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Realistbear

Fund Manager Sees Why Merv Warned Of Bumpy Rd Ahead

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http://business.timesonline.co.uk/article/...2309869,00.html

Business
The Sunday Times
August 13, 2006
Terrorism alerts ‘could send stocks down by 10%’
Louise Armitstead and Dominic O’Connell
ONE of Britain’s biggest institutional investors has warned that the stock market “has another 10% to fall” as a result of terrorism threats.
The warning came from Ted Scott, a senior fund manager at F&C, the asset-management group, who said that investors were being too sanguine in their outlook.
“The terrorist scare at UK airports has highlighted the fact that markets have been complacent about geopolitical risk and have not factored in a high- enough risk premium,” he said.
Scott argued that the risk of terrorist attacks would combine with other economic factors to trigger a
“mini bear market”.
“There are all sorts of economic factors that add to the geopolitical risk, such as rising interest rates, the weak dollar, a fall in consumer spending and overinflation of equity markets. I would expect the markets to fall by as much as 10% in the next few months.”
......../

IMO, all of the factors present in the May correction remain in place. Complacency charaterises today's housing and stock markets. Media spin has, until very recently, been conning the public that prices can continue upward without any fundamentals to back the moves upward other than irrational exhuberance.

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"Mini bear market"

Sounds kind of cute and furry, not at all like the hungry Grizzly which will get let loose if the Fiat banking system starts to unravel as I expect it will. Still if you have your frog in a pan of water best heat it up gradually in case the frog jumps out. I will start counting how many times the R word (recession) is mentioned in the press over the coming months. B)

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that's a clear SELL recommendation

He has no idea how far it will fall (nor do I). What he is really saying is:

+ The next 10% looks to be : most likely down,

+ That's a big enough driop to get out of many stocks,

+ He will look again at the market, to see if more is warranted AFTER a 10% drop

Over on GEI we called another top at the early August high. we are short

Do stocks on the AIM tend to remain unaffected by general stock market moves?

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AIM listed stocks are far from being immune to down legs.

If you look at a chart of AIM1.L versus the FTSE100 you will see that the AIM100 stocks have fallen further since the beginning of June.

Although it does seem that the top ten stocks in the AIM100 are predominantly energy/mining so in the longer term???

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that's a clear SELL recommendation

He has no idea how far it will fall (nor do I). What he is really saying is:

+ The next 10% looks to be : most likely down,

+ That's a big enough driop to get out of many stocks,

+ He will look again at the market, to see if more is warranted AFTER a 10% drop

Over on GEI we called another top at the early August high. we are short

ties in very nicely with my FTSE year end prediction of 5300 doesn't it!!!!

...am still looking for a shock to send us below 5K(4800) before a rebound.....could the israel/lebanon/US/iran story be it????...I think it might.

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I have been short for the last couple of weeks, but have now closed my remaining positions. This market is too pessimistic to fall much further IMHO. Last week the bears had all the ammunition they needed: hawkish comments from BennyB, Israel ramping up their ground operations, an above-forecast inflation figure, and a major airport crisis, yet were unable to push the Dow down to 11,000 or S&P down to 1250 levels. The bears' growl isn't frightening anyone, no matter what Mr Scott says.

The markets are more likely to RALLY 10% on a cessation of ME hostilities than to tank 10%.

Here is the latest sentiment chart. Not exactly showing unsustainable optimism, is it?

Bull vs Bears

Edited by Van

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  • 302 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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