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STRLondon

Confidence

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Confidence is a funny thing. Its nothing really, a feeling that somethings fine, or safe, but that sense you have is not a reflection of reality. Just because you may feel confidence, doesnt mean you are any more likely to be right or wrong, its just a level of belief in what you are doing is right.

We all know that Con-men are nasty peices of work who trick us to get our money, but a Con-man (or confidence man), is fooling you into doing something stupid because you feel safe in doing it. This isnt too disimilar to the way some banks look professional, but all when you drill down to how they make money, all they are doing is creating scams and gambling your money in a loaded system to try and win more money. The system is loaded in their favour, they will always get paid even if they loose the majority of your money.

Well this rally is based on confidence, and confidence comes and goes. The reality remains, somewhat lurking in the background out of immediate sight. If confidence remains, so will the trends which we are experiencing right now. The so called recovery. But, The government knows its all rubbish, but they also know that it is this confidence which is keeping us afloat right now, so they will not tell you the truth, that they are not confident in no shape or form. (you may here this afterwards in Alistair Darlings's memoires, or Gordons version of Mein Kampf.

Lets look at a few examples, using hindsight, ah what a lovely thing! At the bottom of the stock market in march, confidence was so low that prices had bled away for the best part of 9 months. Confidence was so low infact, that very few wanted to invest in it. I actually think some sort of co-ordinated effort was made to create a rally, whether Goldman Sachs were given the nod, or a backstop by the Fed, the politicians knew that confidence had to be created from somewhere, even if it was false, its better than nothing.

Now the market is up 50%, everyone is feeling more confident, so we are piling in like good sheep, but forget confidence for one second and look at reality. If you had bought when confidence was low, you were buying at a much better price than today. The reality is your paying more now for less, but now you are happier to do it, because you feel more safe that you wont loose your money.

This is topical, because house prices have started to rise, and everyone is starting to think of buying, confidence is growing, is it safe? can I come out now?

Im also watching the stock market in America, the FTSE has just closed up, almost at 5000. Confidence is high here, but the DOW is going down pretty quickly. My confidence is starting to dissappear in this rally, and I am looking towards the door. If that line goes down a few days next week, Ill maybe start panicking, selling whatever price I can get. This with have a cyclical effect and could cause a stampede.

The housing market looks at the stock market for signs of safety. It has taken much support from the stock market in recent months. So if we see a sell off, that will most certainly knock on into the housing market.

I just dont think the economy could suffer another shock to confidence without having a rapid sell off, which will crash house prices once again.

So just to summarise, CONFIDENCE isnt a good indictor on which to base your decisions, just be careful when you feel confident - you might be being conned.

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Confidence is a funny thing. Its nothing really, a feeling that somethings fine, or safe, but that sense you have is not a reflection of reality. Just because you may feel confidence, doesnt mean you are any more likely to be right or wrong, its just a level of belief in what you are doing is right.

We all know that Con-men are nasty peices of work who trick us to get our money, but a Con-man (or confidence man), is fooling you into doing something stupid because you feel safe in doing it. This isnt too disimilar to the way some banks look professional, but all when you drill ........ could suffer another shock to confidence without having a rapid sell off, which will crash house prices once again.

So just to summarise, CONFIDENCE isnt a good indictor on which to base your decisions, just be careful when you feel confident - you might be being conned.

How's your confidence now?

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Its an English thing and seen particularly in the workplace.

Ever noticed how nobody in the UK can make a decision ? Well there is you answer with regard to the markets, they wait for someone else to make the decision, then follow on behind.

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Its an English thing and seen particularly in the workplace.

Ever noticed how nobody in the UK can make a decision ? Well there is you answer with regard to the markets, they wait for someone else to make the decision, then follow on behind.

thats true.

shall I buy this house?...the loan is nearly all my income....hmm...Ill ask my broker......Hooray.....its sorted!

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