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It is different this time

Are We On The Brink Of A Prolonged Stock Market Decline Or Will Shares Bounce Back

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http://www.thisismoney.co.uk/investing-and...mp;in_page_id=3

THE BULLS

It's about stock-picking

Richard Plackett, UK fund manager for Blackrock: It will be about stock selection more than ever before for professional investors. In order for companies to make good returns they are going to have to grow under their own steam. Investors have put big emphasis on quality companies. I am bullish but in a relaxed way – there is scope for equities to move higher from here over the next couple of years.

THE BEARS

Days of easy credit are gone

Martin Slaney, head of spread-betting at GFT Global Markets: What we are witnessing is a rapid unwinding of risk on a global scale. In these extremely nervous market conditions, economic fundamentals have gone out of the window and panic selling has set in. The risk aversion and volatility is not likely to disappear for the foreseeable future.

The days of easy credit are almost certainly over and the implications of this for everyone - from hedge funds to home owners - are only now being realised

I'll have to agree with Martin Slaney that the removal of easy credit will have serious consequences on both markets.

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You buy shares in a company, not a stock market.

In a crash normally about 20% of shares grow. you should pick defensive stocks. Auctioneers might do well for instance.

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If there is a horrible SM crash then a HPC will probably follow a year or two afterwards

Incidentally there is a theory that the SM crash of October 19, 1987 was actually caused by the Great Storm (remember that) which happened the previous week on October 15th. Many London stock brokers were unable to travel into London on Friday 16th to close their positions for the week and there was no trading in London on that day. When the rest of the world saw this there was panick selling everywhere.

Pray fro good weather.

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If there is a horrible SM crash then a HPC will probably follow a year or two afterwards

Incidentally there is a theory that the SM crash of October 19, 1987 was actually caused by the Great Storm (remember that) which happened the previous week on October 15th. Many London stock brokers were unable to travel into London on Friday 16th to close their positions for the week and there was no trading in London on that day. When the rest of the world saw this there was panick selling everywhere.

Pray fro good weather.

No no no no no no no, that wasn't the Great Storm that was the Big Storm. The Great Storm was when the snows came and almost brought the country to a standstill in the 1960's. Or was that the Big Snow?

On a less Diblian note, if history repeats the SM and HP crashes should follow in that order. '87 saw the 1st Great Crash follow on after about 18 months. This time the period is more truncated with a SM crash and the beginning of a HPC occuring more or less together. IIRC 1987 was caused by stocks becoming overvalued whereas this time around the stock PEs are quite tame compared with the scariest house prices ever known.

It has been reported today that the City banks are on a hiring freeze which will be a repeat of 1987 when thousands of City jobs were eventually lost which led to Great Crash 1 and devaststed house values with the bigest declines in London and the SE.

Edited by Realistbear

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http://www.thisismoney.co.uk/investing-and...mp;in_page_id=3

I'll have to agree with Martin Slaney that the removal of easy credit will have serious consequences on both markets.

For the FTSE the top of the market was at the turn of the century

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

It is possible to argue that we have actually been in a bear market since that date. The second lower peak we have seen recently was the second lower half of the 'double top' that usually indicates the start of the serious slow but remorseless decline that is the main concluding phase of a secular bear market.

http://www.thestockadvisors.com/main-secti...ller-waves.html

There are not many people in the City who have actually worked in this sort of environment since this scenario was last seen in 1973-74 . You can more or less ignore the blatherings of any financier or journalist under 50 as most have not got a clue about what is about to hit them. In this sort of environment even defensive plays and value stocks can get hammered as an atmosphere of hopelessness and despair takes hold. If you want to check out how bad it could get just look at the statistics on past crashes

http://ezinearticles.com/?Guide-to-Stock-M...s&id=127590

As you can see 1973-74 was far fom being the worst. You have been warned.

Edited by up2nogood

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Guest Bart of Darkness
No no no no no no no, that wasn't the Great Storm that was the Big Storm. The Great Storm was when the snows came and almost brought the country to a standstill in the 1960's. Or was that the Big Snow?

:blink: WTF?

Great Storm

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Coming next is tighter credit and just general losing of momentum in retail spending and house prices ushering in a global recession.

The US / UK + the rest of the West crash because we don't have cheap money. The East crashes because it then has no customers.

Stock markets worldwide will crash much further (<5000 FTSE soon for sure), house prices will crash, most other asset prices will crash.

It's the end of one era and the beginning of the next.

Edited by nowthenagain

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IMO both the SM & the HM are over valued, it would do us all a favour if they both fell to their true value, as it was before all this hyper speculation nonsense. ;)

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