Ftse Breaks 5400

[Van]

Closed today on 5407. More to come I think as Wall St closed higher overnight and crude prices continue to retreat.

Money is pouring into the SM from all directions now. As we are so overbought on technicals, my reasoning is that it can only be from new money entering the market that wasn't there before.

Property's no longer hot. Stocks are back in vogue.

This time next year everyone will be on about which shares to buy and property will be a dirty word.

[needle]

Dead...cat.....and eh..... dammit cant remember.

[Michael]

not convinced about the merits of shares but property is a bad investment right now.......As another poster said in another thread ...ordinary Joe Bloggs' are now seeing property investment as an answer to all their economic woes.....People believing this en masse is akin to tulip bubble mania!....and we really are up the creek..

[the_duke_of_hazzard]

my reasoning is that it can only be from new money entering the market that wasn't there before.

<{POST_SNAPBACK}>

I wondered about this recently when I bought a maxi ISA for the first time. Is there any evidence that money invested in stock market vehicles is increasing and that this can be made a funciton of growth in value of housing stock?

[Golden Shower]

Haven't followed the market for a short while, but isn't the FTSE rise mainly due to the oil companies?

[privatefraser]

Haven't followed the market for a short while, but isn't the FTSE rise mainly due to the oil companies?

<{POST_SNAPBACK}>

yes, and it is all down to the BAGHDAD BOUNCE.

Let Dr Bubb or any other war apologists deny that the war was a massive boost to the DJ and the FTSE and to the US and UK economys in general.

bas.tards.

[Dicky]

yes, and it is all down to the BAGHDAD BOUNCE.

Let Dr Bubb or any other war apologists deny that the war was a massive boost to the DJ and the FTSE and to the US and UK economys in general.

bas.tards.

<{POST_SNAPBACK}>

The massive fall in the FTSE in March 2003 to 3200 was due to begining of the war, what we're now seeing is just the recovery back to 7000 where it was in 1999.

You really are a silly boy.

Edited September 17, 2005 by Dicky

[TWT]

The massive fall in the FTSE in March 2003 to 3200 was due to begining of the war, what we're now seeing is just the recovery back to 7000 where it was in 1999.

You really are a silly boy.

<{POST_SNAPBACK}>

You mean there is a new bubble?

TWT

[Guest muttley]

You  mean there is a new bubble?

TWT

<{POST_SNAPBACK}>

You mean you haven't got your foot on the stock ladder?

Don't worry about a Stock Market crash,the government would never let it happen.

[Van]

The stock market is massively overvalued by historical measures.  (Read Prechter's Conquer the Crash for analysis.)  Like all major bear markets, a large decline is followed by a large correction pulling back towards (but not to) the bubble top, before the next deeper decline.  The infamous Slope of Hope.

Expect a big drop some time soon, unless the Plunge Protection Team just keep printing money to buy everything.  Then expect hyperinflation.

<{POST_SNAPBACK}>

Nope. It trades on 13 times earnings, which is historically CHEAP, with corporate earnings still growing at a healthy rate.

Property by comparison is priced at 20 times earnings with earnings growth flat.

Edited September 17, 2005 by Van

[dogbox]

Nope. It trades on 13 times earnings, which is historically CHEAP, with corporate earnings still growing at a healthy rate.

Property by comparison is priced at 20 times earnings with earnings growth flat.

Van Im with you on this.

Glad I didnt take 'Financial Planners' advice early this year. He kept saying its was about to pop and I kept saying I saw a long way to go yet (sorry, FP, nothing personal

Ive kept on buying each month on the 'simplistic' basis that 'money seeks a new home' when the previous en - vougue home (property) gets creakey.

[Clouseau]

Your history is too short.  Long term historical P/E is certainly in single figures.

http://www.fool.co.uk/stockideas/2002/si020917.htm

<{POST_SNAPBACK}>

I found Prechter pretty convincing, & have wondered about how the 'boomer' effect might also be playing a part in creation of the vast current credit bubble; it's not something he dwells on overmuch, but the shift from high-income/property-wealth-sustained consumerism to a more frugal, older-age lifestyle of boomers (as they become less economically-active with increasing age) seems likely to me to be a big factor in what happens over the next decade or so, in vastly reducing consumer demand. Any major social trend since WW2 that the boomers have been involved in has been much magnified by their sheer numbers, I'd be surprised if economics was an exception..

Memo to self; buy shares in stairlifts!..

[privatefraser]

The massive fall in the FTSE in March 2003 to 3200 was due to begining of the war, what we're now seeing is just the recovery back to 7000 where it was in 1999.

You really are a silly boy.

<{POST_SNAPBACK}>

Utter nonsense. The FTSE and DJIA were falling because of the massive corporate scandals in the US in 2002 (ENRON et al ) and the fallout from the dot.com bust.

The IRAQ war was by no means a certainty until January 2003 and was not factored in to stock market valuations.,

When the DJIA and the FTSE took off vertically in Macrh 2003 it was down to wha ta leading Times economist called "A powerful filip to fraglie business confidence by the war".

They even christened it the BAGHDAD BOUNCE (BB)

You are the silly boy and I will prove it by posting graphs of various companies stocks in the years before MARCH 2003 and shortly afterwards.

As you can see Halliburton had been falling steadily since the dot.com bust in 2000 and the HUGE CORPORATE FRAUD SCANDALS of 2002

Notice the sharp pick up around about March 2003 which is the BB.

HALLIBURTON

BP

same story as HAL

and

BOEING

PRUDENTIAL

BARCLAYS apartheid loving sucm did well too

ETC ETC AD NAUSEAM . But all the little Gold Schmucks rubbed their hands in delight in London and New York when the war was announced and they cant wait to make TRILLIONS of dollars in Iran.

After all its their destiny.

Edited September 17, 2005 by privatefraser

[Van]

Your history is too short.  Long term historical P/E is certainly in single figures.

http://www.fool.co.uk/stockideas/2002/si020917.htm

<{POST_SNAPBACK}>

You may have a point, but I would say that if you wait for the market to return to single-digit p/e you could well be waiting the rest of your life. If earnings steadily increase for, say, the next 3 years and the market moves onto 16 or 17 times earnings, together with divi reinvested, it's not implausible that you could almost double your money. Don't think this is possible or likely? Look at the AIM or midcap index since 2003. I think it's a far more likely scenario than seeing the market move back into single-digit p/e territory.

[Van]

I agree (see my cross-post above), but it's too risky for me.  You need a "greater fool" to buy at the end.  They may well be there, but maybe not.  If you buy assets at or under fair value you can be stuck with them for life and be saved by the cashflow.

But good luck to you if you understand this stuff well enough to play it well.  I know you can make a lot of money that way.  (I did with my house, by pure luck.) 

<{POST_SNAPBACK}>

Well, sure. If it reaches bubble proportions, you need the a greater fool. As the dotcom and property bubbles have proved, there's usually no shortage of them. The beauty of equities of course is their liquidity - you don't need to look the greater fool in the eye and lie through your teeth in order to make a sale- just call up your broker and tell him/her to sell your shares

And the other GREAT advantage of equities is that you can offload in chunks, so judging the peak isn't such a great deal. Indeed it's a fool who decides to offload all at once unless they are VERY sure.

[Guest muttley]

According to this guy we're about to witness the biggest Stock Market bubble in history.

The Next Great Bubble Boom

The author,Harry S Dent claims the Dow could reach 35,000 to 40,000 and the Nasdaq 13000 by late 2009 or 2010!!

[dogbox]

  Calling the top of herd behaviour is not my speciality.  I just keep my assets out of classes that are overvalued

The problem with your approach is that you may miss - out on herd inspired growth. I knew people that stayed out of B2L in 1998 when they could have ridden the wave for few years.

Only ever buying on fundamentals seems overly cautious to me.

Im hoping to purchase a Berlin property. No doubt the fundamentals are against such a move, but IMO the herd will stampede Berlin in the next 5 years.

[privatefraser]

Here are the companies who won most of the major contracts in IRAQ

See if you can find their tickers in YAHOO FINANCE because I cant.

Funny thing is they were there last year .

The Louis Berger Group, Inc. 10/13/04

BearingPoint, Inc 09/20/04

Creative Associates International, Inc. 07/14/04

Bechtel 01/06/04

Development Alternatives, Inc. 10/21/03

Management Systems International 06/25/03

SkyLink Air and Logistics Support (USA), Inc. 05/05/03

Abt Associates, Inc. 04/30/03

Research Triangle Institute (RTI) 04/11/03

Stevedoring Services of America (SSA) 03/24/03

Air Force Contract Augmentation Program (AFCAP) 02/17/03

International Resources Group (IRG) 02/07/03

Edited September 17, 2005 by privatefraser

[the end is a bit nigher]

it's different this time - not exactly sure what 'it' is but everyone says so, so it must be true

[FrozenOut]

I think it's going to continue rising.

Four months ago, alot of members on here were saying it was teatering on the edge of collapse.

It's gone up 600 points since then.

[lowrentyieldmakessense(honest!)]

Your history is too short.  Long term historical P/E is certainly in single figures.

http://www.fool.co.uk/stockideas/2002/si020917.htm

<{POST_SNAPBACK}>

Are you sure - I'm just in the middle of a book called "Unexpected Returns" by Ed Easterling and he says the S&P 500 average P/E is 15.8 between 1900-2000. At some point is has been near to 5 (1920, 1931 and 1980ish).

PS

book is worth a read - when iv'e finished it am going to post a summary.

[Guest Charlie The Tramp]

Van Im with you on this.

<{POST_SNAPBACK}>

Well the IMF are not.

Indebted families will suffer and the knockon effects could drag share prices down and even push the country close to recession. The IMF warned that the average family's debt is one and a half times what they earn in a year.