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Bull or Bear, what are you?

Discussion in 'The Economy' started by Young Gun, 11th Nov, 2008.

  1. Young Gun

    Young Gun Guest

    I’m a positive kind of guy and always optimistic when it comes to investing so I class myself as a bull (although it’s hard to maintain this stance in the current market). I see good entry points for new investors and chances to add to quality holdings for existing investors.

    This is “the correction we had to have”, as its highlighted the weaknesses in global financial markets and will hopefully provide the framework to provide more sustainable growth into the future.

    I generally think being a bear is the easiest position to take….

    You can gloat when your right( I told you so! I told you so!), if you keep saying it long enough you’ll eventually be proven right (although it may take several years) and everybody is happy when you are wrong!
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm a short term bear, long term bull.

    I think things are going to get quite a bit worse over the next year or so, but the cycle will keep on as it always does - and it will improve in time.

    The key I think is to keep an eye out for the "next big thing". Someone is going to make a lot of money over the next few years - I think there will be a lot of opportunity if you keep your eyes open and pay attention.
     
  3. Chomp

    Chomp Well-Known Member

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    Would the "next big thing" have anything to do with environmental issues such as carbon trading or am I way off?
     
  4. Chris C

    Chris C Well-Known Member

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    I really don't know what I am at the moment, I would say I'm a bullish bear, as in I'm very inclined to rejoin the market though logic is suggesting I stay out for another month or two.

    What do you mean by "things" are you referring to the stockmarket - ie you see big falls coming in the not to distanct future?

    Or do you see the economies of the world worsening over the next year - in which case such worsening may have already been factored into the market...?

    I get the impression that the bull vs bear sentiment debate largely hinges on whether you think this recovery is going to be short or long. I probably tend to lean more on the long side myself.
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Essentially the economy is slowing very rapidly - a lot of companies are beginning to lay off staff (which will slow things down even more), governments have far less money to spend than previously and will likely turn to debt to fund critical infrastructure and other spending ... and ours is one of the better economies out there, so not much help will come from exports.

    Short term I think this will continue to have a negative impact on the stock markets - but history has shown that the markets tend to lead the economy out of a recession or downturn, so I have no doubt the markets will start to recover sooner rather than later - the question is how long is "sooner" going to be (another 6-12 months perhaps ?).

    For property, I am cautiously optimistic ... I think short term we can expect some minor price drops (perhaps up to 5 - 10%) across the board while people continue to avoid decisions due to uncertainty - and perhaps some isolated larger drops in specific markets. I think that rapidly falling interest rates will eventually set a bottom on the property market.

    The big question will be how much building activity occurs in the short term - if we don't get much, then property will probably stay pretty bouyant, but if we see a sudden building frenzy brought about by low interest rates and government interference (eg massive tax breaks), then I think the property market may well stay stagnant for a while - until rental yields are high enough to encourage more renters to buy (there is a tipping point based on affordability) ... at which point we will start to see an easing of rental demand and an increase in property prices (not a boom).

    I don't know where the next boom will come from - I don't think we will see more strength in commodities for a while, nor in real estate, and I'm sceptical about IT or Biotech getting any real traction. The sharemarket in general will be flat for the next couple of years I think (modest growth at best).

    I do think that green-focussed industries may well be the next boom area - but like the "biotech" boom we're still waiting for from earlier this decade ... I'm not sure if it will be widespread, or just isolated to a few niche players?
     
  6. try anything once

    try anything once Well-Known Member

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    I reckon we've seen the bottom, the ASX 200 will reach 4,600 some time in the next 12 months, but it will then trade sideways for 2-4 years in the range 4000 - 5000.
     
  7. qqwertyuiop2000

    qqwertyuiop2000 Member

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    try anything once- If we go sideways shouldnt we be building a position for the next 5-10 years then?
     
  8. Billv

    Billv Getting there

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    I think we should, I plan to pick stocks of companies offering good value and will progressively buy more of them
     
  9. Chris C

    Chris C Well-Known Member

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    I'm backing we haven't seen the bottom yet and that the bottom is definitely below 3500.

    Though if I was to crack out my murky crystal ball I have to say that I'm faily optimistic that we won't see a long drawn out recession/recovery. I think most of the world's major economies will bounce back, and bounce back well in the third and fourth quarters of next year with the exception of the US - I think they have some reshuffling to do.

    So with that said, I see a continued downward slide on the stock market for the next 6 - 12 weeks, with the market finding a bottom somewhere between 3250 - 3500 sometime in December, January or February, with some good gains on the stockmarket in from March onwards in in what will be initial a slow volitile recovery, before heating up in the later parts of 2009 and continuing on through 2010. I'm also backing that we'll be above 5750 before the end of 2010.

    How's that for some random speculation - now all I have to do is just sit and wait...

    :cool:

    Disclaimer: The above FREE advice can be acted upon considering it is of an ill informed, inexperienced, 23 year old, whose investing advice is worth about as much as you paid to read it, nothing!

    :D

    Interesting perspective.

    I must admit I'm very torn on what to think about property, one side says prices need to come down, the other side says, the biggest difference between today and 12 months ago is massive interest cuts and higher rental yeilds. Makes it hard for me to forsee massive drops in property prices.

    Ahhhh... if only I could see the future - I'd be killing it!

    :p
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    One Sydney's lower north shore where I live there have recently been quite a few houses come onto the market in my suburb - the cheapest being advertised in the mid to high $900K range, and the most expensive somewhere north of $2m.

    12 months ago every house that came on the market was selling within a week of listing and we almost never had auctions - houses always sold prior to the auction date. This includes new records being set around $2.7m.

    Recently houses have largely stopped selling - mostly due to people holding off on decision making until there is more certainty about the state of the economy etc. Property is now being passed in at auction and there is simply very little interest in buying.

    In a market like this, I think it's completely reasonable to see prices come back 10% or more - especially when prices had risen by 20% in some areas over the past year or so. It's going to depend on how desperate the vendors are (and I'm sure some will be getting desperate). I haven't spoken to the agents much, so I'm not sure if they are actually getting offers and how close they are to selling.

    The house across the road from us which passed in at auction on the weekend is now asking under $1.6m, which is substantially lower than I expected it to sell for based on prices in the past year.

    I'm not surprised at all this - it's just a supply and demand thing ... demand has dried up because people are too scared to commit to anything right now - the stockmarket and economic forecasts have them spooked, and it will take a while for that to settle down.

    Naturally you'll see a completely different scenario in other areas (especially interstate) - it really is impossible to generalise on a nationwide basis.
     
  11. qqwertyuiop2000

    qqwertyuiop2000 Member

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    BV-

    Yeah im doing the same thing im a fan of the EMH and dollar cost averaging so ill continue to build stakes over the next 6-12 months, the yields are enough to cover any expenes anyway so there it is. No risk No reward
     
  12. Chris C

    Chris C Well-Known Member

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    As you mentioned earlier there will most likely be a short term correction in property pirces, but I think that unless we can get a correction that takes 15 - 25% off property prices to bring them back to longer term trends that property may well underperform (0 - 5% growth) over the next 2 - 3 years.

    Whereas I think the market with its greater liquidity tends to fully correct and as such I expect that in 12 months time when things are looking up again, it will be back to business as usual.

    So I tend to be of the belief that in the short term property is safer as I don't see the property market correcting more than 10%, where as I think the stockmarket could realistically fall another 15 - 20%. Yet in 12 months time I think the stockmarket will once again be seeing 10 - 15% growth pa.
     
  13. Nigel Ward

    Nigel Ward Team InvestEd

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    So you surely you're going to lob in a cheeky $1.4m offer? ;):D

    Cheers
    N.
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Nope - we didn't like the place.