Black Monday Is Here...

[Sledgehead]

Its similar to asking what a fisherman thinks may happen to Cod if more restrictions are made if Fuji drop film manufacturing to invest more in digital. A person's spiritual belief system has no relevance to market plays.

Fidelity have over $1 trillion under their management. When they say to go to cash they are in effect saying not to buy products from them from which they make commissions. I received a margin warning awhile ago to the effect that they saw trouble coming and to limit investing to cash on hand and not borrowed money from Fidelity (margin). When advise goes against a brokerage's interests (i.e. commissions) it may be smart to listen to what they have to say. You should try not to confuse investment advise with non-related issues like the price of fish, Fuji's decision on film or someone's spiritual views--its weird you know

When a market tanks and if we get a recession it is not good for brokers as trading declines and the little guys eventually go to cash if they have any left. You may recall the thousands of city brokers that were laid off after the dot.com crash? If it happens again we can expect much the same result.

I see: I show you data, you say "so what, I'd rather BELIEVE".

And that has nothing to do with you being religious.

[Realistbear]

I see: I show you data, you say "so what, I'd rather BELIEVE".

And that has nothing to do with you being religious.

The data from a day's trading indicates what you say--a lot of little guys trading causing brokers to make more money. The long term trned may be a lot of little guys selling. Once the selling stops they don't get back in but rather go away and lick their wounds as they did after the dot.com bust. Certainly, brokers do well when a market is crashing because people have to get out. But once they are out..............

I take what Fidelity advise as having credibility as the advise goes AGAINST their best interests as their money is made when people invest in their products not when they go to cash. Now, if the broker said to borrow MORE on margin and invest in stocks etc. I could see your point. More commissions!

Fidelity have been accused of being market movers because of the vast sums of money invested in their funds. It may be-but it pays to listen sometimes. Think ahead and ask yourself why so many people are trading--especially if it leads to declines in the markets.

[Sledgehead]

The data from a day's trading indicates what you say--a lot of little guys trading causing brokers to make more money. The long term trned may be a lot of little guys selling. Once the selling stops they don't get back in but rather go away and lick their wounds as they did after the dot.com bust. Certainly, brokers do well when a market is crashing because people have to get out. But once they are out..............

I take what Fidelity advise as having credibility as the advise goes AGAINST their best interests

All you have to do is admit that they churned you. It's painful, but liberating.

.. their money is made when people invest in their products not when they go to cash.

..and how do you suppose you'll get back on the bandwagon once you've gone to cash? I'll let you answer that one out of context.

... More commissions!

And by the way. There are ALWAYS new sheep. Who cares about the old ones who got shafted?

Fidelity have been accused of being market movers because of the vast sums of money invested in their funds. It may be-but it pays to listen sometimes. Think ahead and ask yourself why so many people are trading--especially if it leads to declines in the markets.

Cos Fidelity told them too in your case.

Oh, and you do realiise don't you that large inflows to funds always occur just before tops and vice versa. No? Hav eyou not done any of your own research? Oh, I forgot : you BELIEVE. Ever considered faith based investnments?

"You ever wonder why fund manager scan't beat the S&P 500?

Cos they're sheep. And sheep get slaughtered."

Wall Street Oliver Stone - yeah, it's fiction. But it's also true. Can you say the same about other good books you choose to follow?

Edited May 25, 2006 by Sledgehead

[Realistbear]

All you have to do is admit that they churned you. It's painful, but liberating.

..and how do you suppose you'll get back on the bandwagon once you've gone to cash? I'll let you answer that one out of context.

And by the way. There are ALWAYS new sheep. Who cares about the old ones who got shafted?

Cos Fidelity told them too in your case.

Oh, and you do realiise don't you that large inflows to funds always occur just before tops and vice versa. No? Hav eyou not done any of your own research? Oh, I forgot : you BELIEVE. Ever considered faith based investnments?

"You ever wonder why fund manager scan't beat the S&P 500?

Cos they're sheep. And sheep get slaughtered."

Wall Street Oliver Stone - yeah, it's fiction. But it's also true. Can you say the same about other good books you choose to follow?

You are obviously unfamiliar with how Fidelity works. They are a no-load mutaul fund seller primarily. There is no charge to buy and sell their funds. They charge management fees for the funds while you own them--around .75%-1%. So all they have lost by my going to cash is the management fees they are not getting on the stock mutual funds. The charge for cash mutal funds (money market) is very low and they are currently paying 4.67%.

Nearly all the funds I help beat the S & P by a considerable margin (Contrafund, Canada Fund, Balanced, Defense Fund, Diversified International, Oakmark Equity Income, Oakmark Global Fund. Most paid well in excess of 20% for the past couple of years). I retain some but have gone to about 85% cash ready to bounce back in on a couple of energy and exploration funds as I believe these have been oversold given the continuing growth potential on this sector.

I watch world markets and base my research on trends, what Warren Buffett is doing, and individual prospectuses although these are not indicators of the future. You have to know when its time to take profits--a couple of weeks ago was that time. Had I waited I would have lost a great deal of money--as it was I sold virtually at the top (something property investors are unable to do--the "believers" will no doubt get hit hard when the market tanks and they try to chase it down). I doubt I will get back in until after the summer and even then I may elect to get back into the Real Estate market in California as the repos are coming in fast and furious. My gut is that that market will be bad for at least 2 years. The UK? Not sure how long Gordon can keep the faithfull believing in his "miracle economy." I take it you are one of the believers? It takes more faith to believe in Gordon's miracle than believing house prices only go up.

IF you failed to go to cash in time you might want to cut your losses and sell on today's bounce. Just put your faith in the market and the fact that it runs in cycles and anyone who has convinced you that miracles occur are just salesmen trying to win votes and the keys to No. 10.

[CrashIsUnderWay]

u heard it here first - big turning point on the S&P , Tuesday.

[Sledgehead]

You are obviously unfamiliar with how Fidelity works.

yeah, sorry, pooled funds and all that. Not my speciality.

You have to know when its time

...

... Thursday could be disastrous for the FTSE as the Tuesday bounce is not carrying through and the US market is signaling another bad day according to the futures:

...

If you are not already out of the market now might be a convenient moment to get out.

Thursday : FTSE +1.6%, 90% of index UP, 70% of constituents in TOP QUARTILE, only 2% of constituents in bottom quartile.

IF you failed to go to cash in time you might want to cut your losses and sell on today's bounce. ... Just put your faith in the market

Another unit trust dude who thinks day trading is a matter of belief ....

Not sure how long Gordon can keep the faithfull believing in his "miracle economy." I take it you are one of the believers?

You must be joking. I believe in money flow, fear and greed. Outside of that I prefer a little evidence.

Edited May 25, 2006 by Sledgehead

[Realistbear]

yeah, sorry, pooled funds and all that. Not my speciality.

...

Thursday : FTSE +1.6%, 90% of index UP, 70% of constituents in TOP QUARTILE, only 2% of constituents in bottom quartile.

Another unit trust dude who thinks day trading is a matter of belief ....

You must be joking. I believe in money flow, fear and greed. Outside of that I prefer a little evidence.

iIF you believe in fear and greed you must also believe in the economic cycle. There is a time for bullish sentiment and a time for bearish sentiment. Nothing ever stays the same. There is a time to invest in property and a time to sell. Its time to sell.

Evidence? You will not find any. Markets rely on faith. Past performance is not a reliable indicator of the future performance--we all know that. What you put your faith in determines your course of action. I put my faith in the economic cycle and believe that cash is best in times of turmoil , rising IR, and top of the cycle conditions for property. There is no evidence of a property crash today (just a mild correction--8.2% in my area according to the ODPM data which I place more faith in than Rightmove's "data.") because all crashes are observed from hindsight. You have to have faith in your bet and ride it out and hope that you chose the right strategy.

We all rely on faith for a lot of things. We have faith the plane is not going to crash but there is no evidence to be seen until after the flight is over. Same thing with stocks. We buy based on our faith (or belief) and if it pays off the evidence then appears.

Markets are driven by sentiment and fundamentals. Sentiment is faith based, fundamentals are more factual. The money is in the sentiment bets because they beet the herd. My sentiment right now is negative on the SMs and fortunately I beat the herd to the exit. As Warren Buffett says, when the herd are buying its time to sell. The herd have been buying houses at fundamentally insane prices for a few years now which indicates its time to wait on the sidelines as the herd try to get out. But, no one knows for sure, its all about faith.

[Realistbear]

http://today.reuters.com/investing/MarketR...SE-UPDATE-4.XML

UK shares end higher, further volatility on cards

Thu May 25, 2006 12:05 PM ET

By Keiron Henderson

"Today we've finally seen the buyers step up. The bears have been caught short and now they're covering their positions. The figures in the U.S. helped that. I think that will continue for the rest of the week," he said.

"

My theory is that this was the first wave down in what is going to be a big correction

...because of worry about interest rates. Higher rates will hurt a lot of consumers, inflation will continue," he said.

[Sledgehead]

iIF you believe in fear and greed you must also believe in the economic cycle. There is a time for bullish sentiment and a time for bearish sentiment.

...

Markets are driven by sentiment and fundamentals. Sentiment is faith based, fundamentals are more factual. The money is in the sentiment bets because they beet the herd. My sentiment right now is negative on the SMs and fortunately I beat the herd to the exit. As Warren Buffett says, when the herd are buying its time to sell.

We agree, but you get your information from a broker, in whom you have FAITH.

Let me tell you something about that broker. That same broker you have so much faith in MISLEAD the public in one of its recent advertising campaigns. They tried to persuade people to buy into the stock market by showing the relative performance of the market vs property in a chart. What they failed to point out was their supposedly fair comparison wasn't fair at all. In fact it was MASSIVELY MISLEADING. For while they showed the FTSE-AllShares chart with DIVIDENDS REINVESTED, they failed to include RENTAL YIELD in the property index. They received complaints about this campaign but still ran the advert for a further month (by which time the fund had closed and anyone who was going to be deceived had already been). How do I know this : I was the first to bring it to their attention.

So NO, I do not trust Fidelity or any other broker. I would never accept their view on the market.

I prefer, as I said to trust fear, greed and money flow. You claim the market is over-bullish because Fiedlity tell you as much. I have no opinion other than that which I get from figures.

Here is today's chart showing what punters in the options market sare doing with their money. Maybe time will prove it to be irrelavent, but as you can see, the ratio of folks betting the market would fall vs those betting it would rise peaked at the recent market nadir. That was why I was critical of your scaremongering at that nadir.

I could also show you charts that demonstrate that Americans who prefer pooled investmenst are overwhelmingly bearish. I could also show you charts depicting extreme levels of odd-lot short positions in the US (ie small guys betting the market will fall). Whilst all these charts could prove worthless they AT LEAST show that your view of sentiment is not as clear as you believe. Indeed, you even know this to be true yourself: the stock market is as nervous as hell. It is PROPERTY that is overconfident. Stop conflating the two.

[Realistbear]

We agree, but you get your information from a broker, in whom you have FAITH.

Let me tell you something about that broker. That same broker you have so much faith in MISLEAD the public in one of its recent advertising campaigns. They tried to persuade people to buy into the stock market by showing the relative performance of the market vs property in a chart. What they failed to point out was their supposedly fair comparison wasn't fair at all. In fact it was MASSIVELY MISLEADING. For while they showed the FTSE-AllShares chart with DIVIDENDS REINVESTED, they failed to include RENTAL YIELD in the property index. They received complaints about this campaign but still ran the advert for a further month (by which time the fund had closed and anyone who was going to be deceived had already been). How do I know this : I was the first to bring it to their attention.

So NO, I do not trust Fidelity or any other broker. I would never accept their view on the market.

I prefer, as I said to trust fear, greed and money flow. You claim the market is over-bullish because Fiedlity tell you as much. I have no opinion other than that which I get from figures.

Here is today's chart showing what punters in the options market sare doing with their money. Maybe time will prove it to be irrelavent, but as you can see, the ratio of folks betting the market would fall vs those betting it would rise peaked at the recent market nadir. That was why I was critical of your scaremongering at that nadir.

I could also show you charts that demonstrate that Americans who prefer pooled investmenst are overwhelmingly bearish. I could also show you charts depicting extreme levels of odd-lot short positions in the US (ie small guys betting the market will fall). Whilst all these charts could prove worthless they AT LEAST show that your view of sentiment is not as clear as you believe. Indeed, you even know this to be true yourself: the stock market is as nervous as hell. It is PROPERTY that is overconfident. Stop conflating the two.

I agree with not trusting anyone implicitly. I have gone to mostoy cash because I do not have faith in this current market due to too many negatives including inflation, cooling demand in the US, house price crash beginning in the US and the first signs in the UK (ODPM for some areas--mine inlcuded at 8.2% down last Q). Houses, stocks, commmodoties have all been trading based on markets sentiment and belief in the future. The flippers are no more than housing "day traders" which has put property in much the same category as any other asset.

The reason I have gone to mostly cash recently is that I see IR rising in the medium term. Perhaps the sell in May and return in October mantra may be right again--I am not sure. Fidelity's warning was one voice among many I listened to as it was against their financial interests for me to bail out of mutual funds held with them. I still own all of my stocks and they have done okay as they are in UKCoal, RBS and a few US stocks that I plan to hold long term.

Warren Buffet has also advised that the market is over-bullish. His voice is joined by Alan "Big Al" Greenspan and Mervyn King. I include houses in the "market" because of their speculative nature and commodity status. Even David Lereah, the biggest perma Bull in the world (President of the US Realtor's Association) has said recently house prices are falling and that the boom in HPI is over. If HPI is over, the industries that feed it are going to suffer: B &Q, Home Depot, MFI etc. etc. Wider knock-on effects will be seen in car sales as the "wealth" generated by HPI and MEW will vanish. Housing forms 70% of spending either directly or indirectly. When we get a correction in houses a recession always follows. Recessions and stock prices are not good friends. This is why Bernanke is treading a thin line--one IR hike too many and it all crashes. He now admits house prices are being factored into his decision making process--just like stocks.

Fed can't ignore price changes in stocks, homes, Bernanke says

http://www.azcentral.com/arizonarepublic/b...rnanke0526.html

Jeannine Aversa

Associated Press

May. 26, 2006 12:00 AM

WASHINGTON - Federal Reserve Chairman Ben Bernanke said the central bank can't turn a blind eye to price changes for stocks and homes when setting interest rates but should take action only when they threaten the overall economy.

That all said--we live in erratic times and markets seem to be resembling the meanest roller coaster rides on earth at this moment. Its the on again off again IR threats from Japan and the US that are partly responsible. We shall have to wait and see whether the market is going to meltdown but for me its not worth the risk as it took 5 years to climb out of the last drop.

Jap IR hikes appear to be on again today:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

TOKYO (XFN-ASIA) - TOKYO (XFN-ASIA) - Japanese government bond (JGB) prices finished mostly lower as investors fretted that higher interest rates in the short-term money market would eventually spread to the government debt market, dealers said.

The yield on the bellwether two-year debt -- generally considered the most sensitive to central bank monetary policy -- was at 0.840 pct, up sharply from 0.785 pct at the close yesterday.

The wolf eventually gets to eat the boy despite his many false cries.

US rates still soaring, perhaps in anticpation of further moves at the Fed:

http://www.signonsandiego.com/news/busines...b26calbrfs.html

UNION-TRIBUNE

May 26, 2006

Rates on 30-year mortgages climbed this week for the eighth time in the past nine weeks,

hitting the highest level in nearly four years.

Freddie Mac reported that rates on 30-year, fixed-rate mortgages rose to 6.62 percent from 6.60 percent last week. This week's rate was the highest since the week ending June 20, 2002, when 30-year mortgages were at 6.63 percent.

http://www.signonsandiego.com/news/busines...45-economy.html

The housing market, once a star economic performer, is losing some of its shine as mortgage rates march higher. Sales of previously owned homes fell 2 percent in April to a pace of 6.76 million units, the National Association of Realtors said in another report.

House prices posted the smallest increase in 4½ years. And, the total number of unsold homes climbed to a record high of 3.38 million units

.

“An orderly retrenchment of the market is what all of us have been

hoping for

and that is what we are getting. At least for now,” said Joel Naroff of Naroff Economic Advisors, who was concerned by the backlog in unsold homes.

Edited May 26, 2006 by Realistbear

[Van]

Panic over. Hands up who was busy buying in the last week?

[15:30] <NMB> [^FTSE]: 5768.50 +90.80 | (+1.60%) Vol:0 Ask:N/A [FTSE 100]

[15:31] <NMB> [^FTMC]: 9441.90 +251.40 | (+2.74%) Vol:0 Ask:N/A [FTSE ACT 250]

[15:31] <NMB> [^FTAS]: 2940.22 +48.81 | (+1.69%) Vol:0 Ask:N/A [FTSE ALL-SHARE]

[15:31] <NMB> [^FTAI]: 1119.30 +16.20 | (+1.47%) Vol:0 Ask:N/A [FTSE AIM INDEX]

VIX index

[DonnieDarker]

Yeah. The market's really collapsing...Black Monday my @rse.

[Guest wrongmove]

I notice the dollar has picked up today - up 2c against £. Any reason for this ?

[bubbleturbo]

I notice the dollar has picked up today - up 2c against £. Any reason for this ?

Some inflation data indicates more IR hikes.

[Realistbear]

1 U.K. £ =

1 1.8563

3 cent improvement

Today the markets have decided lower IR possibilities in the US = stronger dollar

Or, is it sterling that is growing weaker?

Edited May 26, 2006 by Realistbear

[Sledgehead]

I watch world markets and base my research on trends,

what's your view on this one RB?

[Realistbear]

what's your view on this one RB?

I am afraid I am with the fund managers:

http://www.telegraph.co.uk/money/main.jhtm...16/cnpoll16.xml

Keeping mostly to cash with a little more in value stocks, utilities and Global Funds. Energy Exploration stocks and UKCoal.

What, exactly, does the chart represent? All global stockmarkets?

Edited August 16, 2006 by Realistbear

[Sledgehead]

I am afraid I am with the fund managers:

http://www.telegraph.co.uk/money/main.jhtm...16/cnpoll16.xml

Keeping mostly to cash with a little more in value stocks, utilities and Global Funds. Energy Exploration stocks and UKCoal.

So when you said you followed trends what did you mean?

[Guest Alright Jack]

I am afraid I am with the fund managers:

http://www.telegraph.co.uk/money/main.jhtm...16/cnpoll16.xml

Keeping mostly to cash with a little more in value stocks, utilities and Global Funds. Energy Exploration stocks and UKCoal.

What, exactly, does the chart represent? All global stockmarkets?

UKCoal have an awful lot of debt and have interests in real estate.

[Realistbear]

So when you said you followed trends what did you mean?

In Britain, concerns are focused on inflation, with data yesterday showing that prices have been rising faster than the Bank of England's target for three months in a row. In America, which has been the engine of global expansion, attention has already shifted to pessimism about economic growth and the sustainability of corporate earnings.

Taking their cue from this month's pause in the Federal Reserve's two year monetary squeeze, investors are swinging back to safe-haven investments such as government bonds, says David Bowers for Merrill Lynch. Bonds are usually attractive to investors when economies contract and rates are cut to stimulate demand.

The above quote from the Telegraph sums it up nicely. We have had an unprecedented bull market extending for more than 5 years. The global trend points to stagflation possibilities in the major Western economies which is not good for stocks. Inflated assetts bubbles will continue to unwind as they have peaked, IMO. China must hit a correction soon which will cause global demand in commodities to drop and Japan appears to be stalling, again, as it tries to break out of endemic stagflation. Oil has been rising steadily and will add to the recessionary trend as it is not possible for manufacturers to absorb the rises indefinately. They will then be faced with selling goods on a contracting market beset with rising unemployment trends headed down and affordability ceilings that are not rising due to stagnant wages.

The trend in the US since 1998 has been inflating house prices which have been driving the economy. Ditto for the UK. That is changing and contraction is inevitable. Hence recession. Add to the mix the trend in deteriorating geo-political situations and it all adds up to a bear market. IMO, Ben sees the trend toward ression also and that is why he paused last time around. Inflation is still there but it may be petering out as the 17 hikes have worked through the system.

The Telegraph article states that the Fund managers are turning bear. They invest trillions and if there is a trend in the consensus that says stay away it might be sound advise. The contrarian wold have got out earlier this year when everyone was jumping in. Now the contrarian bet is on the US$

UKCoal have an awful lot of debt and have interests in real estate.

Its a long term bet. I bought at around 1.41 and its at 2.03 today. The trend is toward looking at coal afresh due to new technology and the need for alternative fuels while the world works out if it wants more nukes. The net is full of "coal stuff" right now with mostly positive comments on the viability of coal as a fairly long term stop-gap measure. It was a contrarian bet as no one really took "King Coal" seriously. In the public's eye it brings back nightmares of Arty Scargill attempting to bring down the government etc.

[tenroom]

Here we go . . . yet another false dawn for the bears God this is getting boring

[Sledgehead]

We have had an unprecedented bull market extending for more than 5 years.

Isn't that a trend?

[Realistbear]

Isn't that a trend?

More like a recovery trend from the stockmarket bust that followed the dot.com meltdown. DOW still hasn't fully recovered from those highs.