I agree and think we are closer to the end of this sell - off than start ....
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Red bear day for sure a lot of stuff at rock bottom ,J B I hope the end is nigh !!
eyes on that inflation data
The US Fed meeting today and tomorrow and will be fascinating what they decide...do they pull out the bazooka 75bps rise for the first time since 1994 (the new fear being price in now)? Or do a 50bps rise but talk hard about more and higher interest rates (even threaten a 75bps if needed), or just do a piddly 50bps rise (in which case a short term rally).
we will get to where we get to regardless but will certainly cause some volatility this week on the upside/downside depending on what they do
Jim Cramer and a lot of other commentators just want them to get on with it and do a 100 bps rise. Tell the market they're serious about taming inflation and try and restore some shred of dignity from their egregious largesse in recent years. I think if they bite the bullet it might actually help...otherwise I fear the market sees they are just toying with trying to get the inflation Genie back into the bottle and the Bear market continues on unchecked.
its interesting where the orthodox ever came from...that 25bps is a normal hike, 50bps a big hike, and anything north of that is super duper extra ordinary. I guess the fed/ocr is but one piece of the puzzle, for floating rates, whereas longer term swap rates are set by expectations gleaned from where the fed/rbnz statements and interest rate guidance for future fed rates. but none the less, if you have an issue now, and given there is quite delay in how spending responds to monetary policy, I don't understand waiting around several quarters to get to where you need to be now.
another interesting aspect is the difference in how different countries fix their mortgages. Americans tend to fix for 30 years (and pretty common to refinance in falling cycles), kiwis tend to fix for 1-2yrs on average, and the majority of lending in oz is variable (which explains a bit why they panicked so much when the RBA raised their rates more than expected - and in the face of only earlier in the year being adamant that rates wouldn't rise until 2024 at the earliest). so in theory consumers should be the most sensitive to rises in AU, then NZ as people refix, and last in the USA. then households will have none mortgage personnel lending which will be shorter term, and then businesses usually only fixing a portion of their debt (say75%), and in difference tranches of maturities (but say circa 3-7 years).
Its official, the Bear is here https://www.nzherald.co.nz/business/...DZU4Y7XV5RJBM/
Paywalled. Contains get picture of an angry bear. Here's another https://www.bing.com/images/search?v...t=0&ajaxserp=0
This bear
Attachment 13899
Heaps of buy alerts I set 6-12+ months ago going off. Still sitting on hands.
At times like this, good to have a decent amount on the Unlisted market. While the low or illiquidity can be a double-edge sword, definitely feeling the benefit the like of today.
Only 2 companies are down today....PAZ down 3c/4.4% or Zespri down 0.5% (which you can't buy anyway).
Poor homeowners who recently bought in Auckland.
Might be simpler to declare bankrupcy -- don't let the banks own your entire life.
Well said, Crypto is nothing more than the current version of the tulip / deer velvet / angora goat boom that went bust although at least with those three they were actually real things. Supporters will say, no wait,, its different this time, (where's my Tui ?)...just like every other supporter of every other temporary "craze" said last time.
Because there's not actually anything real and tangible its really just a Ponzi scheme in drag in my opinion.
The US and european markets are untested for higher interest rates.
..14 years spent at near 0%.
I think if you take a good long look at the history of crypto with a new set of eyes. I knew people "mining" bitcoin and it is the currency of choice with scammers and dark net dealers. Give it some cred and it's still lipstick on a pig. The only reason the make it more acceptable to mainstream is tax.
There's any number of experts (such as Warren Buffet to name just one) that think Crypto has no value.
Eventually digital currency of one form or another might go on to be a widespread means of exchange but there is no plausible or reliable way of saying what form that might take and whether any of the existing crypto currencies might be "the one".
I'm not pretending to be an expert on the subject, I just think this is an extremely risky and highly speculative area of the market. Crypto pays no dividends and earns no interest but in news out overnight it appears one major exchange has been halted because of outflows and it would seem some people were lending their crypto at interest rates up to 18% per annum. In my opinion a lot of this speculation has been fueled by a tech asset bubble not dissimilar to the dotcom boom just over 20 years ago.
The Nasdaq lost about 90% of its value as the dot.com boom came crashing back to earth in 2001 and 2002. The same or worse could easily happen to crypto. The bear market in tech and in crypto in 2022 has happened at the same time. Coincidence ? One of the big arguments was that crypto was going to give valuable diversification. The Bull and now Bear markets in tech and crypto seem to have happened pretty much in sync from what I have observed. Nasdaq has been in a Bull market ever since 2007 until recently.
I invest in productive companies that pay me good dividends. Wild speculation in digital things like Crypto of NFT's that pay no dividends and can only go up based on the greater fool principle is not for an aging Beagle nearing retirement. Maybe for a young person as a very small part of a very well diversified portfolio but its not for me. In my career of 40 years as an accountant I have seen Deer go up as high as $20,000 a head as lots of people thought the Velvet from their antlers was the panacea for all their ills and Angora and Cashmere goats go as high as $15,000 a head as what they produced was supposed to be the next miracle product. Neither of these livestock types are anywhere remotely near those values now. It was all based on limited supply, demand and speculation about the next big thing that was supposed to happen. Hope that adds some useful perspective for you.
Easy riches can disappear just as easily as they arrived https://www.cnbc.com/2022/06/14/cryp...reum-fall.html
There is a perfectly good Cryptocurrency Sub Forum for this sort of mindless argument and I strongly suggest that you all take yourselves and your worthless opinions off to it.
I don't think Buffett is an expert, actually. I would guess he has trouble logging into his "hard drive". Some good points you make, however. But there are two things that allow for a successful medium of exchange/store of value. 1) scarcity, and 2) tradition. Cryptography can create scarcity just as well as finding and then digging precious metals out of the ground - except it's pretty difficult to send, for example, gold over the internet. And tradition just occurs at a certain point. Of interest is that both these things (scarcity & tradition) turned cigarettes into a currency in prisons.
On another note its looks like the Bears claws might be getting a bit of a trim on the US tonight.
Interesting video https://www.youtube.com/watch?v=rE2izXZuaJ8
This Bear market is the real deal https://www.nzherald.co.nz/business/...GLKTHLHXLZ3DQ/ Paywalled.
I mean, this is just what happens. Same conversation after the COVID crash. Some see this price action and feel vindicated - even though said price action is across all global markets.
It's quite good to register the same conversations at the peaks and troughs of cycles for future reference. I understand the scepticism; I trade it to make money. I'm not attached to any particular narrative.
I'm not saying it can't go zero of course. BTC has always flourished in an easy money environment - now comes the real test once we move through this capitulation period.
I listened to a podcast the other day and the bitcoin bull guest said the way he views bitcoin is the same way he views an insurance contract. The insurance contract is something you pay for monthly but how do you calculate its intrinsic value..?
And he was saying the de-centralized blah blah bitcoin is in a way the same.
I like the idea of bitcoin but wowee it is volatile. Totally un-investable
Crypto reminds me 100% of the Dotcom mania. FOMO.
Any company with a dot.com doubled in price, irrespective of what it does.
It got to a stage that one company called itself Dotcom.Dotcom!
When the crash came for Dotcoms, they all went crashing with most of them dead.
People have to own their own decisions. You know I have always been an advocate for a well diversified portfolio and taking a proactive and prudent approach to risk management but its clear you have very different ways of doing things and won't change.
Some people are eliminating all debt, strategically repositioning their portfolio into more defensive shares, freezing any capex expenditure and battening down the hatches with expenditure for a long Bear market. You already know I'm also an advocate for staying well informed of international news and the world's leading business channel CNBC channel 91 on Sky is definitely a subscription that is well worth the cost. You get access through interviews they conduct with the world's biggest company CEO's and fund managers and other experts to some of the world's greatest minds, (far, far brighter than you or I), and their current thinking for a very modest monthly subscription cost. Maybe you could give a go for a while and see what you think...that's my top pick for you for an inexpensive and actionable strategy you can start with !
No need for sackcloth yet but my Dad had to wear exactly that in the great depression years so you never really know what's coming.
Kia ora Beagle and Couta - you seem to be at opposite ends of what I think of as the "caution spectrum", and as I have just got home from a menz group where we discussed exactly that in relation to lots of facets of our lives, the topic is very much "front of mind" for me.
I think you are probably both right in your own particular way, and it occurs to me that one of the secrets of investing happily and being able to sleep soundly is knowing ones own tolerance for risk and uncertainty, need for security, and desire a particular level of material posessions.
People are different. I guess that is no big news - but in relation to the way they invest and the level of income and material posessions they want/need to have - their own personal and family history seems very important.
Like Beagle, I grew up with tales of the depression, and a mum who kept every cupboard in the house filled with "stuff too good to throw out". She was into saving, and kept her inheritance (two thirds of a good farm) in the POSB until inflation had eaten it away to the price of a small new car. So my family's example around "thift and security" was certainly equivocal.
In my own life I have been very very poor. That wasn't nice because our level of material comfort was low and I was too busy trying to lift us out of that situation to give my family the time and attention they needed.
Later we were just poor. That was much better because we were physically comfortable, fed well enough, and with time to spend together and energy and attention to spare for my family, I was pretty happy and learned that I don't need a lot of material posessions to be content. My subsequent saving and investment strategies have reflected those learnings about myself. If the **** hits the fan bigtime, I can always row out and set my longline - and still be happy.
But other people need/want more, and behave accordingly. Beagle has worked and invested to get a substantial amount of money and he needs it because he has expensive tastes in boats and cars (and probably houses), and he is cautious and defensive when the bear growls. His father's experience in the depression still resonates at some level.
Couta is different again. His material needs/wants seem greater than mine , but he has "risked big" in the past.
None of us are wrong!
Guys! guys! Sorry to interrupt! Oil is marching higher just now and the NZD has sunk further.
Will we see double digit inflation by the end of the year? It could be like the 1970s all over again. Exciting!!!
Most of our opinions are wrong, to varying extents, most of the time. However it isn't high impact because they are not views that are tightly held, we have no intention of acting on them so it's inconsequential what our opinion is.
One of the things I enjoy most about investing is there is an objective truth that is measurable and verifiable. It's an unabashed honesty I've come to appreciate.
Brown, asbestos, smelling of spilled beer and stale cigarette smoke?
The S&P500 averaged a 17.4% annual return in the 1980s - Stocks are the best form of inflation protection normally.
And if wage increases are in the same ballpark as inflation, then mortgage balances get inflated away in real terms as mortgage payments are always a lot smaller than a person salary so any increase in both works in favour of those in debt.
1. For instance Paul & Nancy earn after tax salary of $100,000 & has mortgage interest payments of $30,000, leaving $70,000 remained of after tax income. Their mortgage principle left is $350,000 which is 3.5x their after tax salary
2. After a period of time their salary & mortgage interest payments have increased by 50%
3. Paul & Nancy now earn $150,000 and their mortgage interest payments are now $45,000, leaving $95,000 remaining of after tax income. Their mortgage principle left is now $300,000, which is just 2x their after tax salary.
Yes there spending power (after subtracting best interest costs) in inflation adjusted terms is a bit lower, but their debt burden as a proportion of income is drastically lower (not to mention any stocks or savings they may have would be worth 50% more as well, and the property they have the mortgage on probably too).
Yes a very simple hypothetical above (the gains get smaller if wage increases are less than debt interest increases), but highlighting that sometimes High interest rates can also giveth, and not just taketh.
MHJ and SKC held up well today. Amazing performance.
When did you buy your Bitcoin. Are you up overall or did you buy in more recently. What percentage of your portfolio is Bitcoin.
I'm a boring old etf and index investor but I still allow myself 5 per cent to put towards anything I want. One has to have some fun.
Any stock that did not move down today is an amazing performance.
I'll answer that with the following. I think every investor should put a sliding 30% to 5% of net worth into high-risk investment according to age from young to old; and Bitcoin now in my view is not in that high-risk category anymore; and that the ol' coin is easily the greatest investment in my lifetime, and anyone who bothers to study its growth via yearly lows since inception will see a "volatile" asset that goes only one way: up. It is a 20-year growth play via multi-year periods of ever more functional stability, and with over 100 years of mining left. Rome wasn't built in a day. Satoshi couldn't have said in 2009, "Here's Bitcoin. It's worth $1m a coin." It will take 20 years. It's a projected 4-storey building. We're now on the 3rd storey which is livable and available but still in construction. I liked the look of the 2nd storey when that was all that was available, and acted accordingly. It astounds me the ignorance I hear, where any empirical look at the history of Bitcoin and its protocol clearly shows what an incredible invention it is. As for "crypto" and "NFTs" and "blockchain", I'm not interested in any of it, it's all garbage. The future is Bitcoin, not "crypto".
Bit Coin "fools greater Theory".
https://www.cnbc.com/2022/06/15/bill...ol-theory.html
its going to be around for a while and maybe bitcoin goes to zero and other technologies split off from it as has already happened.
well at least with Tulips you could use them in a flower arrangement which is more than you can say for some funny maths....
and Gates doesnt need anymore money.
No one here has any interest in Bitcoin - whether long or short - because most here are old enough to have seen speculative bubbles before and are aware how unpredictable the inevitable blow up is.
Everyone with half a brain can see the con a mile away. But there is always another generation around to learn the hard lesson. This one is told to read Sapiens and all of a sudden they think they are onto a goldmine, ignoring the obvious telltale signs repeated from cults, scams and pump and dump actions from many past renditions.
don’t forget to tell me “to enjoy staying poor” & “you don’t understand the technology”’.
The funniest thing I like watching is Bitcoin Maxis freaking out when people started talking up Dogecoin and complaining that people did not realize its “not a real currency”. the lack of self awareness is just the chefs kiss. I never laughed so hard ever as I did then.
"No one here has any interest in Bitcoin"
Even for you that's an incredibly pompous statement. Well done.
"speculative bubbles"
Do you include the current S&P and the Nasdaq in this? Or are those almighty slides something different?
"Everyone with half a brain can see..."
So you admit that's you. Well done again.
Waltzing - my 5 year old niece has created 10 coins from old weetbix cartons and her crayons, only 10 & a half of them will ever exist (the dog ate half of one). Due to their scarcity they will one day be worth $10 Trillion each. You can get one now for only $67,000.
Bitcoin is not tulips. For a start, tulips are not divisible and spendable over the internet and at the same time stopping double spend.
And I'm not talking about Gates who ignorantly thought you couldn't short Bitcoin, I'm talking about the people here, for a start. Why is it that if Bitcoin is going to zero etc you aren't informing everyone about your Bitcoin shorts? I thought this was an investment website?
Ha ha ha - is that all you got? Surely you can do better than that! You are failing to erase all doubts in the superiority of the almighty bitcoin!
Don’t forget the key rule number one to being a Bitcoin pusher is to ruthlessly shame anyone who remotely expresses doubt in bitcoin to the point that they shut up and stop discouraging others with their logic! Apes strong together!
@Azz sounds like you've done well getting in on the "second floor". I should have bought a handfull when it went down to $5000 NZD in 2020. It wouldn't have hurt and as long as I keep to my 5 per cent "mad money" rule, it's ok. My 5 per cent is oil at the moment (equities not the commodity)
Soo what you must understand is that those who relate bitcoin type things to pyramid scheme type things, don't want anything to do with it... at all... It has nothing to do with trying to profit off it. There is no regret or 'fomo' as involvement is simply not desirable nor palatable...
First of all, I don't believe a word of that. These people are making proclamations and predictions and are completely 100% sure of their correctness. And yet, on this INVESTMENT website they don't wish to use instruments to profit from their complete and utter conviction.
Secondly, at what point do these people admit they're wrong? How many years do they need? How many "it's a scam" screams can they yell?
Bitcoin:
$30 - it's a scam!
$100 - it's a scam!
$150 - it's a scam!
$300 - it's a scam!
$1,600 - it's a scam!
$3,000 - it's a scam!
$6,500 - it's a scam!
$10,000 - it's a scam!
$20,000 - it's a scam!
$65,000 - it's a scam!
Bitcoin will put in a bottom soon. And that bottom will be what used to be once an all time high. That is an asset in an overall *upward* trajectory.
I mined 0.06 bitcoins back in early 2013 when Bloomberg published a story where Jamie Dimon was asked about it. I thought a digital currency was a novel idea but basically lost interest because it was never widely adopted for real-world purchases. In no way on my part did I ever think people would turn it into a speculative frenzy.
I don't pretend to be an expert in any way but maybe it's like BetaMax? It's a good proof-of-concept and might one day lead to something useful for society.
Powell just slugged it to em... and the market goes GREEN!!!
you know "the crowd goes wild".
bugger though the market could go lower.
Market has no problems with rates going up ...thats already in the prices ...Markets needs certainty of a Plan to tackle this Inflation problem and Powell provided one which market seems to accept at the moment
Talk of 3.8% end rates also didnt spook the markets ...as its little below what market thought already
Also a survey says the locals are putting more into shares then TD's.
This is good news for the investing community but one would hope it doesnt end in misery as the companies dont live up to public expectations.
Its not the market thats the problem its the Bond markets and any up ticket could still be short lived.
Revised earnings are yet to be released. As we all know rates alone wont stuff out inflation it supply side.
perhaps the GOVT has under estimated the investment mind set of average kiwis loving the idea of MAKING MONEY and Capital Gains.
They LOVE the share market for the first time since the 80's!!!!
A good read of how a Joe Average handles bear markets and invests successfully over 70 years :
https://www.marketwatch.com/story/th...et-11655253258
Always remember that markets are driven by hope, greed and fear.
Fear is by far the most powerful emotion which is why markets drop as sharply and as fast as they do.
Learn to control your emotions and treat bear markets as great buying opportunities.
For long term investors that is.
Good investing, folks! Have a lovely day!
Thanks for reminding us all the high was $67k (todays low was $20k - a ~70% pullback from ATH).
You keep bringing up “why not short?”. Ok here you go:
Normal investors don’t short anything, they simply don’t invest in them.
Reasons for avoiding shorting:
- Shorting makes you a trader, and the associated negative tax consequences would be stupid for most of us here with large investment portfolios.
- Shorting exposes you to unlimited losses as there is no upside cap on a value, whereas being long has a known maximum downside exposure, any experienced investor knows shorting is far riskier than being long.
- Timing is impossible to predict, you can be right but still lose if you get timing wrong, which is especially risky with highly volatile speculative assets.
- Shorting something means you pay for the cost to borrow the asset you are shorting, or the premium on puts if you use that tool. Also
- The ability to short is thankfully limited/non-existent through NZ broking platforms, and next to non-existent for anything crypto-related.
The reasons to avoid shorting anything (not just crypto) are long.
Most here were investing through previous bubbles (particularly the 2000 dot com bubble) and know exactly the risks. It was easy to see in 2000 that there were thousands of nonsense companies with ridiculous valuations and it would all end in tears - but any attempt to short by bearish traders before the final crash was usually a fools errand and you ended up with your faced ripped off as stupid valuations increased to insane valuations and beyond - it’s simply impossible to know how stupid people will get in a FOMO environment. It’s both sad and amusing to hear all the exact same weak arguments being made by young people as to why crypto is a good investment as that blurted out over 20 years ago about dot com companies. A technology is not the same as a sound business model. Unfortunately the only way most of these people will learn is from the experience of losing their money.
Another example why shorting is a bad idea, even when you are right: I have some acquaintances that successfully identified a lot of the bubble stocks in the most recent market run up (most of the SPAC names etc) - however even though they were completely right in the companies they identified as going to collapse in value (which they all now have), they lost a lot of money attempting to short them on multiple attempts, as the companies continued to move higher. Repeating for emphasis: with shorting you not only have to be correct in picking which assets are overvalued, but also when the downward correction will happen (which is essentially impossible to predict accurately).
Its much easier to simply identify good investments and buy and hold. Plus, if you are wrong in your judgement or timing the maximum you can lose is what you invested (as opposed to the unlimited exposure of shorting)
When it come to shorting, the best and safest move for the sensible investor is simply not to play.
That's actually the first thing you've written that contains a semblance of thoughtfulness. I don't agree that one should never short, but you make some good points.
However:
"you can be right [on your short] but..."
The main reason you're not gonna short Bitcoin is because you're wrong. And in your heart, who knows, but I suspect you know this.
I'm very happy with the Bitcoin situation through this massive stock market crash. You may not be aware, but some stocks are down 80% or more. Bitcoin is putting in a floor at US$20k which not too long ago was an actual all time high. And along the way, most of the "crypto" garbage is getting destroyed.
Oh and I was invested through the dot com crash. Actual US stocks. So don't preach to me about your great wisdom when you have no clue about who you're dealing with.
Doesn't appear Bitcoin would have been an any worse investment than the A2 Milk company, I'd be down the same amount but I reckon i have more confidence that Bitcoin will retain its former highs than A2, sounds like stocks are just as much of a gamble after all. Lol
............
Its far more complicated than that when your held the size holding i did at the time ( Most will never find themselves in that position including you so making your sort of comments are rather condescending) My point stands A2 is no better than Bitcoin, actually worse IMO.
A2M has been very very very good for me.
And will be again in the future.
No apologies from me, couta1, for bringing it up - you alone chose to ignore the numerous warning signs in a very very liquid stock. Well covered too on the ATM
Thread where we were roundly abused by A2M holders for sounding the warnings.
Trust you have learnt your lesson as I did with a few stocks where I blew $xxx,xxx.00