Re-Entering the market (finally!)

[blazespinnaker]

Re: Re-Entering the market (finally!)

And for anyone here who thinks they know how far the S&P is going to drop, why aren't you pounding 100% of your cash into an ultra short?

[Guest]

Mobius (of Templeton) - No U.S. Recession, Global Stocks Still Hot

Mobius: No U.S. Recession, Global Stocks Still Hot

Mark Mobius, the international financer who oversees $45 billion for the Templeton Asset Management, said this week that he sees no U.S. recession ahead.

If one does occur, he added, emerging markets "normally” decline by up to 20 percent, Yet that kind of decline has already occurred, so he sees no big additional drops for international investors.

"It’s not in a recession as far as we can see, and we don’t expect recession, because the Fed is continuing to pump money into the system,” he told Bloomberg. "Interest rates are going down, so we don’t expect a recession.” Although he doubts one is coming, Mobius points out that the effect of a U.S. contraction would certainly affect the rest of the world, depending largely on the depth of a recession.

Zero growth, for instance, would absolutely affect not only emerging markets but developed economies as well, Mobius said. Nevertheless, most of the pain that would come from a potential slowdown already has been priced in to global stocks.

"We don’t think there’s going to be much of a decline from here,” Mobius said. "Usually these corrections are about 20 percent, and of course we’ve seen that in the last few years, 10 percent, 15 percent, 20 percent declines are quite normal, nothing to get worried about.” As for investing abroad, Mobius says he’s investing now, and investing strongly in Brazil, his No. 1 pick among emerging markets.

"Right now Brazil is right up there at the top of the list, followed by India, China of course … Turkey, South Africa and Russia. Those are the main markets now,” he said. In Brazil, he is bullish on the economy as a whole, investing across the board, specifically in mining and raw materials stocks. The rising price of iron ore from Chinese demand has resulted in huge, professionally run mining companies.

"We’re not avoiding any sector, because we’re finding opportunities in every sector of the economy,” Mobius said. "The Brazil economy is very healthy right now, the amount of money in the hands of consumers is very high, and the export business is doing very well,” he said.

POSTSCRIPT: This is not my opinion - I actually have no opinion. I posted it here for general interest only. However it's possibly worth noting further - if an analyst posts a buy recommendation on a sector, e.g. China stocks - the fact that a 20% crash ensues in that index directly afterwards is in fact to be considered a "minor factor". Why? Because the index in question has risen hundreds of percent - a 20% "crash" in such an index - or even a 50% "crash", constitutes a correction for such a strong index. His recommendation suggests these size crashes become merely noise to those investors willing to hang on for the next 200% rise. It takes a strong stomach, but few would argue that the China stock exchanges have 200% further upside within the next five years. That is "investing" as opposed to "momentum chasing".

_________________

[touchring]

Re: Mobius (of Templeton) - No U.S. Recession, Global Stocks Still Hot

This guy's a joker, he was calling people to invest in chinese stocks around October, Chinese stocks almost immediately collapsed after that, most bluechips are at least 20% below September highs.

When he says buy, it is time to sell. ;)

Mobius: No U.S. Recession, Global Stocks Still Hot

[Guest]

Re: Re-Entering the market (finally!)

Well, I'm exiting my all cash position and getting back in the market. ...

http://www.businesscycle.com/news/press/1403/

Look at the IBES valuation - does the current valuation readily reflect the START of a massive new bear downleg? Conversely, does a 50% up-move from here look really unlikely?

There seems a better than even chance the real bear market is NOT starting on this downslide - this washout could serve to reinvigorate the markets, and may instead provide a massive, 50% bounce back up.

After this ugliness at the start of 2008, and the ugliness in the last quarter of 2007, couldn't this next massive bounce cause a good number of the confirmed bears to "throw in the towel", so at the end of that 50% up-move, many would once again be participants?

That way the market regains maximum participation for the start of the real secular bear market resumption - so the maximum number of participants can lose their shirts then?

Blazespinnaker's contrarian intuition seems potentially spot on. The only question being - after this beautiful bit of timing - does he choose then to bail out after this potential 50% run-up and flip back to bear - shortly after "the many today-bears" have thrown in the towel (in late 2008?) and rejoined the market?

It would seem we have a real, large bear market scheduled at some point, therefore doubling down after this strong bounce for "the ten year haul" would wipe out some very sizeable gains to be made if this market turns around in the next weeks.

IBES RECORD UNDERVALUATION 2008 - RECORD RALLY AHEAD.jpg

[Tulpen]

Re: Re-Entering the market (finally!)

I think that analysts still have a way to positive earnings outlook for the next 12 months, I expect this to come down hard, which will cause the down leg at the end of the chart to come back up.

[Captain3D]

Re: Re-Entering the market (finally!)

What about Value Cost Averaging back in using www.foliofn.com.

Thats what I am just starting...phil

http://csinvestor.com/investing-guid...-cost-average/

[Guest]

Re: Re-Entering the market (finally!)

Blazespinnaker -

Just to complicate decisions and strategies a little further, here is a cautionary viewpoint, about piling back into the market . "Cautionary" would appear an understatement, from this technical analyst.

___________

US Stock Markets Dome Top Signals Tragic End of the Bull Market -- Clive Maund -

FULL ARTICLE HERE: http://www.marketoracle.co.uk/Article3414.html

The large top area now forming in the main US stockmarket indices is now approaching completion. Given the horrifying fundamentals it is a wonder that they haven't broken down and gone into freefall already. ...



... clear that once the lower uptrend channel line fails, and the support in the 1360 - 1400 area is breached, the risk of a devastating plunge will increase substantially. Would such a plunge take down Precious Metals stocks with it? - no, because the circumstances causing it will result in gold and silver going parabolic - we have already seen gold and PM stocks decouple from the broad stockmarket during the past week or two, and they should now stay decoupled. Note that there is one exceptional circumstance in which the US stockmarkets could rally nominally, but still be falling heavily in real terms, and that is where the money supply is expanding at a very rapid rate, and inflation is rampant ....

... If you are impressed by the performance of US stocks generally since 2003, then you are probably suffering from delusion, a condition which fortunately can be cured almost instantly by glancing at the 10-year chart for the $&P500 index measured in Euros ...

... The conclusion from all of this should be obvious - apart from some isolated pockets of strength you should be out of the broad stockmarket by now, and any remaining holdings should be sold, especially on any short-term rallies, which can also be shorted. A high weighting of funds should be deployed in commodities generally and especially in the Precious Metals sector. Things are likely to get really rough for the US economy in 2008, which promises to be the worst year for the US since The Great Depression.

Clive Maund,
CliveMaund.com

[BiscayneSunrise]

Re: Re-Entering the market (finally!)

Lukester,

a couple of observations about that chart:

-If it we a chart of an individual stock,it would be a definite sell. The first correction was on very heavy volume with the ensuing rally having tepid volume. The second correction also saw heavy volume.

-If you turn the chart upside down, It looks like a cup base.

At this point, if it were a base you would expect a handle to form ( a correction) followed by a strong climb upwards. Turn the chart right side up again and the handle correction turns into a rally followed by a steep decline.

About 10 days ago, Investors Business Daily, called for its readers to go to an all cash position. (Two weeks later than iTulip, thank you very much Eric)

This potential upcoming rally would be a last chance to sell any non PM related equities.

[WDCRob]

Re: Re-Entering the market (finally!)

Looks like you'll have another buying opportunity sooner rather than later Blaze:

LONDON (MarketWatch) -- If futures contracts traded on a day when U.S. stocks weren't even due to open are anything near accurate, then markets will be in for a major decline on Tuesday, with concerns about bond insurers and the health of financial institutions dragging markets lower.

March contracts on the Dow Jones Industrial Average traded 353 points lower to 11,753.

The S&P 500 futures fell 55 points to 1,270.10 and the Nasdaq 100 futures lost 72.25 points to 1,777.25.