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Mikhail Liebenstein

Profit From Stocks And Shares

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I've just been adding up my share portfolio today and was delighted to find I am £12k richer than I thought I was.

No doubt this is entirely due to the recent stock market bounce and the question now is whether its time to sell or whether this is the start of a stock market bull run?

One point I would make about the stock market is that on at least 2 previous occasions in my life I have been wrong and overly pessimistic about shares and the City in General.

Once was just after graduation when I decided not to go into Banking as I decided that after the 1990s recession that the City would never recover. The second was after dot com when I got my fingers a bit burnt.

This time round my portfolio was again massacred, but I bought more durable companies than before and now these seems to be bouncing back nicely.

I am heavily in BP, Natural Resources funds, China (JP Morgan) , India (JPMorgan) , Vietnam (VinaCapital) , Japanese equities ( this is actually doing well based on the weak pound) and Japanese Real Estate (the worst bit of the portfollio, but I averaged down and the cheapest shares have more than doubled). The one that will never come back was a small investment of £1800 in a UK Logistics firm than went bust, but that's what you get dealing with City Equities and Penny shares - some will conversely sky rocket.

Any way, I think I have now become an equity bull, but remain a housing bear. I base this on the usual pattern of recovery from recession. The stock market and business climate always has to improve, then you get inflation and falling bond prices only after a good 6 years of this do you find that house prices start rising.

Edited by mikelivingstone

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Must be putting something in the water down here Mike.

I was holding cash and it felt dangerous and wrong, and maybe more revealingly, plain boring.

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Even in the mild downturn ten years ago, they still took from 1999 to 2003 to find the bottom. This time they peaked in around late 2007. Id be VERY surprised if the bottom was reached within 5 years from that date.

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Even in the mild downturn ten years ago, they still took from 1999 to 2003 to find the bottom.

...during a period of low inflation....

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I expect more volatility. But short of timing the peaks and troughs, there's not too much to do about it except make regular topups and occasional small adjustments.

My only strategic direction as of now is to put more into asia and developing markets (particularly asian developing markets), as they've a lot more potential and less trouble than ours. Good to do when sterling is looking high again.

Also contemplating tiny speculative investments (like, £500 a shot) into very-small-caps, in the hope of catching a big winner or two. Feels like gambling: my current small-caps are all losing; the big gains are in mid-caps. Though one of my small-caps investments is now a growing mid-cap with a big yield!

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trading volumes 800-900mln a day vs 2-3bln a day normal level

400mln a day will make you a market maker/manipulator

rally of 100 days long will not require more than 40-50bln funding to manipulate FTSE

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Any way, I think I have now become an equity bull, but remain a housing bear.

Careful, we are only in the first retracement of the 2007 Bear, which itself only took out the 1982 Bull in March. Next leg down likely in Q4. Appearances are deceiving.

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trading volumes 800-900mln a day vs 2-3bln a day normal level

What unit? £? Or numbers of shares, with no distinction between the 3p and the £30 share?

And what, in your book, makes a normal level? Are you sure that's not a variant on expecting house prices to bounce back to "normal" levels?

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What unit? £? Or numbers of shares, with no distinction between the 3p and the £30 share?

And what, in your book, makes a normal level? Are you sure that's not a variant on expecting house prices to bounce back to "normal" levels?

Normal trading volumes are 2-3 billion shares a day

they currently stand at 800-900 million shares a day

both FT and yahoo finance and also bank analyst point at this gains on low volumes

there is also somewhere a trading theory that on exceptionally low volumes market moves exactly in the opposite direction of the trend (that is even if it is not being manipulated)

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Normal trading volumes are 2-3 billion shares a day

they currently stand at 800-900 million shares a day

both FT and yahoo finance and also bank analyst point at this gains on low volumes

there is also somewhere a trading theory that on exceptionally low volumes market moves exactly in the opposite direction of the trend (that is even if it is not being manipulated)

http://www.ft.com/cms/s/2/b05f60f2-7df3-11...144feabdc0.html

"Investors would certainly be a little stupid to think that the FTSE rally has been measured on a normal sample of trades. Over the 11 days of gains, daily volumes on the Stock Exchange averaged less than 1bn, compared with 2.3bn-2.5bn a year ago. As market watcher David Buik, of BGC Partners, put it: “Volumes have been absolutely rubbish, 800m-900m – it just goes to show the brittleness of the rallyâ€. It’s insufficient data for Manoj Ladwa of ETX Capital, who this week warned: “A lot of the improvement in corporate performance has been down to cost cutting, stock market volumes are still low, confidence is fragile.â€

Homeowners would be even more stupid to believe those house price rises were based on anything like a meaningful sample size. Over the periods covered by the indices, sale volumes were down by around 75 per cent, compared with the 10-year average – and down by 50 per cent on last summer. As former statistics software vendor Nick Hopkinson, now of Property Portfolio Rescue, put it: “Such an illiquid housing market makes looking at monthly price trends statistically meaningless.†It’s not sufficient data for Paul Samter of the Council of Mortgage Lenders, who this week admitted: “The outlook is still sluggish.â€

"

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Normal trading volumes are 2-3 billion shares a day

they currently stand at 800-900 million shares a day

both FT and yahoo finance and also bank analyst point at this gains on low volumes

there is also somewhere a trading theory that on exceptionally low volumes market moves exactly in the opposite direction of the trend (that is even if it is not being manipulated)

Interesting. I guess that theory could be based on "under the radar" smaller investors buying low (drive it up) selling high (down) ...

What about the rest of the world? Everyone seems to have had big rallies, but on what volumes?

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For what it is worth I´m with you Mike, property bear and equity bull (Mild in both cases). Particularly equities in emerging Asian markets. Even given the recent increases equities still look good value.

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Any way, I think I have now become an equity bull, but remain a housing bear. I base this on the usual pattern of recovery from recession. The stock market and business climate always has to improve, then you get inflation and falling bond prices only after a good 6 years of this do you find that house prices start rising.

Personally I think a lot of shares are currently valued on earnings that companies have no hope of achieving in the next year or too and when that is realised there will be a further fall in share prices. This bull run has got way ahead of itself.

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Anyone who takes notice of analysts and buffet and base their strategies on them should stay away from equities, anyone chasing dividends needs locking up for their own safety. None of them know what they are talking about, and are only ever a single person making guesses. Anyone and everyone on CNBC are a good example, bloomberg also.

Edited by shug

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