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The top of this cycle for ASX200, cash is king ?


kahuna1

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In reply to: jkconnor on Monday 21/01/08 07:08pm

QUOTE
This crapola in the market place is nothing when you think about it in perspective

 

That most certainly DOES put it into perspective. Condolences on the loss of a friend, JKC, and although I didn't know him, the loss of a husband and father is a much bigger loss to his family than a few bucks difference in the bottom line of our portfolios.

 

When we are all feeling sorry for ourselves as we watch our fortunes rapidly diminishing, we should just stop for a moment, and think about what we DO have instead. Like health, love, and life itself - which Tim Willoughby and his family have lost.

 

Thanks for putting this all into perspective, JKC.

 

 

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In reply to: pkay on Monday 21/01/08 03:45pm

Any of the big banks are worth buying at these levels and they pay divs soon so a good bet to buy and sell before div payment and sit on the cash.

You would have to be fearless to trade specs at the moment.

The market will rally very soon,no question on that but i fear only to about 6200 and retrace to lower levels as we are in the first cycles of a bear market,tough call to hold long term at this time ,cheers mrbear

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In reply to: mrbear on Monday 21/01/08 09:22pm

 

 

if you consider that the catalyst for current events has been tightening lending standards due to the popping of the US housing market which has lead to --> writedowns in the finance industry; spreading of housing market downturn in UK / Ireland / Spain --> less spending ---> impacting the real global economy --> defaults in other areas eg. credit cards; personal loans; corporate borrowings; loss of jobs ---> reduced lending by banks (continuing the downward spiral).

 

Now let me paint a scenario where banks operate in this global climate plus in a domestic market where the housing market started earlier than in the UK & US, has gone for longer, and has gone up higher in terms of any housing price metric (price to income; price to rent), and the downturn has not even started. Would you be buying any local Oz banks?

 

I think you have to be fearless buying banks. I agree the ASX is likely to go back up in the near term but it's unlikey to be Australian banks leading the recovery in my opinion. Enjoy those dividends while it lasts.

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So what happened then? To gold....

 

Gold - you know - the safe haven that people flee to when the market crashes?

 

It's currently down 1.5% for the night.... ???

 

Silver is down 2.6%.

 

The world has gone completely mad. Lunacy at its best.

 

This increasing sense of panic and total and utter irrational "sell at any price" action is how it felt on that Thursday last August.

 

The fact, however, is that there is a LOT of money out there looking for a home. Australia is awash with super funds and money.

 

It can't be just "mums and dads" pushing the markets down like this - this is the work of big banks, brokers, funds, hedge funds, and other market manipulators. OK - some of it is the retail investor, and some is the big end of town getting their books balanced. But I suspect that a large chunk of what we are seeing is a massive shakeout that will come to a sudden end. But who knows when or where that will be? I sure don't. But when it does end, I suspect that it will rally hard and fast, and that Australia will rally harder and faster than most if not all the other markets.

 

But to hold onto stocks through this, will take balls of steel! But it may yet be the best strategy.

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In reply to: NightStalker on Monday 21/01/08 10:25pm

 

 

Despite the gold stock sell-off gold prices are still above AUD 1000/oz and in blue sky territory. With the likelihood of big rate cuts / fiscal spending of plus $150bn, more pain for financials the fundamentals never looked better. Who said markets are efficient and rational.

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In reply to: NightStalker on Monday 21/01/08 09:55pm

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But who knows when or where that will be? I sure don't. But when it does end, I suspect that it will rally hard and fast, and that Australia will rally harder and faster than most if not all the other markets.

 

The bottom of this market could be sometime off yet. But I agree the fundamentals in Australia are so strong (provided that economic policy, interest rates and inflation controlled) that the ASX rebound will be astonishing.

 

I've only got defensive and cash generating companies, no specs or little mining.

 

I have no doubt our market will deteriorate before improving considerably. But now is not the time to be cashing in my stocks. lol........just got decide when to buy more

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European markets are faring even worse today.

 

From an article at http://www.reuters.com/article/marketsNews...?rpc=44&sp=true

QUOTE
"Getting pummelled," said Henk Potts, equity strategist at Barclays Stockbrokers. "A mixture of weak global economic data, poor corporate data, increasing fears about the possibility of a recession ... have left investors drowning in a sea of red."

"This looks like a climax sell-off," said Brewin Dolphin Chief Strategist Mike Lenhoff, adding that the slump looked overdone.

"People are left to hold oversold positions until they're blue in the face -- interest rates are going to be a lot lower by the year-end and some of these valuations could look silly then."

Monday's fall is the index's eleventh drop in 14 sessions. It has already lost nearly 15 percent this month.

Germany's DAX .GDAXI plummeted 7.2 percent, while Britain's FTSE .FTSE slumped 5.3 percent and France's CAC 40 .FCHI slid 6.7 percent.

 

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Before this correction began the average PE of Aus stocks was around 16.5 which was historically low. Not what you would consider a market on the virge of collapse. Now Miners like OXR have PEs below 10. Many top 100 financials like Stockland have PEs around 5? What the heck is going on! Bargain shoppers paradise or what! Who cares time for buying - cant loose at these prices!
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