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whateverpedia

Bigger than Brexit

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As we all saw, the Brexit result sent a collective shiver through world financial markets. The signs are showing that that was just a rehearsal.

 

Today the Australian stock market (as measured by the All Ordinaries index) fell by 1.94%. The Japanese market (Nikkei225) is down 5.6%.

 

On the futures market, the Dow Jones Industrial index is down around 5%, as are the S&P500 and Nasdaq futures. European markets are looking at similar falls.

 

Fasten your seatbelts.

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Losers sell when the market tanks, winners buy.

 

The easy money is looking for businesses with a solid history of gains and no recent negative media for the brand that have dropped simply because of mass panic across the board. Example, say Coca-Cola dropped 5.6% like the majority of stocks on a day/week, buy, buy, buy... because odds are the stock price is going back up as soon as the folks freaking out forget why they were freaking out.

 

Decent gains on quarterly reports also make the sheeple freaking out buy back into a stocks.

 

The stock market always rebounds. 

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The stock market always rebounds. 

 

Eventually.

 

But yeah, I get your point. I'm not going anywhere hence my "fasten your seatbelts" comment.

 

I've got a sizable chunk of cash waiting to be put into the market to catch the next bull run. I'm in no hurry to spread it around at the moment though. By January - March when companies start reporting again it'll become more apparent where the winners are, and I suppose just as importantly, where the losers are.

 

However you're blind optimism is a bit disconcerting. There are a lot of uncertainties at the moment, and the one thing the market does not like is uncertainty. As I take a long term approach to my holdings, there's no need to rush back in at the moment. Why pick up a bargain tomorrow when it's going to be cheaper next week, even cheaper next month, or even cheaper next year.

 

I'm fully aware of the concept of dollar cost averaging, but if the market reacts like it did in 2008 (after 8 years of strong performance we're overdue for a correction), you might be buying all the way to the bottom. Remember, the market can remain irrational far longer than you can remain solvent.

 

And as the old saying goes, patience is a virtue

 

because odds are the stock price is going back up as soon as the folks freaking out forget why they were freaking out.

 

Providing of course that the reason that caused them to freak out IS forgotten. If people keep having their noses rubbed in that reason, it's going to take some time for them to forget.

 

How long that is, no-one knows. Anyone who claims that they do know is only deluding themselves. That point again, the market can remain irrational far longer than you can remain solvent.

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Having had another think about things:

 

If President-elect Trump is successful in imposing a 35% tariff on goods imported from China, Walmart could be a good short selling/put option opportunity.

 

He's also threatened to force Apple to make all their gear in America, another possible short/put opportunity.

 

Same with Ford if he makes good on his promise to make them shut down their plant in Mexico and move it back to America.

 

Hmm.

 

Of course these are all short term trading opportunities, not investment strategies.

 

Hmm.

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Having had another think about things:

 

If President-elect Trump is successful in imposing a 35% tariff on goods imported from China, Walmart could be a good short selling/put option opportunity.

 

He's also threatened to force Apple to make all their gear in America, another possible short/put opportunity.

 

Same with Ford if he makes good on his promise to make them shut down their plant in Mexico and move it back to America.

 

Hmm.

 

Of course these are all short term trading opportunities, not investment strategies.

 

Hmm.

I wouldn't bet on any of that.

 

If the Bill is proposed, that's different. Also consider the process involved in making any of those proposed changes into a law.

 

Action > Words. Also, think carefully about the source.

 

Investing in this person's ideas has not historically worked out.

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However you're blind optimism is a bit disconcerting. 

 

 

Lol, don't be so gloom. 

 

Like old Warren Buffet once said, place all bets the world will never end and If it does nobody will be around to collect, so who cares.

 

Doesn't look like the sky is falling today.

 

 

 

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Doesn't look like the sky is falling today.

 

 

True enough. My post was made hours before the US markets opened and according to the futures market, it was poised to get hammered. All information was correct at the time of publishing.

 

Life goes on. And on.

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True enough. My post was made hours before the US markets opened and according to the futures market, it was poised to get hammered. All information was correct at the time of publishing.

 

Life goes on. And on.

 

 

Like I said, a large percentage drop across the board is good news when buying into a business/stock with a solid history and no recent negative media on the brand. Look at why a stock drops, If it doesn't make sense (mass panic caused by media) then it's time to jump into the stock before it bounces back. 

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Like I said, a large percentage drop across the board is good news when buying into a business/stock with a solid history and no recent negative media on the brand. Look at why a stock drops, If it doesn't make sense (mass panic caused by media) then it's time to jump into the stock before it bounces back. 

 

Along with that, another technique is to find solid, growing companies that have been ignored by the market in favour of more "sexy" companies. The returns from those have been spectacular when the rest of the market "discovers" them and money floods towards them.

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