Will the ASX200 hit 5000?

Discussion in 'Sharemarket News & Market Analysis' started by Simon Hampel, 13th Jun, 2008.

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  1. Tropo

    Tropo Well-Known Member

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    “Is now a good time to get in on the ground floor and hold for 10 years on the assumption that we are nearing ground floor and whilst the next year or 2 may be flat, there will be an inevitable new growth phase??”

    Rosewaterwrx

    Who told you that we are on the ground floor?
    There is still a cellar....:eek:
    If you are not making money from almost day one you are going backwards.
    Market may stay low longer, than you can stay liquid.
    There may be more blood in the street yet.....;)
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Theoretically it could go another 5000 points lower. Extremely unlikely.
    Though saying that back in 1980 when the All Ordinaries started it was indexed at 500 points. Which means over 28 years it's grown 1000%.

    Re the cellar, some places even have multi-storey carparks underneath!!!
    :(

    Cheers,

    Dan
     
  3. rosewaterwrx

    rosewaterwrx Member

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    Hmmm well seems my best option at the moment may well be to use my excess income to renovate my house /pay alittle extra off the motgage and bide my time regarding the share market.

    Sim- I cant say Id have the cash / income or the built up portfolio to be at ease with losing a great deal. Although losing short term doesnt phase me at all if in the long term it makes sense.

    Perhaps Being naieve I dont really realise what dire areas the worlds economy is heading into. I have only become interested in finance/investing in the last year or so......so from that extremely limited perspective, I felt like.....wow the share market has dipped so much that in the long term things must be close to undervalued in a long term perspective. Great lets make money.

    I do believe that the world is in a fascinating time of transiton and that if handled correctly a new era will open up within the next few years. The mess we are currently in is due to the greed of individuals and business and the short term thinking of business and governments ......a lesson people will never learn.

    How money was leant to people who camt afford it on the assumption that the blue skies never end and that so little effort has been put into alternate fuels defies belief.

    I absolutely dont expect we are at the ground floor, but it sounds like a few of you guys seriously believe the ASX may still drop signifigantly???

    Its always a little hard who to believe / trust....it seems that almost everyones opinion is redically different....and from a lamens / new investors, point of view its extremely confusing.

    I guess if its was easier we'd all b millionaires though.
     
  4. Nodrog

    Nodrog Well-Known Member

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    With major banks offering around 10% grossed up yield and although earnings are under threat they are potentially more likely to maintain their dividend than cut it. So if you are sourcing your borrowings on the cheaper side against IPs then the shares are costing you bugger all if anything to hold. But if dividends are cut and interest rates went up a couple more times then you may be slightly or modestly negatively geared. However it's certainly not the time to be agressive with borrowings in my humble opinion.

    Fortunately I was fairly well cashed up waiting for an opportunity in the market like exists now but I'm also using some very conservative borrowings. There is just so much great value out there now (and probably even a lot more so going forward) that I'm continuing to average into the market and will keep doing so for some time yet.

    But who knows this may be the end of civilization as we know it and a bunker in the back yard, an AK-47 and gold is the way to go:D

    However if things continue to get worse but you can hold your nerve, stick to your plan whilst standing in the fires of hell then fear and greed will have been conquered and young Jedi the force will be with you forever:cool::cool: Or maybe end up broke:eek:

    Of course none of this is advice and I'm probably wrong as I'm sure Tropo will point out:D.

    I consider myself a long term, buy and hold investor and hence traders (and more sensible people:D) will no doubt have opposite views to mine.

    Cheers - Gordon
     
    Last edited by a moderator: 8th Jul, 2008
  5. Tropo

    Tropo Well-Known Member

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    But who knows this may be the end of civilization as we know it and a bunker in the back yard, an AK-47 and gold is the way to go

    Didn’t you forget a pocket submarine?:p

    Of course none of this is advice and I'm probably wrong as I'm sure Tropo will point out.

    Do not worry about me. I am still in the pub ’shorting’ few beers.:D
     
  6. Nodrog

    Nodrog Well-Known Member

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    I'm currently "long" on rum:D:D:cool::cool::cool::cool:

    Cheers - Gordon
     
  7. willy1111

    willy1111 Well-Known Member

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    Has anyone seen a chart of the Nikkei (Japan equivalent of our all ords) from 1990 to 2003 :eek:.

    Interesting. Markets can fall a long way.

    Sorry don't know how to post charts, if anyone would be kind enough to upload one :confused:
     
  8. Tropo

    Tropo Well-Known Member

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    Nikkei weekly:
     

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  9. rosewaterwrx

    rosewaterwrx Member

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    Wow....and I do mean WOW.


    I think I may just store tins of spaghetti in a bunker after seeing that Japanese chart.

    plus a few hundred bottles of scotch.

    Thanks for that chart.

    I had no idea that Japans finances had been in that state, I knew they had a decline with a few false starts but my god.....they are far below 10 years ago.
     
  10. BillV

    BillV Well-Known Member

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    I don't think the ASX will have such a large dip although you never know with all the international problems we are facing. Anyway, I think Japanese companies have their own individualities.

    Our companies are quite special in that there is very little employee protection (if any), our banks enjoy a nice oligopoly, our resource companies are exchanging dirt for gold, and our engineering/construction companies are getting ready for the biggest infrastructure spending ever.

    When this turmoil is over I would be mad not to buy Oz stocks.

    Cheers
     
  11. crc_error

    crc_error The Rule of 72

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    I have said this before, and I'll say it again.. my prediction is we will see the all ords at 4000.. when it hits 4000, then I suggest to re-enter the market.. this will complete the 50% correction...

    cash is king at present! with 8% PA cash interest, why bother risking money in the stock market!

    I'm out now, only hold gold,, rest is in cash.. should have done it earlier
     

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  12. BillV

    BillV Well-Known Member

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    CRC

    The ASX might not drop that much
    Our current drops are due to the US influence and the US should be turning around near the end of the year when they change president.

    The Iran question mark should be over by then as well
    because GeorgeB will not miss out on the opportunity to solve the problem
    before he leaves the white house.
    His successor will simply have to put out the fire...:D

    btw, where do you keep your gold?
    I hope it's somewhere safe.

    cheers
     
  13. Tropo

    Tropo Well-Known Member

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    BV,

    Nothing is impossible in the market !!! :cool:
     
  14. Nodrog

    Nodrog Well-Known Member

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    Phew, another morning of vigorous shopping:D Try as I may I just can't resist. So okay I'm an addict:rolleyes: Is there a "Shareaholic's Anonymous" group around:eek:

    Cheers -Gordon
     
    Last edited by a moderator: 11th Jul, 2008
  15. dmesh87

    dmesh87 Member

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    Crc_error, regarding your position on re-entering the market at 4000. What do you base your prediction on that the market will need to drop to 4000 until the correction is completed? I've listened to many analysts and heard a least half a dozen different views on how the global economy will weather this storm and differing views on american growth picking up in the last quarter of this year or 2nd quarter of next year and the fact that most of them make different predictions leads me to believe that no one really knows. In this climate it seems hard to pick near a point at which the bottom will be reached.

    Part of the problem seems that no one can predict with accuracy the amount of write downs as a result of sub-prime losses. This problem may be because its hard for anyone to predict with accuracy the amount of people that will not be able to pay back their mortgages in the U.S and would have to foreclose.

    Since the Financial sector in Australia reacts strongly to the Financial sectors in the U.S (for what reasons i have no idea) their problems become our problems, which is why the downturn in the Australian stock market has been worn largely by the financials sector, correlating with the financials sector in the U.S. Also sectors which support financials such as the I.T sector have also worn much of the brunt.

    As well as this the Property Trusts have also been largely the cause of the market now reaching where it has, this is presumably due to the increase of interest rates by the RBA. Or alternatively their exposure to sub-prime related losses in the U.S.

    Sectors such as consumer discretionary spending, Materials and Energy have increased over this downturn period, probably due to Asian demand and the extremely low unemployment caused by the mining boom leading to an increase in disposable income.

    For the market to reach those lows I think some new sectors other then financials and property will have to start showing more significant downturn, unless sub-prime losses reach new levels leading to more massive drops in financials. The first will most likely be retailers in the consumer discretionary spending as the RBA will keep rising interest rates until people stop spending and the combined effects with high Oil prices will also reduce discretionary spending. These stocks will be the first hit as people curb their spending further. Materials and Energy will only go down if new commodity suppliers come in or demand from Asia slows, and demand does not look like slowing anytime soon and if it does then definately look for the 20% drop.

    I can see losses in the near future due to a decrease in discretionary spending caused by interest rates and Oil prices combined with some worry and panic, but in long term im not quite sure what sectors will shoulder the burden of a further 20% loss, unless sub prime losses increase to massive proportions or Asian demand slows down hurting resource sectors.
     
  16. Glebe

    Glebe Well-Known Member

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    I've said it before, and I'll say it again (but you never seem to accept it) - that graph you continually post is flawed because it doesn't have an exponential (compounding) y-axis. Have a think about it.
     
  17. samaka

    samaka Well-Known Member

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    What's your opinion on where the floor is Glebe?
     
  18. Chris C

    Chris C Well-Known Member

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    Not that I'm a chartist/technical analyst (or whatever you want to call them) but having a exponential y axis makes sense to me when using straight line growth rates on data spanning over two decades... but like I said, I don't know much/anything about technical analysis - I'm more of a fundamentalist.

    :cool:
     
  19. Tropo

    Tropo Well-Known Member

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  20. Andrew Allen

    Andrew Allen Well-Known Member Business Member

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    Also you need a line that connects two data points otherwise it's going to be scale variant.