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If There's A Big Stock Market Crash

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Guest Bart of Darkness

A stock market newbie writes:

If the current stock market boom turns to crash (1987 style), there will be opportunities (I would guess) to buy stocks at cheap prices.

Which companies would be a good choice to invest into?

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A stock market newbie writes:

If the current stock market boom turns to crash (1987 style), there will be opportunities (I would guess) to buy stocks at cheap prices.

Which companies would be a good choice to invest into?

Just forget whether there will be a crash or not and invest long term (more than 10 years). A crash isnt too likely.

Incidentally, the 1987 crash recovered within a year or two but the dotcom crash has stil not properly recovered even now,

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Bit of a silly question, really. Whether or not the stock market crashes does not turn good companies into bad ones or vice versa. A god stock remains a good stock wether the FTSE is at 6000 or 3000. Just ask yourself: what is a good stock to own NOW? when you choose to buy it is up to you.

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I'm a complete novice but the ironic thing about dips in the market or even crashes is that they provide people with cash-at-hand a great opportunity to buy and make large returns...over time though.

Since 1918 the average return on the market is 11%.

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I'm a complete novice but the ironic thing about dips in the market or even crashes is that they provide people with cash-at-hand a great opportunity to buy and make large returns...over time though.

Since 1918 the average return on the market is 11%.

Yes best time to buy was during the Iraq war when the market was at rock bottom. You would have made a fortune if you had.

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Yes best time to buy was during the Iraq war when the market was at rock bottom. You would have made a fortune if you had.

Interesting.

For me, having a portfolio of low-mid risk shares and trying to time further purchases within the market dips that occur periodically is good enough.

I'm only in a position to invest £4k a year (isa) and will put this into one share each year.

This very basic model has seen the portfolio grow about 20% in the last year, but it has been a very good year for the market.

As April approaches I need to think about my next investment...

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I recommend anybody who manufacures/imports sex toys...

Yeah I reckon too ;) - and mobile technology. You know anything about Virtual Reality companies?

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Bit of a silly question, really. Whether or not the stock market crashes does not turn good companies into bad ones or vice versa. A god stock remains a good stock wether the FTSE is at 6000 or 3000. Just ask yourself: what is a good stock to own NOW? when you choose to buy it is up to you.

well there are degrees of good aren't there van!!

I would much rather buy a beaten up stock whose EPS have risen massively while the stock price has come down.......it's much better than the fictional future gravy train we saw in 2000....better still if the pundits have written the sector off too!.....that's why I like the look of pharma's!!!!

...still bullish on nuclear,commodities(although I'm looking more at corn+coffee etc now,rather than steel)....precious metals(all look good but palladium in particular).

the sneaky sector I think maybe waste management......if the likes of oil go through the roof then incineration for energy,recycling of wood based products looks fantastic!.....the brown paper bag makes a comeback!!!!

Yes best time to buy was during the Iraq war when the market was at rock bottom. You would have made a fortune if you had.

indeed.moved my pension fund back into equities in apr '03.done rather nicely.....not quite so optimistic for this year but I'm holding them.

better money to be had overseas....japan still looks good!!!,I'm not expecting much in the way of index gains this year but the benefit will be the currency play.....I'm looking for $/105jpy this year.....which is 10% gain.

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Here are some of my thoughts, mainly revolving on getting cash to outweigh fall in share price or exposure to overseas markets if the UK falls, as you cant beat the market when it starts to heavily sell EVERYTHING.

Nuclear power - AVEVA, company sells software used in design and construction of nuclear power plants, has risen alot over last year so not sure if youd be over paying or what the dividend is etc, but seems to be a good bet on nuclear from a business point of view so might out preform the FTSE??

Outsourcing company - Spice Holdings seems to have been getting good reviews of late, business comes from lots of utilities which are going to be more steady streams of income than other markets as everyone uses water and energy and are likely to continue to outsource non core activities. Again might outperform if the economy does take a tumble and people look to cut costs

Dividends - I bought BT last year (barely moved hovered around 210p for ages) in that its going to give lots of cash back and does make lots of cash which I see as real tangiable business output, I think its underrated in that its Broadband will be everywhere etc, but share price hasnt moved much so the market thinks otherwise. In a down turn I cant see people trimming necesities such as the net has become, and I think big safe cash machines like this shouldnt get hammered too much in a downturn

Aviva, I bought some shares back in September again based on the big cash machine that it is and that in the long term I was thinking pension and saving products will need to find a home somewhere, insurance premiums were also likely to go up and latest results are looking good. In a downturn the dividend should still be there and is a big safe company.

Britvic- Fell over 25% last week which I think must be an overeaction due to lack of track record on the market and a new company. I used to work for the company and though Im in no way bullish about the long term prospects of fizzy pop, they are quite an innovative company though wont make another star like Fruit shoot and I dont think there water offering will come to much they will make a steady profit year on year, if the weathers good sales always go through the roof regardless. Big manufacturing base will be exposed to rising prices, own brand squash competitio, but they will continue making job cuts and have a strategic partnership with Pepsico so expect popular yank products such as GATORADE to start hitting the UK market in style sometime which will drive sales. Im not saying that its a star company but its worth looking at with profits of £40million, at a discount to IPO.

The mistake I have made in my first year is Ive split my captial up too much and put say £1k here and £500 here or there, being inexperienced I didnt realise what movements you need in a price to wipe away dealing costs and then make a decent profit. Ive been fortunate that I bought Rolls Royce (238p now 445p) a property company called Worksapce (240p now 320p) and put the rest in Ishares which have no commission or stamp and dealing costs. IN the next few years Im going to invest in bigger lumps, but then the risk is you pick a share that for some reason unexpectedly does badly.

This ISA year I might look to more Ishares on a monthly basis, maybe Japan or a the UK high yeild dividend ishare as i dont have the savings to make big £1k plus purchases. I might also look to AIM at a few china stocks Bodisen and Asian citrus both are exposed heavily to chinese agriculture and will be based on good growth prospects, hopefully more western style governance than normal chinese companies, and the fact that the Chinese government wants to become SELF SUFFICIENT in regards to food so should one would expect logically benefit from such huge political support.

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sorry if there is a crash then you should assess carefully weather the assets you wish to buy represent good value after the crash.

you see the crash Or a sudden correction of market values to more sensible prices may very well mean that a bear market may have only just started. in which case you could wait for further declines beofre buying in. look at Nikkei in 1989 prices have never recovered and took narly 10 years to hit a final nadir.

the important thing is to only buy a asset which you think can deliver you long term value via good earnings dividends and growth.

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sorry if there is a crash then you should assess carefully weather the assets you wish to buy represent good value after the crash.

you see the crash Or a sudden correction of market values to more sensible prices may very well mean that a bear market may have only just started. in which case you could wait for further declines beofre buying in. look at Nikkei in 1989 prices have never recovered and took narly 10 years to hit a final nadir.

the important thing is to only buy a asset which you think can deliver you long term value via good earnings dividends and growth.

Indeed, alot of people got their fingers burn't twice during the .com crash, they bought into shares that had lost 90% of their value because they 'seemed' cheap ( think a $100 share falling to $10 ) those shares then lost a further 90% ( the $10 share went to $1 ).

Absolutely agree with the dividend point. I have two portfolios, a long term investment fund stuffed with dividend yielding elephants that make things people will still need in 50 years time, I don'e care too much about the share price because the portfolio is yielding approx 7% at puchase values, enough to keep me in gin and suncream when I've retired to a nice beach resort.

The other is a short term punting portfolio, it's much smaller and satisfies my urge to trade on interesting things I read and hear.

Btw right now IMO dividend stocks are still a steal due to the bizzare new pension rules that are forcing insitiutions out of the stock market. Take UU. that yields 6.6%, is inflation proofed, and may be a takeover target, what more do you want?

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Btw right now IMO dividend stocks are still a steal due to the bizzare new pension rules that are forcing insitiutions out of the stock market. Take UU. that yields 6.6%, is inflation proofed, and may be a takeover target, what more do you want?

gilts with a 0.38% real yield ? :o maybe not eh

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A stock market newbie writes:

If the current stock market boom turns to crash (1987 style), there will be opportunities (I would guess) to buy stocks at cheap prices.

Which companies would be a good choice to invest into?

sure.....my play would be MAN group.

they're a hedge fund and as such can short markets quite easily.

......they can make profit both ways in a market....the more volatile the better.

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yep MAN are deffinetly making money, I walk past their offices every day. I can honestly say I've never seen so many high end 2005 Mercs and maseratis :o

their AHL diversified futures fund must still be pulling in the big bucks.

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AS you are a nweby, I know from my own never ending journey that you probbly wont understand what I will say till afew year and many losses have come to pass and educate if you pursue to learn from them.

COnsider the crownd or people that you share your holding with if its a crowd that has no reason to have aexperience or knowledge then id get out.

Look at not buying a house as opposed to buying a house, on the one hand you would be with the likes of some of the moste astute minds on this board as opposssed to those that are leaving thepreperty seminars.

SOME ONE HAS TO CARRY THE CAN / HOLD THE BAG / TAKE THE FALL / BE THE PATSY / WLAK THE PLANK /

Forget the market understand Capitalisum at all levels then scrutinise all the little cogs and bits. The truth is there but it is very obscured cos other wise it would not work. and social order would not be maintained.

When tony blair told the queen that britains are very propserous, seriously is it tru for the average no quality of life has reduce in real terms. When he told the queen Britian is a class less society - oh really and how many childern of the ruling classes does average folk mix with then!

The truth can set you freee!

But it takes effort to keep learnigna and thincking and you end up with a lot of conflicting ideas with fuzzy interfaces between ideas. but i prefer this unceartainty with the pieces of truth than rose tinted global view of reality with force fitted ideas that dont fit together.

Take care markets are brutal. Learn the facts first. If you find such plese point it out cos im still looking for all of them.

I found some important points made in "The technology of political control by Tim Shallice"

you may like to read my previouse posts i having wirtten alot of ideas that were not set some i have debunked others remain strengthed, but they should give you some leads.

Sp1

Sorry, to more directly answer; Buy companies where the news or market opinion worsens but the price doesnt go down ... you need to find a way to judge when all the sellers have capitulated. Or were cos of some factors people wont find a purchase of it palatable to thier reality or thier social charachter.

my 2 pence; UNMET MEDICAL NEEDS has great potential.

Edited by sp1

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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