Archive through July 02, 2008

Chart Forum » Hilarius' Hall Of Fame » Our Daily Bread » Archive through July 02, 2008

«« « Previous Next » »»

Author

Message

rdumas

Member

Post Number: 1511
Registered: 11-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 09:14 am:

WHAT BEAR MARKET ?

The world is on the verge of collapse........we are in the worst economic situation since the 1980's....... sky rocking oil and food prices,etc, etc, etc. When every newspaper you pick up forecasts the end of the world as we know it one can understand people getting rather apprehensive about their life savings and in particular their retirement savings.

When you see the performance of the various sectors making up our market you can see real pain.

Financial sector (XFJ) down 41.0% from November 2007
Consumer Discretionary (XDJ) down 42.3%
Industrials (XNJ) down a massive 60.5%

But wait, is there any good news at all ?

Materials index only down 3.1%
Energy index up 20.0% !!!!

There is no doubt that things are tough but to ignore that there are some stocks still performing well in this, the worst global economic situation that the world has faced in around 30 years is defeatist.

Just check out how a handful of our Australian companies are dealing with the situation. I won't give you any more because you need to do some work for yourselves don't you.

OM Holdings (OMH)

Discovered by that famous world explorer ....... Eugenio !!!

This stock is rated as financially 'Strong'. Average investor returns during the last 5, 3 and 1 year periods were 61.01%, 40.34% and 231.91% respectively.

I assure you that this is a real stock and not a figment of my imagination.

Portmann Limited (PMM)

I gladly admit owning this one.

Again this stock is rated as financially 'Strong'. Average share holder returns over the last 5, 3 and 1 year periods were 76.56%, 64.11% and 75.88% respectively.

Incitec Pivot (IPL)

Again I gladly admit owning this one.

This is a Stock Doctor Star Stock which obviously indicates that there are no financial problems here.

Average investor returns for the last 3 and 1 year periods were 134.05% and 140.82% respectively.

Mount Gibson Iron Limited (MGX)

Another one of mine but Eugenio beat me to it by a day or so.

Another Stock Doctor Star Stock.

Average investor returns for the last 5, 3 and 1 year periods were 91.87%, 69.58% and 132.85%.

Leighton Holdings Limited (LEI)

Yes I admit to owning this one as well. It is not as spectacular as some of the others but it continues to win major projects. It also is a Stock Doctor Star Stock. The average share holder returns for the last 5, 3 and 1 year periods were 43.7%, 69.46% and 26.59%.

I should also admit that I own a real 'dog' of a stock as well currently. Not that I think that it is a dog but the market does and the market is always right. The stock is WBC !!!

Do I plan to sell it. Nope. As Ody puts it, this is one I have to take on the chin and collect the dividends on (and wait for the market to wake up to itself).

kate

Member

Post Number: 924
Registered: 04-2005

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 09:41 am:

Rudy, love the joke you posted yesterday.

It was interesting to read what you wrote about the TMF, it has very similar pattern to the VIX (albeit inverse) showing no signs of panic yet.

Ody

You may be interested to hear that JP Morgan gave our banks a really good slap over the knuckles yesterday saying they were far to complacent about the credit squeeze. They feel the banks as a whole are overvalued too which doesn't bode well for that sector today.

Kate

cat_lady

Member

Post Number: 464
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 10:04 am:

Rudy
you might be interested in this article from another site:

WBC

AN institutional investor -- with shares in St George and Westpac -- believes Westpac could be the target of short-sellers wanting the bank to sweeten the terms of its proposed $18 billion merger.

"You wonder whether there's not a bit of a deliberate market move to bring Westpac to change the terms," the investor said.

Westpac shares came under further selling pressure yesterday, dropping 3.3 per cent or 69c to $20. More than 19 million shares changed hands.

St George fell 4.8 per cent or $1.39 to $27.10. The shares of the other three major banks -- National Australia Bank, Commonwealth Bank and ANZ -- shed less than 1.2 per cent.

His comments came as another institutional shareholder told The Australian that the proposed $18 billion-plus merger could be complicated if Westpac shares continued to fall.

Since Westpac announced the 1.31-for-1 merger terms in mid-May, its shares have fallen about 16 per cent.

Last Thursday, St George chief executive Paul Fegan told a conference that the merger remained on track and still had the blessing of the board.

He also reiterated that the board's recommendation of the proposal had always been "subject to remaining in shareholder interest", which means Westpac's shares not falling too far.

If Westpac's shares continue to sink, one option the bank could explore is putting a floor on its stock value for St George shareholders, similar to what Wesfarmers offered disgruntled Coles Group investors when its shares slumped.

end quote

I too, enjoyed your joke yesterday, particularly apt as I'm having yet another birthday today....

cat lady

Without my morning coffee I might as well be a dog

rdumas

Member

Post Number: 1512
Registered: 11-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 10:49 am:

Hi Kate,

I'm delighted that you enjoyed it. It seemed appropriate at the time. I wonder if the apparent lack of panic may be more a sign of numbness from months of bad news and pain. The human brain only has a certain capacity to endure pain before it closes down (numbs itself).

rdumas

Member

Post Number: 1513
Registered: 11-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 10:55 am:

Hi Cat Lady,

Happy birthday !!!!!

Another Cancerian. No wonder you're such a nice person.

Yes a friend of mine privately emailed me that article. I had come to the conclusion that there was some market manipulation taking place because the action just didn't make any sense as from a fundamentals perspective WBC is the best of the big 4. I do hope that they don't get tempted to up the price because I reckon that St George needs the merger a lot more than WBC does.

kate

Member

Post Number: 925
Registered: 04-2005

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:19 am:

Rudy

I thought it all rather ironic considering the banks have been pretty dismissive of the problems for the last year or so! If they are now of the opinion that the Oz banks are being complacent we might see the US banks rise!!!

Cat Lady
Happy Birthday!

Kate

deanrosario

Member

Post Number: 1447
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:27 am:

Retail sales figures and Building Approval numbers about to be released by the ABS at 1130 a.m.

These figures will give us some idea about how 2 very important sectors of the Aussie economy are coping at the moment.

It would be fair to think the figures would have to be extremely bad to spook the market any more, but in the current climate anything is possible.

"Never commit yourself to anything you can't walk away from in 30 seconds." Neil McCauley (played by Robert de Niro) in 'Heat'.

"Hope is a dangerous thing. Hope can drive a man insane." Ellis Boyd "Red" Redding, played by Morgan Freeman, in 'The Shawshank Redemption'.

rdumas

Member

Post Number: 1514
Registered: 11-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:29 am:

Hi Kate,

I must admit that I don't happen to agree with J P Morgan's assessment of our banks. I don't think that they are over valued at all, in fact quite the opposite. Obviously the market so far is on JPM's side but we'll see how it all washes out in the end.

By the way getting the WBC dividend cheque today helped ease the pain.

rdumas

Member

Post Number: 1515
Registered: 11-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:34 am:

The S&P500 formed a bullish hammer candle last night so it would not surprise me to see our market actually end up in the green by close of business today.

It might not last long but at least it would be a bit of a reprieve for a few days. Of course the market may not agree with me. It enjoys making fools of those who dare to forecast.

ody

Member

Post Number: 2576
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:36 am:

Kate: We not only often think alike, but manage to find the same stuff, though you were ahead of me in locating the BIS material specifically! (And how important it has proved to be ...) As it happens, I had seen both the article on WBC that you quote and the assessment of the banks by JP Morgan, but that does not in any sense diminish my gratitude to you, for you were right to post this material for the thread as a whole, and personally I might just as readily have missed it.

I must admit that I do not feel in the least attracted to investing in a bank at present, for I fear that those who say they are likely to fall further are almost certainly right. If, however, you own a bank and a loss on it already, you may, I feel, decide to hold on to it rather than "crystallize" the loss, as eventually the bank will no doubt be saved and return to a higher level. Indeed, if one imagines a really desperate situation like in the US there is the possibility that, just like there, a "rescue effort" US-style here, if it occurred, would send the price up in spectacular fashion! So, as an unhappy shareholder in WBC, I think I will in this case "sit tight" and hold on. I cannot see the company collapsing.

In a bull market I usually sell quite quickly, and thus, by letting the profits run, make very good money. A bear market does not personally suit me, which is why I have little money in the market. One reason why I find bear markets confusing is that you HAVE to accept that low prices are usually at least as much due to bearish sentiment as any fundamental reason, so that those who claim that sound blue chips will eventually come back up are often proved right. It's torture, though, which is why I prefer usually not to own much during such a period: you often think you buy something cheap, only to see it go down yet further!

As it happens WBC is probably the healthiest bank we have, and its grave difficulties in the share price seem almost entirely due to the SGB factor and the way the market is dealing with it. (I concede it would have gone down anyway, but the corporate factor is what sets it apart.) So I think it IS likely that the price will come back up again and that in this sense there is probably merit in taking a so-called paper loss "on the chin" rather than sell. However, you are very, very right to draw attention to the JP Morgan view.

Thanks very much - you certainly know how to go find both the relevant material and to go straight to the point in your comments!

My general position is that most of our money is on deposit, some in hybrids with a high yield, and a small percentage in direct stocks. My exposure to the market has been only REALLY very bad in the case of WBC, though some others have also been disappointing. All in all, since December 14th I am, thanks to very low exposure to direct shares, going up at a rate of about 7% p.a. in our pension fund (where most of our money is). I would have done better by not buying any shares at all, as I would be running at more than 8%. So our pension fund has been harmed, at this stage, by about 1% as a result of exposure to direct shares. While this sounds trivial in a sense, my fear is that the shares may take me down further, but I think that probably all in all I shall continue to get richer rather than lose money, while if I had invested in the index I would, of course, have gone down with the market. Even so, I would have been happier with no shares at all!

ody

Member

Post Number: 2577
Registered: 10-2006

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 11:38 am:

Cat Lady:

Congratulations from another old friend! It is always a pleasure to hear from you.

Cheers and many happy returns!

deanrosario

Member

Post Number: 1448
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 12:13 pm:

Building Approvals (May 2008)
Ref: abs.gov.au

All seasonally adjusted data

TOTAL DWELLING UNITS
- fell 6.5% in May following a revised increase of 5.4% in April.

PRIVATE SECTOR HOUSES
- fell 1.2% in May following a revised increase of 1.2% in April.

PRIVATE SECTOR OTHER DWELLING UNITS
- fell 18.2% in May following a revised increase of 11.9% in April.

VALUE OF BUILDING APPROVED
- rose 0.7% in May.

My analysis: investment in housing fell in May, but I can't draw any conclusions major conclusions about the health of the building market based on these figures alone since the April figures appear to tell the opposite story!), although the graphs below suggest the trend peaked in Nov-07 and is now falling.

(Message edited by deanrosario on July 02, 2008)

deanrosario

Member

Post Number: 1449
Registered: 11-2002

Rating: N/A
Votes: 0


Wednesday, July 02, 2008 - 12:17 pm:

Retail Trade (May 2008)
Ref: abs.gov.au

SEASONALLY ADJUSTED ESTIMATES

* turnover increased by 0.7% in May 2008.

This follows a revised decrease of 0.1% in April 2008 and a revised increase of 0.3% in March 2008.

* Industries that had an increase in the seasonally adjusted estimate were:
- Food retailing (+1.0%),
- Recreational good retailing (+2.2%),
- Other retailing (+3.1%) and
Hospitality and services (+0.8%)

* Industries that had a decrease in the seasonally adjusted estimate were:
- Department stores (-0.8%)
- Clothing and soft good retailing (-0.3%) and
- Household good retailing (-1.0%).

cat_lady

Member