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


kahuna1

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Yep

at times I feel the futility of it. Stocks likely with a long path if ever to break even ... darlings of the new Robin Hood traders.

Then I remember, time and time again, over and over, the cycle of the market. the hero's, become sad zeros. Sometimes it takes years. So many fads, stocks I hated at say $10- loved at $1- and back and forth we go.

 

As to fiat currencies, I agree to some extent ... ones that have no fiscal restraint or even trying are at best jokes and eventually sometimes a much longer time frame, crumble. That they are not back by physical gold is to me an aside. Its whether the government accurately reports inflation, attempts to balance the book and erode or god forbid pay back debt over time. USD fails totally on many fronts where the EU and AUD are on totally different tracts.

Buying some fad ... I have some cheap new bitcoin for sale ... backed by nothing awaiting some 12 year old with an Atari computer to steal. Then again, I see the value of something like a stable coin backed by say a list of commodities and yep including gold ....

 

Right now extreme Covid Fatigue is setting in . Backed by an idiot of a dictator who again today suggested some magical medical cures for Covid.

Suggested mortality rates are falling when their main drug was effectively banned in half the world last week. Reality is, sadly, post May the mortality rate has remained basically constant. If one looks at pre May 2020 in the USA, it hit the very elderly and vulnerable and yep treatment has improved, a tiny fraction. Main drugs are .... ones used for 30 years.

 

If one keeps this curse out of the elderly .. where mortality is off the charts, of course the numbers go down.If your hospitals are not totally swamped ... same thing ..

Ventilators .... same thing ...

 

Sadly for the USA with Thanksgiving next week on the 26th .... likely most families will celebrate, indoors and well an already bad thing become worse for them. Then we have Christmas ... same stuff ...

I too am sick of this virus ... but relaxing if I was in the EU or USA is not an option. Death numbers for the USA already occurring right now, but not to be reported due to the lag for 30 days, are shocking even the ones being reported NOW let alone the doubling from here already locked in. They have occurred or totally unavoidable ...

 

Into this today we have a president again and again downplaying the issue, touting non effective drugs and yep ... totally nuts.

Vaccine is coming, even if its not well tested. Of course good, but at best 7% of USA by end of year. Yes Good but until end of 2020 PLUS 20 days for the second shot so 20th Jan 2020 .... 9 weeks .... NO change. NONE.

 

Lets relax since the plane in front of us landed safely ... the pilots take a break and see what occurs.

Market wise, well ... been around a long time. The same old same old, this is the new way to do things and your wrong, blah blah bah. Strange that buying an asset for 50 cents in the dollar instead of following the herd buying the latest fad that is trading at 100 times sales. No profit, so no P/E is the quick way to riches. Well it is, as long as the music does not stop or pause.

 

Prefer my way.

 

If anything overnight the USA side has gone nuttier via Trump. I do tend to focus on the USA for the very good reason that the world follows them in equity pricing. They go up, we go up, they get crushed, we get crushed. Reality is .... REALITY is that USA has stuff all to do with our economy. Its not even an important trading partner other than when we buy planes that don't fly or rusting old USA warships.

 

I note that the USA senate has taken another break. It managed to confirm a Judge for life aged 19 ... prior to the break. Well not 19 but 33 ... with barely 5 years of third grade experience. NO stimulus, no funds for vaccine deployment .... no agreement for the budget so the USA does not shut down when the current debt limit is hit in 25 days.

 

Oh and covid wise new highs ... death post May. Of course the market rallied silly.

 

 

For myself, yes the vaccine will be good but, well until say mid 2021 not much of an impact if even then with likely 40% in the USA not taking it.For me, its assured USA hits reported 350,000 dead by Jan 2021 ... likely 450k or 500k .

Half if not more avoidable.

 

Trump seems intent on causing mayhem. I did see the New York attorney general on Sam B and beyond being funny, if I was Trump, I too would be worried about loosing protection. This woman, an African American ... did not threaten or bluster ... just went we are prepared. Trump University which was a sham she closed down .... and so too Trump Charity same thing a sham ... the charges for them were not able to be enforced due to the clowns location at the time. As for the rest, they are even more serious tax evasion, insurance fraud and a blood long list ...

that's what this tantrum is about Trump wise. Neo liberals go oh its business .... it is NOT business to put fake totals in your tax returns. One set for on group and another for the other, and a new set of books to the banks, and another even more absurd one for the insurers.

 

I would prefer NOT to be on the receiving end of this sort of stuff.

 

Meanwhile the market will do what it will. Robin Hood traders, the new generation of heros and YEP .... I was one in another life, not a hero ...

 

There are old traders and their are bold traders, but no such thing as an old Bold Trader. The percentages and stupidity get them every time.

 

aoaoh look USA rallies to its high on the close. Must be the new record deaths reported yesterday but on virus numbers form 4 weeks ago ? Or is it that the senate has taken a break ? Or that Trump is still foaming at the mouth on twitter ?

 

I find it amazing the excuse for the rally this day. Will they blink ? Likely not. I await of course the music stopping as it always does and ... the bargain sales that occur every few months.

 

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Not so much as COVID fatigue, more like fatigue from all the bullsh1t from RightWing groups.

 

They said trust us, we know better. They failed to deliver on that trust.

 

By RW I mean in general, the system that we have lived under for the last few decades, where inequality is a consequence of the culture wars.

 

I see 2020/21 as being the period when RW suffers a recall for exceeding their use by date, dinosaurs like Trump will be indicted and interred, then stuffed and mounted in a museum somewhere. For amusement. The ultimate reality show.

 

It’s a period of major disruption and for the most part, it’s all good.

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Jeremy Grantham has come out with a cogently argued Top of the Cycle, repositioning is King argument. But when? (maybe April to June ish)

 

https://www.gmo.com/australia/research-libr...the-last-dance/

 

The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.

 

These great bubbles are where fortunes are made and lost .... and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in.

 

But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.

not sure his conclusions work for me, but then I am not a multi billion fund manager

As often happens at bubbly peaks like 1929, 2000, and the Nifty Fifty of 1972 (a second-tier bubble in the company of champions), today's market features extreme disparities in value by asset class, sector, and company. Those at the very cheap end include traditional value stocks all over the world, relative to growth stocks. Value stocks have had their worst-ever relative decade ending December 2019, followed by the worst-ever year in 2020, with spreads between Growth and Value performance averaging between 20 and 30 percentage points for the single year! Similarly, Emerging Market equities are at 1 of their 3, more or less co-equal, relative lows against the U.S. of the last 50 years. Not surprisingly, we believe it is in the overlap of these two ideas, Value and Emerging, that your relative bets should go, along with the greatest avoidance of U.S. Growth stocks that your career and business risk will allow. Good luck!
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CDC ... study ...

 

I note a few things.There were over 20 extreme reactions inside the first 10 days in the USA .... extreme as in life threatening.Whilst not an anti vax person at all, CDC and USA FDA both have failed in massive dangerous fashion of late. FDA approved the malaria drug only to have it pulled for emergency use. Approved Gilliad Remdesivir to treat the virus and even gave it full approval. EU on the other hand banned the very same drug.

Reality is that few doctors use this drug now ... either USA or EU .... it had and has issues with kidneys and livers and WHO study with 17,000 people found it had NO effect .... none zero and so too 2 other studies the FDA and CDC ignored.

 

Anyhow CDC study ... which is ...

 

https://news.yahoo.com/1-100-000-had-severe-193625427.html

 

Total BS ... even the wording is deliberate deceptive. In a clinical trail and vaccine trial a need to have an eppy shot ... a life threatening reaction called and EXTREME reaction. Not a severe one ... which is much milder and not needing a visit to the hospital. Thankfully due to the vaccine needing special treatment and now shots are given under doctors supervision to see if their is an allergic reaction.

 

the full data for Moderna and Pfizer vaccines, clinical trials, had ZERO .... no extreme reactions. NONE.. .... and they had 20 in the first 150k ? Seriously !!

Do you think it needs MORE testing ? Of course the need is immediate and well, corners cut .... along with the pile of money for both of them.

 

This to one side ...

another factual article and well here it is ...

 

https://bjanaesthesia.org/article/S0007-091...1009-6/fulltext

 

Also read the full studies of both vaccines and was personally appalled.

 

CDC I suppose saying its 10 times more reactions than a the flu shot sounds ok. Sadly they used the reactions seen the first week of vaccinations so about 150,000- .... then used the total people given a shot as of week 4 .... so over 2 million which is ... what it is.

Understating the issue and reactions by a factor of 10 .... in plain sight !!

 

I suppose reactions are yes rare, even despite this clear and obvious tapering with data and pseudo science by the USA again.

Sadly some of the reactions seen are longer lasting such as bells paulsey which in some had not resolved by the end of the clinical trials along with immediate rheumatoid arthritis.

 

I did and do note the whitewash by even normally decent scientific magazines. One article in Stat magazine actually suggested that the reactions were coincidental.

 

Yes of course over a vast population people will have every sort of normal reaction over time however .... a person given the vaccine immediate developing a rash, difficulty breathing or blowing up like a puffer fish is what they were trying to actually dismiss.

 

Total crap .... of course a fine line between anti vaccine nutjobs and getting people vaccinated.

 

For myself will await a more tradition vaccine, not the RNA ones ... not ones with PEG or other fillers. Oxford one looks good as do 2 others likely approved in coming months.

 

Need for this in Australia given actual contact tracing, compliance on the main with masks and ... lack of stupidity being tolerated ... seems no immediate rush.

 

UK ... USA and a lot of others in serious trouble. The need outweighs the risks and caution I have raised along with others.

If say 50 people actually died via the vaccine the USA right now at 370k deaths, likely real number 500 k ... that to one side, the official estimate now for 1st April 2021 which I have whinged about for many months as being a joke and too low, is NOW .... closer to my own at 567,000- dead.

That's another 200,000 deaths in 10 weeks.

 

https://covid19.healthdata.org/united-state...s&tab=trend

 

So cost or risks even as I have raised an at worst number .... is tiny compared to benefits.

 

Of course, USA as just displayed has virtually zero chance of vaccination being taken up willingly by 80% or more people. Sadly this will be with us for some time the covid19 until either its captured and squashed, via lock-downs or masks and or vaccines being taken up so transmission is well under 1.

 

Time will tell.

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Yep ...

Personally waiting for the Oxford vaccine.

 

I note the EU just changed yet again its use of Remdesivir the Gillead drug. Veklury is what its called now.

 

An aside, Gillead announced overnight its results. USA about half of Covid patients get given this ... stuff. When you have 2.75 million infected a week and say 100,000 cycling in and out of hospital every few weeks with 135k in there, I suppose Gilleads results were no surprise. Increased sales.

 

 

A drug which has a massive question mark over it and EU ... well its rules for any use of it is onerous ... costs $115 USD per dose to make sells for $2,500 or so and well all research and studies paid for by govt is what it is.

 

Gilead is the one which sells the Prep AIDS drug in the USA for $12,000 a months which sells here for $100- ...

 

 

again it is what it is. Patent has elapsed on it in every country except the USA.

 

I note 2.75 million infected in the USA last 7 days and 23,000 deaths.

 

Not much if any media coverage.

 

Worst of the worst already mentioned Tennessee in the USA with 6.9 million population is about to hit 10% infected and still ... bars open ... and debating over masks.

 

Meanwhile market loves everything other than companies that makes money.

 

Well known Q an Non person who was the riches man for a day .... Elon Musk saw his shares fall ... they were only priced at 95 times 2021-22 sales.Its reasonable ?

 

Now they are merely priced at 89 times expected sales. Not profit, SALES.

 

Been there before and time and time again over the years.

 

Stay safe

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Meanwhile market loves everything other than companies that makes money.

 

Had to read that twice to make sure we're on the same page....

And yes we are.

These multiples being thrown around are insane. I own a nice, profitable, small business. Hard work, stressful, taxed to an inch of it's life: But I make a good living, with great cashflow, multiple years profit in the bank should the worst happen.... and it's worth??? Stuff all. Be lucky to get 3 years net profit, plus plant and equipment: Very lucky.

Yet businesses that are only one regulation from being shut down (eg after pay), or a david in a goliaths world (eg. tesla) are being pumped... and pumped... and pumped...

The one thing I've come to learn, is that it takes the market (ie people) far longer to accept the truth when they need to calculate it themselves... or what I'm saying is, this insanity is likely to go on for years... sickening.

I just feather my nest: At the end of the day, Ferrari's and Porsche's would be nice: But I only need enough to make a comfortable living, regardless of what happens: And in 5 or so years, anything might: but until then, I'll keep saving and investing in real stuff: The stuff people 'smarter' than me are turning their noses up at.

 

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The injection of cash into the US economy shows no abatement.

Biden's proposed 1.9 TRILLION package brings the total amount of cash support to over 5.2TRILLION.

Moody's rating agency , the same one that downgraded Victoria's credit rating to AA- a few months ago, sees this latest splurge as a good thing.

From sharescene's own research pages HERE

 

 

Credit rating group, Moody’s has given an upbeat and thumbs up approval for the Biden package.

 

In analysis released before the speech was delivered – but obviously based on an extensive briefing, Moody’s chief economist, Mark Zandi reckoned it will boost US growth this year to 5% or better, and the same in 2022.

 

“This (the Biden package) would bring total support since the pandemic hit to $US5.2 trillion, equal to an astounding 25% of GDP—approximately three times the fiscal support during the financial crisis, and substantially more than provided by any other country in the world. (Japan is second and Australia is third in the ranking of size of stimulus to GDP)

 

“With this additional boost, real GDP should be robust at just over 5% this year and the same next, bringing the economy back to full employment by early 2023.â€

 

He sees economic growth in the current first quarter of 2021 at 4%, rising to more than 5% for the year by year’s end.

 

“That is nearly a full year sooner than we had anticipated when assuming the Republicans would maintain control of the Senate and stymie the Biden administration’s efforts for additional fiscal support,†Zandi wrote on Thursday.

 

He also forecast that the US would return to full employment by the end of 2022 early 2023.

 

“With the economy projected to achieve full employment by early 2023, we expect the Fed to begin normalizing short-term rates by fall 2023. By then, inflation should be firmly above the Fed’s 2% target and inflation expectations even higher.

 

“It will take approximately three years for the Fed to increase the federal funds rate target to its 2.5% long-run equilibrium rate.â€

 

“Long-term rates will rise sooner as the Fed tapers its quantitative easing by early 2022, and bond investors anticipate a full-employment economy with higher inflation.

 

To paraphrase someone else, theres some heroic assumptions in that analysis.

The chances of the US returning to full employment by end of 2022, early 2023 seem more than a little optimistic.

With the latest BLS data showing 6.7%, and new jobless claims have been stuck above 700,000 for the past three months.

This compares with around 225,000 average before the virus hit.

The real unemployment rate according to shadow stats is closer to 7.3%.

the Fed in their annual report HERE has unemployment rates coming down to 5.0% in 2021. I guess if everyone got a lucrative position at the FED it might work.

But the biggest problem is that people in Government assume that once the virus is brought back to a level where no state has any restrictions, all will be well again and all those businesses will just up again.

Sorry guys, the playing field turned into a mine field.

Nobody knows how many of the closed small and medium businesses will open again,

And if people can get welfare instead of having to work, guess what will happen?

You only have to look at the huge amount of fresh produce that is not being harvested here in OZ to see the inevitable result.

 

Mick

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Yep,

Been around a long time and right now, the sector rotation in Australia is insane. Things go from a prudent value, to what is an I wish value in weeks.That of course is companies that make money.

 

Not a fan of the banks up here. Market seems to think that they go back to the old dividends and possibly buybacks in 2022. Not so sure this is correct.Flip-side is say Utilities whilst boring, they get smashed in favor of Banks and in favor of techs and so on.

 

Darling used to be the WOW and COL which I admit went way beyond my wildest dreams. I liked COL on the split below $12- at $16- it was getting expensive and now at $19= sort of insane.

 

Certainly some ... my love hate affair with FMG hating it pre GFC at $10- loving it at $2- and even sub $4- not so long ago, ts been a perfect ride for them.

Still cant work out if an at best 80% of say old banks dividends since they need to retain MORE for capital and growth and were paying out far too much in the past if say $1.50 dividend on a bank .... say at 6% with some risk in there .... so I suppose a $25- handle for the likes of ANZ and NAB is possible all be it fully priced.

 

Not sure we have finished with COVID longer term and the new strains likely to me to wreaking some serious havoc into 2021.

 

Liked the J+J vaccine news all be it not much detail and more on the Oxford vaccine which protected at 100% against severe COVID in the latest release of studies and .... much like Moderna and Pfizer CLAIMS .... a vaccine with a lot less side effect and old and tried and tested vector seems good to me. That both USA companies used pseudo science to come up with their over 90% numbers is pure political BS and the norm for the world in 2020/21.

 

Should be interesting times ahead and Biden if he actually taxes USA companies and removes the tax cuts for the rich .... and makes social security tax go to all income instead of stopping at $140k, well there will be squeals that should be heard even here.

 

Nothing to do with our market of course, the absurdity and obscenity the USA tax system has become has taken decades to produce.

 

Biden I think said he proposes to raise the USA minimum wage to $15- ..... which is a good thing overall. Such a mess USA is in 2021 I will only believe it when its passed and law, which sadly I suspect is unlikely given the state of their kleptocracy.

 

Only a few more sleeps and no more watching the news with dread every morning for the latest idiotic action. Safely can totally ignore the USA for the next 20 years as it goes much the way of the UK post 1918 into the irrelevant basket.

 

Have fun

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