Looks like someone pissed baby jesus off, the shares took an ass pounding today.

On the plus side the bottom might fall out of the housing market, so cheap 2 bedroom apartment in whoop whoop here I come.

flawed logic there. if anything people will sell their stocks and pump it all on to housing. buy now before its too late.

is it time infi?

flawed logic there. if anything people will sell their stocks and pump it all on to housing. buy now before its too late.

They'll sell their stocks while they're at a low value and then invest it in something else?! I'm not a stockmarketician, but shares are a long term thing, are they not? Surely you should just weather it out, or if anything, buy more shares while the market is lower

Yes shares are a long term thing, at least 10 years.

If you buy shares and expect consistent growth without losses on the way, you're kidding yourself.

its been happening for about 2 weeks now..

its a bloodshed

i have been in cash and am looking into opportunities, however the blood letting wont stop till the figures for the loan losses from some banks in US come out into mainstream media

also housing is about to die in the ass big time.. and the stockmarket will bounce back but hopefully not as strongly

like i said in another thread a few days ago buy bonds, AAA Aaa bonds no less

for the first time in about 4 years my entire watchlist has been red.. and the really bad part is in the last 2 weeks my entire watchlist has been red 5 times..

its really bad.. but at the same time its really good for money making if you know what your doing..

this exact same thing happened in 98

Yes shares are a long term thing, at least 10 years.

um, depends on the shares!

They are long term, but when you loose 10% of your money in a little over a week, people panic. Sure you can hold on to your shares, eternally optimistic, cause you know they will go up in the long term, or you can cut your losses now, move the money to something safer that still beats inflation and get back in the market once it's stabilised.

We had billions of dollars poor in to superannuation in the last week of the financial year. That's money our retiring australians need for their future, it will be moving to safer ground and as it does the market will take a further hammering.

This morning was just gamblers getting their margin calls. this afternoon investment institutions moved in and took the bargains. The next few days will be people moving to safer ground and the early birds from last week fund switches kicking in. You got 3/4 a mil in super, right now you are thinking high growth my arse - Get me to solid ground.. specially if your mrs is bitching at you saying 'everything will be ok next week hon' and it's not. it's worse. way worse. Today's knocked a couple of years worth of super payments off your savings or a star off your "retirement village".

if you dont know what your doing in the stockmarket you shouldnt be in it.. give your money to a managed fund

stockmarket is a longer term investment.. however you still need to manage your investments.. meaning keep your money in higher earning sectors or sectors where your comfortable in the gain/loss risk

also because the market is liquid you need to be able to act when global information will affect your assests. if you just let it sit in a handful of stocks then you deserve to lose

stock tip of the day buy BHP below 32.. when the markets recover the big boys will be pouring money into safe stocks and look for an exit around 38-39

They'll sell their stocks while they're at a low value and then invest it in something else?! I'm not a stockmarketician, but shares are a long term thing, are they not? Surely you should just weather it out, or if anything, buy more shares while the market is lower

sure you can think like that. or you can sell now, whilst its relatively high still. or you could 'ride out the storm' and hope to god its not a crash in proportion of 1987. one thing ive learnt from stocks is not to fall in love with them.... fundamentals and charts dont control market sentiment, if the big boys, the fund managers, hedge funds etc, when they need their $$ to pay off their exposure to the sub prime mortgage market in the states, 10% of the total market, theyre going to take what they can. it will spark a sell off that a little player will only lose in, the amount of which is what is going to vary.

All my stocks have been hit hard recently except JBHIFI, JB ftw.

JB you've done it again!

On July 2 I warned of an imminent stockmarket crash.

If only they had subscribed to my newsletter.

but shares are a long term thing, are they not?

that is a lovely sentiment but unfortunately no. the vast majority of investment is not done with cash but borrowings, otherwise known as margin lending. usually only 70% or so can be borrowed for blue chip stocks.

when the stockmarket falls like this the lenders require borrower to top up their equity, so there is no waiting it out. it's sell sell sell!

last edited by infi at 21:16:21 16/Aug/07

ermm glad I havn't got off my ass and done anything with my savings. Good ole ING Direct :)

But on another note, does anyone know of any good managed funds? I want to be getting into a managed fund soon. Hopefully that returns more than 6-7%pa!

it's a routine correction. s*** has been way too overpriced for a long time. too many dumb risks haven't been priced in (see sub-prime US market). besides even with the current falls most indexes are still up an absolute f***load compared to 1.5 years ago.

in conclusion, now is a great time to buy.

I imagine a few people might be facing margin calls.

I saw a finacial advisor and he was talking about margin lending against my shares. Glad I didn't now.

also imo, its a little more then a "routine correction". Its still just a correction (at the moment). But its a significant one. I say that because it bounced up and down a few times and has now done a bit of a dive.

ps. our stockmarket wasn't as overpriced as other markets always are.

this is definitely more than a market correction. expect the index to head below 5000...

is there like, a graph I can look at to see "the stock market" measured over say, the last 1,5,10,15,20 years?

^^^ Dunno if this helps

http://www.asx.com.au

I invested f***loads in anz managed funds. Dunno how hard this is gonna hit me ??

European markets are down, if Wall st does the same again overnight it's not a massive stretch to predict what will happen tomorrow.

trog: http://au.finance.yahoo.com/q/bc?s=%5EAORD&t=5y&l=on&z=m&q=l&c=

But on another note, does anyone know of any good managed funds? I want to be getting into a managed fund soon. Hopefully that returns more than 6-7%pa!

good boy matty

i cleaned up on a couple of managed funds (they paid for my house deposit and paid off my car)

back in the day colonial was the man, and i had a short term perpetual managed fund that did well for me too

was looking into starting up some more for general cash well being, but its probably better for me to put it into my super now we have the house up and running

dow opens at midnight aus time. can it get any more exciting??

get ready for a bumpy ride bois

also this is alot more then a correction..

there has been years of global financial mismanagement.. i was hoping they (US gov) could pull a magic rabbit out of there hat.. ond over the last few years they seemed like they pulled it off..

unfortunately the s*** is starting to seep out of the large barrel called the US economy and it can only spell gloom and doom for Aus..

take years of forcing the economy to grow (0% interest rates) stir in some massive lending, add a dash of a bull market, then lastly add inflation pressure and sit back and wait for it to explode

also alarm bells went off big time for me when the DOW went to 14k.. realistically even factoring in the current monetary cycle it should be around 11-12k tops

anyway for smart investors you can make a killing shorting some stocks or picking undervalued quality stocks that have there fundamentals intact and ride there coattails to financial freedom

personally i still believe in China.. therefore i believe in companies supplying China with the means to grow.. ie resources will continue to power on..

however all said and done the world cant ignore the US and a failing US economy.. maybe China needs to cool its heels for a bit and let US sort itself out..

like i said.. my current buy is AAA bonds

US opened gently down 0.7%. we'll see what happens overnight.

still going down

1.3

gold futures just dropped 5 points in a matter of seconds.. hedge funds are shorting gold.. US is in some big trouble.. alot of lenders are on the verge of bankruptcy and not telling anyone

i'll keep u posted till i go to bed

last edited by Superform at 00:34:56 17/Aug/07

DISCLAIMER I KNOW NOTHING ABOUT THE MARKET GENERALLY

I don't think this drop will last mostly because companies earnings have been rising steadly along with the market so if the companies fall too much there will be lots of value in them and they'll be snapped back up, that being said economic theory is by no means cut and dry so wtf knows what could happen short term.

thats the conundrum.. share prices are valued at there fair market value or a little more.. no big deal.. however theres about to be a big s*** dumped on the US lending community and the world will be caught in the downstream wash

look for high quality shares with strong outlooks and markets and get into them when they hit below there fair value based on there balance sheets

if you don't want the risk.. buy high yield AAA bonds.. sit on them for 12 months and then reassess

either way if our stuck in a housing loan atm look for a 3-5 year fixed term to pull you through the s***

you have been warned

weeeeeelll i have an inside source at one of the largest funds management companies in qld/aus (lol a family member) and he seems to think that it's not too serious. people are freaking out but the fundamentals for most aussie companies are still pretty tight. give it a few months and people will forget this happened.

unless you have invested into crazy aggressive funds like some of the macquarie ones which bought securitised sub prime asset streams this should only be a speed bump, albeit mebbe a large one.

ps. routine was probably the wrong word to use but this has been coming for a while.

But the big unknown is human emotion and the herd mentality. Even without a basis in the numbers, there's always the potential for panic to set in causing things to spiral out of control.

well I work for State Street - one of the largest, global custodians in the world (/end plug)

It's been mental, was in there 16 hours today (11:35pm here).

Good times, you should see the size of the trades going in/out in the EU - massive money.

YTD the deptartment I work in (transfer agency) has traded a net inflow of 500 billion USD - the EU market is massive.

A fair chunk of our IM's are based in the states, well at least have a head office there, lotsa crazy assed s*** going on, alot of hedge funds / alternative stragey funds plumeting!

Anywho, might get some sleep now for another exciting day tomorrow :p

End of August we are doing a inspecie deal worth 2b USD (this has nothing to do with the current market, it's been on the cards for the past 2-3months, though there is now talk of it not happening).

Good times!

last edited by HeardY at 08:40:43 17/Aug/07

Well the Dow only lost ~15 points (0.12%) after being down 300 points at one stage overnight. (Even despite some bad news from Countrywide Financial - $11.5 billion line of credit) However the FTSE 100 finished 4.1% down... so it'll be interesting to see which way the Asian markets go today.

PS most of those drop yesterday in the ASX was due to computer glich which causes the panic:

Share market plunge wipes $35bn

Dodgy database deadly for futures

Looked safe at the open this morning and now the slide has recommenced...

So.. .what should we do?!@#!@

I went to see a financial panther just before all this happened and he's like "oh, you don't need to worry, this is just minor fluctuations. I was literally about a day away from dumping all my money into a managed fund, and now I'm wondering if I should wait this out a little bit or just shutup and do it anyway.

I reckon you should wait it out for the next couple of weeks until it worked itself out. You've waited this long invest, why putting $ in when the market is jittery like this?.

But it's up to you.

just stay in cash! if the market has fallen by 14% over the last month and you're in cash, you're a helluva lot better off than the "investors".

seriously, it depends on your outlook, if it's your own cash (or super) you can effectively set and forget it. in 20 years time all these fluctuations and crashes will mean nothing.

if it's borrowed money i would be staying the hell out, till the index turns.

Hmm, maybe I should do a currency transfer while the AUD is bent over..

id be hanging loose for now troggles

as in wearing no underpants?

yay for having all my money in USD I just added 10% to my savings this week.

till the US goes down again lol?

Anyone who thinks currency is the way to make money, must like gambling.

or smoking crack

no one told me you can't do both...

In relation to the thread posted recently about the drop in the $Aus/US exchange rate, the following may provide some insight:

Primarily, the fall in $AU v. the $US can be compared to similar dramatic falls in the Japanese Yen v. $US as speculators try to undo Yen carry trades they have entered into.

What are yen carry trades?

Due to the extremely low (read 0%) interest rates available in Japan, some bright sparks figure they can borrow for example $100 mil $AU in Yen and zero interest and then invest it in Australian or US bonds for 6% yield approx. Seems like money for jam right?

But what happens when exchange rates start to get volatile and as these Yen carry traders seek to repay their Yen loans - they need to buy Yen on the open market. This fierce competition for Yen exacerbates the original problem of a strengthening Yen, which in turn accelerates the gentle stroll into a stampede.

In the food chain of currency speculation, Yen comes first, $US comes second and $AU comes last. The $AU strengthened due to our improving exports and now it has been obliterated by speculators who create no value in the Australian economy.

Our dollar dropping means we sell more local stuff and import less

Its a good thing unless you are travelling.

Anyone who thinks currency is the way to make money, must like gambling.

Haha you don't know how appropriate that is in relation to imitation :p

I'm completely into junior/mid-tier miner's and so I'm basically watching the price of gold/copper/zinc incredibly closely. Provided the US keeps spending money on s*** that needs metal and China keeps growing then the fundamentals for me are unchanged.

That said if I had to sell today I'd be down $13,000 (1/3 of portfolio) based on prices before the s*** hit the fan.

Just as well I don't have to sell today.

Denny, you should definitely sell today and buy a house. CANT YOU READ? ITS ALL OVER!

OH GOD WHY DIDN'T SOMEONE TELL ME

*weeps on the floor of his house*

Kent Brockman to Pundit: Would you say it's time to panic?

denny your right about the miners.. however in this volatility i would sinking my money into some of the bigger players like bhp rio etc.. the mid cap and low cap miners always get hit hard..

although theres some awesome bargains atm.. few weeks back i cashed up now i'm just about ready to enter again.. fun times

trog if you want somewhere to park your cash while you wait buy bonds

Superform, what was that stock you recommended months ago?
I wouldn't mind checking it out

FYI trog if interest rates continue to go up you will lose money on bonds. Also obes is on crack about the aussie dollar.

haha scoggex. that dude is crazy.

also, infi i think the scramble to buy US treasuries might of put some upward pressure on the $USD.

that too no doubt.

hahahah that vid is awesome

the AUD weakening also creates inflationary pressures, though rates are going up again anyway it's a matter of when not if. also obes you'll find the price elasticity of imports (i.e. the change in the propensity to import given a unit change in price) is usually inelastic, or < 1.

which means it probably won't lower imports too dramatically. but it is definately good for exports.

US fed has just cut rates by .5% enabling the debt fueled party to live a little longer.

the Fed made the rare move of cutting its largely symbolic discount rate in a bid to help restore faith in the badly shaken credit markets.

Although the Fed didn't cut its more closely tracked federal funds rate, which affects consumer loans, the nation's central bank did cut the discount rate - which affects banks and other lenders.

Link
Summary of that seems to be that it has had a calming effect, but expect further volatility.

lol Jim Cramer for president.

infi,

the reserve cut the discount rate by 0.5%. the federal reserve target rate is still the same.

stock tip of the day buy BHP below 32.. when the markets recover the big boys will be pouring money into safe stocks and look for an exit around 38-39

dont say i dont do things for u guys..

i cleaned up on this trade 32.34 buy sell 38.45 .. how bout you?

Nice work super.

post more stock tips please super. i want to scamper out of town with truckloads of money.

AGF, fell to about 1.21 on D day, its now 1.41 and no doubt going to hit 1.50 later next week...

seriously its NAV is about ~1.90 now and its trading at 1.41

GO CHINA!!!

edit: looks like it might hit 1.43 today! :P

last edited by Strange Rash at 15:22:36 31/Aug/07