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Why go up?

Discussion in 'The Economy' started by Johny_come_lately, 5th Feb, 2011.

  1. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    I don't get it. Floods and now Cyclones. Our farming, sugar and fruit taken out. Rail and road infrastruture gone. Mines are smashed. :eek::eek:

    And the All Ords goes up! Why does this happen? :confused:



    Johny.
     
  2. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Is it because market tends to see what is ahead in next 6-12 months or the correction take too much time or bad things out into the market enough? Since October 2009, Australia economy is the best in Western World, but our market is one of the worst in this world after GFC. All of expected bad events seem out of their box to hit Australia economy but the sellers have sold what they would like to sell. In another words, all of them have been put into the price consideration.

    The flood and cyclone are bad and just make some big troubles for Australia but it is still in very good shape. No one worry about the flood and cyclone more than China's tip points and US depression. Australia is good enough to sustain the pressure from these natural disasters. A nation is like an individual. Each of us could have a lot of problems but if we could deal with the internal and external matter wisely everything should be fine generally. Nature disasters could be trigger point to crash a system but in Australia it seems not the case.

    If we see the market in long term, the historical and future perspective, Australia stock market should do better even it needs the market sentiment turn to be much normal, which is a hardest task to do. It is just a time problem when XAO could be 5,000 or more not a probable problem. It would be more than 5,000. Do you get the discount for your $1 and good enough cash reserve to let market to struggle in the correction channel?

    XAO could be more than 5,000 at anytime in the next 1-2 years. What's the direct reasons? Who really know? I would not be surprised it shoots up over more than 5,000.
     
  3. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    What are the most important to your profit?

    After GFC, most of market players overestimate the probability of a conjunction of bad economic events around the world. If a building is at the threshold conditions to crash, a hair could get enough force to crash it. In the market once it reaches to the tip point, anything could crash it. All of us should know it but in the market we could not use this concept.

    This year Australia economy is hit by flood and cyclone. Too many of market players wonder why XAO could be moving toward 5,000, which is understandable but overestimate their effects. GFC, political incapability of the government, the mining tax, the deficit crises around the world, and the natural disasters, have been considered by the market for too long(since Oct 2009).

    It is critical to get a full picture about the economy but for profit in the market we need to distinct the events for the probability of their conjunction or disjunction to the price of our dirty-cheap fishes or swans in our hands.

    More thought in wdongli - Member Blogs
     
  4. fundies

    fundies Member

    Joined:
    28th May, 2010
    Posts:
    13
    Location:
    Sydney
    Well, it aint going up now Johnny !!!!!!!!!!!!!!!!!!!!!!!



    A little bit of unrest in the Arab world is all it took, ( on top of PIIGS, QE, Austerity etc etc. ). All ords down around 4% in the last couple of weeks. Where will it stop ?
     
  5. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    Long Term Strategy

    Who knows where the All Ords will be in 2-3-4-5 years. I still believe that it will be up. Don't know how much but if you, like me, have just sold 2 houses and are heavily in cash, do I do a Term deposit and get 7% or do I dollar cost average in STW, XAO.........

    50-50 for me I think. Dollar cost average the STW every month and try not to look at the market.

    Slowly and steady.
     
  6. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,396
    Location:
    NSW
    "Term deposit and get 7% or do I dollar cost average in STW"

    Hmmmm.... I would go for 7% (short/mid term)...if I were you !!:p:D