Tuesday, Jul 29, 2008
'Maximum pessimism' is the time to buy. But have we reached it?
MoneyWeek: 'Maximum pessimism' is the time to buy. But have we reached it?
Markets bottom out when investors are at their gloomiest and all hope seems lost. But how do you tell when that is? John Stepek sheds a little light – and tips the best sector to invest in now.
Posted by damien @ 02:00 PM (691 views) Add Comment
7 Comments
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1. layers said...
We're nowhere near 'Maximum Pessimism' yet - this time next year though could be the time. Watch 'Checkmate' carefully as I think they could be the ones who just might have the inside track - just a thought. Also the war with Iran hasn't even started yet - how gloomy will the public be then!
Oh, and apparently more local US banks have been quietly failing whilst the media mainly stayed silent: "Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp Inc, the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California." (http://www.reuters.com/article/newsOne/idUSN2528445020080726?sp=true).
Many more to follow in the US and possibly here too. Either way pessimism has a long way to go yet - except for the woman in Boston who shot herself just prior to her home being repossessed. Very sad indeed for her whole family. (http://www.sott.net/articles/show/162962-Signs-Economic-Commentary-for-28-July-2008)
2. techieman said...
layers - i am actually a bit concerned because an indicator for me would be the number of bulls on here. They have evaporated! I want to see 'em because when there are no bulls left thats when we start to return. Still i have done a quick survey (listening down the local) and there are loads of people saying that all you have to do is hang on because like the late 80s fall - property allways goes back up again - phew thats better!!!
3. layers said...
@2 Techieman - Haven't they just! However, I agree that most people I talk to either haven't been directly affected, don't see it affecting them or believe that they can hang on for the longterm. So definitely not reached the bottom yet!
4. peter_2008 said...
As long as there are still property porns on TV, I don't think we hit bottom yet. Even Crosby report just said this will go on for another 3 years.
5. Toto said...
Nowhere near maximum pessimism point. Wait for the huge number of job losses to come and 3-4 quarters of 'negative growth' (I hate that term) and then you'll see pessimism.
6. Total-super-uber-bear said...
Prices are still falling in Japan nearly twentyl years later.
This is the decline of the West and a shift of power to China.
Property will keep falling for many years to come.
The economy of some European countries will not do much either (specifically the UK)
7. jonb said...
Basically, what it means is that once Stuart Law of Assetz stops talking up house prices, and moves on to plugging something else instead; that is the time to move back into property.