ultimately return to some semblance of "normality," interest rate dramas will eventually subside, hopefully Trump wont be re-elected in the US - and at some point share markets will recover.
Congratulations to those who cashed out recently - I hope you can pick the right time to return to the market.
Putin threatening anyone tempted to interfere or create threats to our country should know that Russia's response will be immediate and will lead to such consequences as you have never experienced in your history" etc on CNN.
So the transparency of the Butcher there for all to see .