F T S E Up By Record Amount In Opening Minutes?

[Realistbear]

FTSE 100 (FSI:^FTSE)

Index Value: 6,711.50

Trade Time: 8:18AM

Change: 76.30 (1.15%)

Prev Close: 6,635.20

Open: 6,690.10

Day's Range: 6,690.10 - 6,721.70

52wk Range: 5,654.60 - 6,751.30

MOney no longer going into B&M has to go somewhere, right?

[DrBob]

Shares predicted to break through 7,000

http://www.telegraph.co.uk/money/main.jhtm...cnshares109.xml

Last Updated: 2:04am BST 09/07/2007

Financial experts expect the world's stock markets to break through to uncharted highs this year as a record $2,300bn (£1,150bn) wall of cash is reinvested in equities. In stark contrast to the increasingly bearish views of commentators, equity strategists at Lehman Brothers and JP Morgan are forecasting another unprecedented six to 12 months of deals and market outperformance.

Ian Scott, Lehmans' global equity strategist, said: "We've never seen anything like this. There has been more money coming out than going into the market. There is more than enough liquidity to absorb current levels of issuance."

"

We think the market will take out the 2000 record highs, and we expect a lot of people to come into the market at that point

," he said, adding that the fundamentals this time are stronger, with "no sign of the exuberant retail investor" who propped up dotcom shares and "yields still attractive by historic standards".

He added that there will be a "flight to quality" with "large caps leading the markets higher".

I'd say the markets are enjoying the last hurrahs before a prolonged stock market crash. Remember that stock market falls seem to occur 6-12 months after the housing market peaks. The view of traders would be that this gives them 6-12 months to make some big profits (and boost their Christmas bonuses). If they can attract a host of 'retail investors' now, this will prop up valuations until the next stock market crash. And remember, professional traders can usually get out much quicker than retail investors can. I'd say we're in the 'greed' stage, moving towards 'delusion'.

[lets get it right]

MOney no longer going into B&M has to go somewhere, right?

Your signature ... it is Achilles' HEEL - he had a bad foot, not the ability to mend things.

[Mr_Nice]

Yep, buy buy buy. I aint kidding. Shares like BP, CYN will all continue to outperform due to increasing demands for resources and a bonus is that if the pound falls they will do even better.

Cash is trash. Savings are purely subsidising the government through inflation and assisting more credit to the masses. If you must hold cash hold it in another currency.

[Goldfinger]

Cash is trash. Savings are purely subsidising the government through inflation and assisting more credit to the masses. If you must hold cash hold it in another currency.

You sound like Doug Casey.

[Mr_Nice]

You sound like Doug Casey.

i am probably guilty of loitering around kitco etc too much but i am not an ardent gold bug. I have only maybe 15-20% invested in PM stocks and then only those with real value on earnings and yield. I only buy shares where i can justify the value not on optimism for future earnings.

[crashmonitor]

I don't think the merchant banks have ever had anything other than a bullish outlook on the market and that includes their position at the turn of the millenium.A strong market will,however, certainly not help the housing market as it will divert funds away and should also help bring forward that 6% Base rate to September.

Edited July 9, 2007 by crashmonitor

[Harry Sacks]

Oh dear, check out the builders

Top 10 losers

value change %

Bovis Homes Group

850.00 70.50 7.66

Redrow

519.00 22.00 4.07

Persimmon

1183.00 31.00 2.55

Bellway

1272.00 33.00 2.53

Quintain Estates & Development

861.50 18.50 2.10

Barratt Developments

993.50 21.50 2.12

Edited July 9, 2007 by dom

[Mr_Nice]

I don't think the merchant banks have ever had anything other than a bullish outlook on the market and that includes their position at the turn of the millenium.A strong market will,however, certainly not help the housing market as it will divert funds away and should also help bring forward that 6% Base rate to September.

Agreed. It is worth noting that if you could buy property at 2001 prices you probably would. The ftse is still at 2001 prices.

The path of course with stocks will not be smooth and another shake out is certainly due I have a couple of short positions on some key indecies just to balance out individual stock/sector picks

[@contradevian]

Oh dear, check out the builders

Top 10 losers

value change %

Bovis Homes Group

850.00 70.50 7.66

Redrow

519.00 22.00 4.07

Persimmon

1183.00 31.00 2.55

Bellway

1272.00 33.00 2.53

Quintain Estates & Development

861.50 18.50 2.10

And Barretts...

http://finance.yahoo.com/q?s=BDEV.L

[Goldfinger]

i am probably guilty of loitering around kitco etc too much but i am not an ardent gold bug. I have only maybe 15-20% invested in PM stocks ...

Not too bad. I must admit I have no PM stock whatsoever. It would just take too much of my time to do

proper research. Possibly I'll do in future. For the time being, I am in gold bullion only. I might purchase

some physical silver in the near future.

[dstars]

Yep, buy buy buy. I aint kidding. Shares like BP, CYN will all continue to outperform due to increasing demands for resources and a bonus is that if the pound falls they will do even better.

Cash is trash. Savings are purely subsidising the government through inflation and assisting more credit to the masses. If you must hold cash hold it in another currency.

Another currency?

What currency? Is cash by another name trash? How do savings cause inflation?

They don't. If we're all stuffing our money under the mattress how would that inflate prices?

IF the pound falls?

IF my aunty had balls she'd be my uncle.

There's nowt wrong wi' cash. Nothing wrong at all with savings accruing close to 6% with little risk.

So, if I buy, buy, buy what's my profit target? When do I get out and with how much profit? Or do I do a 'Motley Imbecile' and stay in forever? (So that I'm in inflation-adjusted profit when I'm 115 years old.)

What if it goes down? What do I do then? Where's my uncle point?

This market is an 'other people's money' market. It's easy to get 'right' and if it's wrong then 'everyone' is wrong (so what the hell?).

Sterling is doing very nicely indeed. Why would it crash? When would it crash? What would make it crash? Will it crash because it's strong? Or would it crash because it's high? Is there a difference?

You ain't kidding?

No, you ain't kidding, you is sounding like a guy I once stood behind in a queue to have a bet at the dog track. He believed (by shouting it loudly and with much passion) that the 'two dog' could not 'be beat' [sic]. He was very convincing. I'm sure some people changed their bets thinking he was on to something.

But when he went up to put his own bet on it was for 10p.

The 'two dog' lost but had it won I still wouldn't have believed him.

I don't know whether BP or CYN will go up or not, neither have I clue as to whether the pound will fall.

But you're even more clueless than me. If your strategy is predicated on false assumptions, you're gambling.

How about property? I've heard experts say it has a future.

[Mr_Nice]

Another currency?

What currency? Is cash by another name trash? How do savings cause inflation?

They don't. If we're all stuffing our money under the mattress how would that inflate prices?

IF the pound falls?

IF my aunty had balls she'd be my uncle.

There's nowt wrong wi' cash. Nothing wrong at all with savings accruing close to 6% with little risk.

So, if I buy, buy, buy what's my profit target? When do I get out and with how much profit? Or do I do a 'Motley Imbecile' and stay in forever? (So that I'm in inflation-adjusted profit when I'm 115 years old.)

What if it goes down? What do I do then? Where's my uncle point?

This market is an 'other people's money' market. It's easy to get 'right' and if it's wrong then 'everyone' is wrong (so what the hell?).

Sterling is doing very nicely indeed. Why would it crash? When would it crash? What would make it crash? Will it crash because it's strong? Or would it crash because it's high? Is there a difference?

You ain't kidding?

No, you ain't kidding, you is sounding like a guy I once stood behind in a queue to have a bet at the dog track. He believed (by shouting it loudly and with much passion) that the 'two dog' could not 'be beat' [sic]. He was very convincing. I'm sure some people changed their bets thinking he was on to something.

But when he went up to put his own bet on it was for 10p.

The 'two dog' lost but had it won I still wouldn't have believed him.

I don't know whether BP or CYN will go up or not, neither have I clue as to whether the pound will fall.

But you're even more clueless than me. If your strategy is predicated on false assumptions, you're gambling.

How about property? I've heard experts say it has a future.

WOW. There's a lot to digest there. I didn’t say saving caused inflation but it does facilitate lending. Inflation is an insidious tool that governments use to tax money you have already paid tax on. 6% savings rate - tax is not enough to compensate an RPI at 4.5% plus surely you should aim to increase wealth not just maintain parity. And if you stuff money under a mattress that is even worse. Perhaps you should seek professional financial advice?

But you are correct in saying don't look for it here. This is a forum for voicing opionions not advice.

[depaulo]

Another currency?

What currency? Is cash by another name trash? How do savings cause inflation?

They don't. If we're all stuffing our money under the mattress how would that inflate prices?

IF the pound falls?

IF my aunty had balls she'd be my uncle.

There's nowt wrong wi' cash. Nothing wrong at all with savings accruing close to 6% with little risk.

So, if I buy, buy, buy what's my profit target? When do I get out and with how much profit? Or do I do a 'Motley Imbecile' and stay in forever? (So that I'm in inflation-adjusted profit when I'm 115 years old.)

What if it goes down? What do I do then? Where's my uncle point?

This market is an 'other people's money' market. It's easy to get 'right' and if it's wrong then 'everyone' is wrong (so what the hell?).

Sterling is doing very nicely indeed. Why would it crash? When would it crash? What would make it crash? Will it crash because it's strong? Or would it crash because it's high? Is there a difference?

You ain't kidding?

No, you ain't kidding, you is sounding like a guy I once stood behind in a queue to have a bet at the dog track. He believed (by shouting it loudly and with much passion) that the 'two dog' could not 'be beat' [sic]. He was very convincing. I'm sure some people changed their bets thinking he was on to something.

But when he went up to put his own bet on it was for 10p.

The 'two dog' lost but had it won I still wouldn't have believed him.

I don't know whether BP or CYN will go up or not, neither have I clue as to whether the pound will fall.

But you're even more clueless than me. If your strategy is predicated on false assumptions, you're gambling.

How about property? I've heard experts say it has a future.

So you want to make an investment with worthwhile gains and no risk at all? let me know when you find it.

btw 6% after tax isnt getting you anywhere.

[domo]

Nothing wrong with 6% at zero risk. Especially if you think the asset markets are due for a fall.

[Guest The_Oldie]

Nothing wrong with 6% at zero risk. Especially if you think the asset markets are due for a fall.

Absolutely.

Besides, with cash you can move fast if an opportunity arises elsewhere. Property could take months to sell and at what price? Shares can be sold quickly but prices can fluctuate wildly.

[Mr_Nice]

Cash = zero risk. Are you sure.

Every day its worth less and less. That is a simple fact.

[Guest The_Oldie]

Cash = zero risk. Are you sure.

Every day its worth less and less. That is a simple fact.

Of course it is, but at least it's unlikely to fall off a cliff.

[dstars]

Nothing wrong with 6% at zero risk. Especially if you think the asset markets are due for a fall.

Precisely*. The time has long passed where investors might simply park their money and watch it grow steadily.

This is a time to protect one's money, if one believes a storm is brewing. I've noticed a tendency here for people to assume that sterling is somehow 'too high' and therefore a bad place to be.

But it looks okay to me. Cable could go to 2.20 or 2.30 or 2.50 or 3.00 or 5.00.

I'm not saying I think that's where it's headed but there is nothing out there at all to suggest that it will fall.

Again, it might fall, but it's hard to see any falls against the shitey dollar right now (Cable). Why would it fall? What's in place right now to make that happen? Are rates about to come down? Are US rates about to go up?

And please let's not assume that other currencies are 'better' and then assume that 6% means 6%. If cable should rise then the real rate of return will be higher. Buying dollars right now with sterling is a huge gamble of the wishful thinking variety.

But as Domo points out, right now one might want to avoid losing money rather than searching for gains in the stock market. A ton of money will certainly find its way into the stock market but mostly because institutions want to be holding sterling rather than any super opportunities.

And it looks easier to short banks and builders than to go long anything at all. I think this is important. Going short is very difficult to do, normally. When it starts to look otherwise it's probably time to head for the hills.

I'm not suggesting that people do this or that with their money, simply that your original assumptions are entirely flawed. If you like gambling, the stock market is easier than the horses for sure.

And even if sterling languishes where it is or goes down, well 6% is a lot more than property is returning right now.

The lottery offers wonderful returns - better even than oil companies, but 6% ain't bad.

*(And I understand that the risk isn't exactly zero, but if you spread it amongst banks you'll get close.)

[nowthenagain]

we are in for a general global asset crash.

the stock market is deluding itself. it's using borrowed money and is on borrowed time.

years of cheap money and cheap goods from china have created this ‘miracle’.

both of these things are now sliding away.

hence i have moved nearly all my wealth into cash.

only time will tell whether this was wise but it certainly lets me sleep easier at night.

which must be worth something in itself.

[Guest Charlie The Tramp]

hence i have moved nearly all my wealth into cash.

only time will tell whether this was wise but it certainly lets me sleep easier at night.

which must be worth something in itself.

[dstars]

...but it certainly lets me sleep easier at night.

which must be worth something in itself.

I think this is an important point, as is oldie's point about liquidity. It's not all about chasing exceptional gains. Some of us are happy simply not to lose our wads.

Also, holding something which most people have a negative amount of (in the form of debt) makes sense.

Indeed, the opportunities that will present themselves will probably be best traded (with cash) in a synthetic (liquid) market.

Buying volatility seems like a better gamble than the underlying things which will be yo-yoing around upon that volatility. I cannot see how volatility could possibly not increase in value as we watch the inevitable unfold.

But ultimately, you almost certainly won't lose your cash at 6%. So in three or four years (or one or two, I have no idea) you will be able to buy property, for example, for a lot less than it would cost now. (And, importantly, your money will exist: for oil companies can go down as well as up; even if oil itself only ever goes up.)

Buy-to-letters are about to imitate that other variety of small mammal; the lemming. They will start the rush. House prices should take a long time to hit bottom but I do not believe that will be the case this time. I think we may see (flat) prices taking great dives on heavy volume. Wags will tell us it's confined (just like CDOs crashing or sub-prime) but it's not, the first out of the traps will be the ones that get saved. Greed will cause many to wait and wait for a price that will never come again (or at least for a very long time). The small guy will get killed.

I think having cash will have great value; especially at all of those auctions where nitwit 'hedge' funds are selling off all the property they'll have on their books. Cash buyers will be feted and enjoy much kissing of posteriors.

Indeed, owning some cash at 7% (soon) will attract bragging rights.

[Starcrossed]

To add - I have quite a bit of cash in various places and feel comfortable with that.

If stock markets go up - fine.

If other asset classes go up - fine.

If inflation goes up - fine.

All these factors will push up interest rates. The only asset I care about spending any money on at all is a house. Inflation goes up, so do interest rates and then house prices fall.

In the meantime if I keep pace with inflation with my savings (which with the help if ISAs and N&SI inflation-linked accounts I am) then I can afford to wait for house prices to drop.

And I can sleep at night.

[Guest The_Oldie]

FTSE is not doing so well today.

http://uk.finance.yahoo.com/q/bc?s=%5EFTSE...&q=l&c=

[nick22abdn]

Nothing wrong with 6% at zero risk. Especially if you think the asset markets are due for a fall.

If the logic for saving at 6% is beacuase you believe there will be a fall in the asset market, surely you'd be better off selling the market short and significantly increasing your investment?