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     hilarius
Member
Username: hilarius
Post Number: 2599
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Friday, August 03, 2007 - 07:17 am: |  
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Good Morning
I do not dispute that sentiment and fundamentals impact on each other
I also suggest that the changes can differ in degree
I would like to ask Incredible Charts members to apply their skill to measuring each
It seems to me that at the end of June the impact of American mortgages had not impacted significantly either on opinion or fundamentals
So I propose starting index values at end June of 100 for Fundamentals for 100 for Sentiment (Fear or Greed)
My personal July values are 99% for Australian economic fundamentals and 95% for the Australian share market
fear factor
Please contribute your own June and July values
I will construct an Optimists Index and a Pessimistic Index from the results
If you are keen you might like to add an end August forecast 
My August forecast is Fundamentals 101% Sentiment 98%
Please, members of the jury, please don't let my figures influence your thinking
Your own thoughts will be followed with great interest at the Friary
Hilarius
PS Anyone who would like to assess Australia and America separately will receive a gold star
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2607
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 04, 2007 - 11:40 am: |
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NEWS BULLETIN FROM THE FRIARY ... FEAR AND FUNDAMENTAL FUTURES
The Hilarius Fear Index has fallen to 88
The Fundamentals Index has risen to 102
Fundamentals is becoming a mixed bag with a good reporting season possibly fading into a flat or worse scenario for fiscal 2008
Does everyone understand what the two indices are measuring?
The Fear index is intended to measure the extent to which stocks are being undervalued due to poor sentiment
The Fundamentals index is intended to measure improvements or deterioration in the real world
I would REALLY WELCOME others offering their own F & F index values
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2608
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 04, 2007 - 11:41 am: |
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The starting point for F & F Index Values is :-
End June = 100 for Fear (No fear or exuberance)
End July = 100 for Fundamentals
If you believe there was UNWARRANTED exuberance at the end of June compared to true value you should start with a higher than 100 Exuberance Value
If you believe fear had already started during June you could start with a number under 100 as your Fear Value
The Fundamentals Index starts at 100 regardless ... it is the base point for all future measurement of fundamentals
All clear ???
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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msparks
Member
Username: msparks
Post Number: 1040
Registered: 10-2004
Rating: N/A
Votes: 0
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| | Saturday, August 04, 2007 - 01:08 pm: |
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Just to help you out Hilarius
Fear and Fundamentals is a topic that is not very interesting when the O Coolest One has not made any money after trading for 2 years.
He must have been a BOL buyer i reckon.
Ha
By the way,fundamentals will rule sentiment any day of the week including Sunday.
But to get the "real" fundamental value you have to look at the chart unless you are the accountants manager of the company you are investing in and have a good understanding or the personnel, customers, performance KPI's,and the culture of the people in the business.
Only people can make a business great.
Fundamentals means cash flowing into the business, sentiment may be negative but if the cash keeps piling up the greedy little people will keep buying a part of the business so they can get their grubby little hands on the ccc ash.
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hilarius
Member
Username: hilarius
Post Number: 2614
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Sunday, August 05, 2007 - 06:25 pm: |
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Good Evening
You can trade the Hilarius Fear and Fundamental Futures 24 hours a day, 7 days a week
THESE ARE PERSONAL OPINIONS ONLY ... DO YOUR OWN RESEARCH
FEAR
Jun = 100
Jul = 95
Aug = 88
Sep = 85
Oct = 82
Nov = 78
Dec = 83
FUNDAMENTALS
Jun = 100
Jul = 99
Aug = 102
Sep = 103
Oct = 102
Nov = 98
Dec = 97
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2615
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Sunday, August 05, 2007 - 06:31 pm: |
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I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2628
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Tuesday, August 07, 2007 - 07:17 pm: |
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The market continues to steer a course between fundamental optimism and "worst fears"
Could the worst be worse than the worst currently feared?
Time will tell
Neither the fundamentals nor the fear "index" should be regarded as anything other than gut feel speculation
Please do your own diligence and don't rely on the depicted speculative numbers that may bear no relation to anything
Would anyone like to provide their own "futures" ?
They would provide an interesting comparison
The green bars depict a guesstimate of fundamentals and the red bars a guesstimate of a sentiment and fear driven outcome
Neither may be true or soundly based ... and I urge you to form your own independent view. The depicted guesses may be hopelessly unreliable
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2637
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Thursday, August 09, 2007 - 08:10 am: |
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The ASX appeared to take in its stride an interest rate rise and the prospect of another
This indicates maturity and financial discipline by those with funds to invest
There may yet be a larger slide in prices caused by fears spreading from beyond our shores
Hopefully those too can be taken in our stride, but negative sentiment can be very destructive and the extent of credit problems is still not known
The pessimistic view has been revised upwards (less effect of fear) ... see the new orange line
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2641
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Friday, August 10, 2007 - 05:06 pm: |
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Can anyone improve on this forecast ... with the Fear Index drawing down the All Ords like a magnet?
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2644
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 11, 2007 - 02:01 pm: |
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Good Afternoon
I've decided to suspend daily publication of the Fear and Fundamentals Futures
I will still publish weekly
It seems the point is now well established that we are in a fear driven market not a fundamentals driven one
The unresolved question is whether the fear contagion will infect the fundamental behaviour of corporations
Typically markets overshoot fundamentals on the upside (the dot com boom for example) and on the downside in major bear crashes
If people are interested to correspond with me privately with their best and/or worst projections through to December with quantified best and worst case correction sizes and lengths I will happily receive such input while pondering the potato pile and the prospects for the weekly Fear and Fundamentals index
With Best Wishes
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2680
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 18, 2007 - 06:09 am: |
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Another week of fun and frolics by the fleecers and frustration for the fleeced
When will fundamentals assert their forcefulness?
The Fear Index assumes the worst (one hopes there is not an even worse case) while the Fundamentals Index hopes for the best
I was prepared to revise the Fear Futures upwards when the RBA raised Australian rates in an act of financial discipline (see the orange line in the chart)
Now that the US Federal Reserve has done the opposite by lowering its Discount Rate (not the general funds rate) I am alarmed that the financial fire engines have rushed out of the fire station looking for somewhere to throw the petrol of financial irresponsibility on the flames of poor credit management
Arguing against myself on that point I concede the importance of doing something to calm people's fears when irrational fear has taken hold
Does cutting rates really do what they expect it to do?
The unsophisticated may mistake a symbolic action for real action to put out the fire of poor credit control
The problem is that the fires of sloppy credit structures could be burning more widely than believed
Loose financial management by the Fed Reserve allowed the situation to grow and now they are hoping that more loosening will help
The sophisticated will recognise it as ineffective until all bad risk has been exposed
Given that there will be a psychological boost for the war torn traders and retail clients some settling of nerves may occur .. the Fear Futures already allow for that in the remainder of August
If fear resumes there will be more red ink before any real recovery
I hope as much as anyone that the worst is over, but a multi year boom may require more than a few days of painful cure
Those looking for a resumption of higher highs and higher lows ... myself included ... will be hoping that irrational fear based pricing and forced selling will dissipate
It really depends on how sick the financial sector really is as compared to how sick people think it is, and how soon the confidence based on actual knowledge of the extent of the credit problem can be restored
Confidence ahead of further revelations of fiscal frivolity may do more harm than good ... as the Fear Futures try to indicate
I hope and pray for better times soon, but given the dream run by the markets over a long period of years a weeding out of its flaws and fiscal fiascos seems necessary and desirable
I will be the first to applaud if the Fear Futures are wrong and the Fundamentals stay strong and continue to grow, leading to an upward revision of values that is soundly based
There is no excuse for central banks, rating agencies and corporations getting their sums wrong
Lets get out the adding machine (yes that one in the corner with the dusty old paper roll) and start adding up the good credit and the bad credit
Conputers clearly have so far served to confuse the gullible and those who should know better ... and yes I do know there should be an "m" in "conputers"
I am not against technology ... but it is time the power of computing was used to discover who can afford to borrow and who can't.
Confidence is itself a key ingredient in lending and the jobs market, but confidence comes from properly assessing risk ... not giving loans willy nilly to the desperate, the gullible and the financially illiterate.
So it's Fear in the Red Corner and Fundamentals in the Green ... remembering that fear itself can destroy good fundamentals.
If retail sales and jobs are not seriously affected there may be a lucky escape ... but already much paper wealth and a good deal of actual wealth has been destroyed
It takes more than a couple of dead in the water political leaders to solve this problem ... it takes vision and wisdom greater than that displayed since the under funded Afghanistan and Iraq ventures got under way
Remember how bullish going into Iraq was for the markets?
Are we now seeing the opposite?
The price of withdrawing real support for Afghanistan and Iraq and putting the financial health of the West in order may be greater than anyone ever expected
Also where are the Europeans and their Euros when help is needed? Probably reserving their seats at the resort pools with their swimming towels as though the world is safe.
I do not discount the possibility of a quick recovery so that we can all enjoy a summer at the beach or by the pool making money with our laptops, or better still leave the laptops behind and enjoy a well earned break.
At the moment a flight of pigs overhead seems more likely, but market madness takes many forms and Monday could be a whole new ball game if the merry market manipulators and the shell shocked shorters decide to give us some real joy rather than false hope.
Will those lazy hazy days of summer ever return?
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2853
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, September 01, 2007 - 07:05 pm: |
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Good Evening
Early in August I considered two possibilities for the XAO :-
(1) The market would remain strong based on fundamentals, dismissing subprime concerns quickly
(2) Confidence would be shattered by the emerging, but unknown extent of subprime mortgage issues and lack of certainty about the ultimate loss bearers
These two possible outcomes took the form of a relatively optimistic Fundamentals "Futures Index", deteriorating as consumer confidence began to lapse later in the year
The second was a Fear driven "Index" with much faster collapse of confidence
BOTH WERE PURELY HYPOTHETICAL GUESSES TO TRY AND FIND SOME PROVISIONAL BOUNDARIES FOR OPTIMISM AND PESSIMISM, by seeing how the market actually would behave within the 'boundaries'
It would not surprise if the boundaries are breached at some time in the future, so they are by no means fixed limits to what the market might actually do
Up to and including August 17 it seemed the pessimistic view might be correct but I raised the possible decline to the orange line because the Australian RBA acted responsibly to raise interest rates in order to establish financial discipline
I felt that it was actually a plus for confidence when the ASX market responded positively to the rate increase
This contrasts with the USA where people are begging for rate cuts
Since August 17 markets have returned towards the more optimistic view
What concerns me now is whether the current upward move has a long or short way to go from here, and what any subsequent down leg will look like. Will the next down leg be shallow or deep? If deep will it look like the Fear Index?
So far the forecast of an ongoing collapse appears incorrect with the strong recovery in the second half of August. This may be only a timing issue if the next leg down is severe, but confidence seems to be growing to some extent each day, though reservations abound
The problem with bear market confidence is that a big downturn then becomes even more shattering than before, if in fact the bears return in strength
On balance the economic news seems to hint at ongoing growth ... eg 4% GDP growth in the USA. So right now the Fear Index view has been defeated and the Fundamentals Index view is asserting itself, but t |
