# Time to take a punt on the stockmarkets?



## horusd (19 Aug 2011)

I've started buying again. Stocks are plummeting,and there is real value out there, particularly in some quality banking stocks (sic). What's the consensus? Time to dip one's toe into the shark-infested waters or not?


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## callybags (19 Aug 2011)

Make sure to fasten your seatbelt.


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## farmerette (19 Aug 2011)

horusd said:


> I've started buying again. Stocks are plummeting,and there is real value out there, particularly in some quality banking stocks (sic). What's the consensus? Time to dip one's toe into the shark-infested waters or not?


 
a week ago id have said yes but last thursday and friday + the early part of this week has been the shortest rebound in memory , its a very bad sign that we,ve hit the rocks so soon again , i wouldnt touch stocks for a while


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## ringledman (19 Aug 2011)

horusd said:


> I've started buying again. Stocks are plummeting,and there is real value out there, particularly in some quality banking stocks (sic). What's the consensus? Time to dip one's toe into the shark-infested waters or not?


 
There arent many 'quality' banking stocks. A few. But most are trash.

Defensives are where its at IMO. decentish valuations, cash rich, decentish yield, emerging market exposure.


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## monagt (19 Aug 2011)

banco santander in Brazil


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## camel (20 Aug 2011)

monagt said:


> banco santander in brazil



+1


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## horusd (20 Aug 2011)

Interesting and detailed report on the Irish and world economies from  Bloxham stockbrokers. They also review some Irish companies they see as good value. See [broken link removed] I know we don't discuss individual shares,but there is some good general analysis from this report. The report is called "Tin hats" which kinda sums up where we're at!


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## horusd (22 Aug 2011)

monagt said:


> banco santander in Brazil


 

Curious as to why Brazil?  Santander is Spanish and is  listed both in Madrid and on the NYSE. No FX risk would attach to shares bought in Euro. I would always prefer to buy shares listed in Euro if possible.


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## MichaelDes (22 Aug 2011)

horusd said:


> Curious as to why Brazil? Santander is Spanish and is listed both in Madrid and on the NYSE. No FX risk would attach to shares bought in Euro. I would always prefer to buy shares listed in Euro if possible.


 

Why would you invest at this critical juncture in a bank or in the markets? They are all mired with the trouble. In terms of Brazil this is definitely not a good time. All markets are heading south and in my opinion the Dow should probably hit 8000 to 8500 by year end.

America is heading for recession and commodity prices are going to slip. Brazil has so much invested in the commodity story (50% of its index) and the country is one of the most expensive of the emerging markets with inflation at 6.5%. Neither its banks nor government are anywhere near ahead of the curve.

Bottom line is that if America is going back down, possibly into a depression, then all leading markets will follow suit. No stock will buck the trend. Companies may look cheap but it’s the future earning to concentrate on and not present, and with the amount of trouble in America, Europe right now, it is not the right time to invest.

IMO stay in cash and wait for a better buying opportunity. This one is a false dawn.

Add/on – you may get a jump from QE3 if you are a short trader, but medium term this could do more harm than good and any positive repercussions will be short lived.

However, Obama has elections soon and QE3 is not popular with voters, as it’s a band aid to banks not citizens. If QE3 does not happen then the markets will react badly, but generally the Fed is damned if it does and damned if it does not. IMO this market is going down medium term.


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## farmerette (22 Aug 2011)

MichaelDes said:


> Why would you invest at this critical juncture in a bank or in the markets? They are all mired with the trouble. In terms of Brazil this is definitely not a good time. All markets are heading south and in my opinion the Dow should probably hit 8000 to 8500 by year end.
> 
> America is heading for recession and commodity prices are going to slip. Brazil has so much invested in the commodity story (50% of its index) and the country is one of the most expensive of the emerging markets with inflation at 6.5%. Neither its banks nor government are anywhere near ahead of the curve.
> 
> ...


 

do you see gold falling along with other commodities


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## horusd (24 Aug 2011)

MichaelDes said:


> Why would you invest at this critical juncture in a bank or in the markets? They are all mired with the trouble. In terms of Brazil this is definitely not a good time. All markets are heading south and in my opinion the Dow should probably hit 8000 to 8500 by year end.
> 
> America is heading for recession and commodity prices are going to slip. Brazil has so much invested in the commodity story (50% of its index) and the country is one of the most expensive of the emerging markets with inflation at 6.5%. Neither its banks nor government are anywhere near ahead of the curve.
> 
> ...


 
Without discussing individual shares, I believe there is good value in certain stocks at the moment. I never do short-term investments, and I only invest in companies I have researched and am happy will perform. I also tend to take into account dividend payments, and I diversify. This has proven to be a successful policy, even thro the financial crisis.


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## jonocon (24 Aug 2011)

I am thinking along the same lines as you horusd, pm me for a private chat about the markets.


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## horusd (24 Aug 2011)

jonocon said:


> I am thinking along the same lines as you horusd, pm me for a private chat about the markets.


 
A chat about the markets in general needn't be private jonocon. Many may have a interest in the topic and may want to contribute.


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## MyAdviser (29 Aug 2011)

Hi, hold off buying now as there is too much on edge investors and once the EU crisis hits the fan (and it will) then the US will go into recession and you could be looking at much better value in a years time (or their abouts). 2008 saw many ponts of great value and all proved a poor measure. Future earnings are pointing down and the markets have not factored in the above. QE3 may arrive but it won't work just like QE1 and QE2. Austerity is needed and that will not be good for growth and has not been factored into current prices. We could be looking at worse than Lehmans and that was 40% + down. There will be better times to buy.

Kind Regards

Michael Kiernan


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## BabyShambles (30 Aug 2011)

Are you sure now is the right time?  Might want to give it a bit more time first...


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## meadow (30 Aug 2011)

MyAdviser said:


> Hi, hold off buying now as there is too much on edge investors and once the EU crisis hits the fan (and it will) then the US will go into recession and you could be looking at much better value in a years time (or their abouts). 2008 saw many ponts of great value and all proved a poor measure. Future earnings are pointing down _and the markets have not factored in the above_. QE3 may arrive but it won't work just like QE1 and QE2. Austerity is needed and that will not be good for growth _and has not been factored into current prices_. We could be looking at worse than Lehmans and that was 40% + down. There will be better times to buy.



The above is quite interesting.

The conventional wisdom from some (fee based) advisors I have spoken to and also from some books on the topic I have read (a random walk down wall st) is that all currently known events are always priced into current stock prices. That being the reason why it is impossible to time the market.

Given that most of the factors you have described above are already widely known then why would these factors not already be priced in ? 

The examples I've seen given are that its a bit like claiming to know more than the thousands of highly paid financial analysts working for the major investment banks and pension funds as well as all the professional and amateur investors all round the world who comprise "the markets".

Its not like its any great secret that there is an impending EU crisis and further austerity measures will be required in most countries who have over borrowed.


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## MyAdviser (1 Sep 2011)

Meadow, no one has a crystal ball about the future and short term predictions on stock market moves usually come back to bite you. The idea that markets are efficient and that all info is factored in is not an absolute. It is not that the info is not known, it was market analysis that has pushed governments to "start" facing the reality of their situation. The question is what is done with that information. 

People are involved in stock markets and once that is the case the psychology of fear and greed matter. No one knows if there will be QE3 or if the US will go into recession. There are forces pushing in both directions and the outcome is not known. Maybe the Germans will swallow the Euro Bond pill and their court will decide that ECB was allowed to spend as much as it has - despite it being illegal. There are a lot of unknowns out there so are you sure that the "market" has worked it all out and has the correct prediction priced in? The reality is boom and bust so if markets were so efficient then these would be priced in. In the dot com boom we even had technology CEO’s going to press saying that their company was not worth investing in at the current market inflated prices – the market kept buying. 

The valuations are generally a little above or at fair value - so not over stated on historic levels and with August many are saying buy. Many said buy in 2008 and even at the end of 2007. It could take 10 years to get your capital back on those decisions. It is very important for long term returns to be worth the risk you need to buy at low values and it is my humble view that the headwinds are too much to the down side from these values to be confident that the long term has a good probability for positive returns. 

There could be great value in some stocks/shares but that is not my area. On an index basis or higher level asset allocation view I believe that there is too much risk to support a buy view.


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## meadow (2 Sep 2011)

Thanks for response Myadvisor, Interesting to hear the other side of the argument.


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