Muhaha ,

I think the market is a bit more sophistcated than that. The market swings are exacerbated by short sellers and deriviatives: futures, hedge funds, CFDs for that matter.

So what we get is a lot of noise as the peaks and troughs are accentuated. Which can overvalue holdings but also throw up some good buying opportunities. But you need to take a view on the market to be successful. No point in buying cheap today if it is much cheaper in a month's time.

B.

The current market is priced to perfection .
Any company that would report at the lower end of the expectation to perfection will be canibalized .
In general , we have got no reliable tool , to predict the less than TEN performers , but very well aware , that several stocks in our fortfolios could suffer a set back . It won't move me from my LT stance .Perhaps it would encourage me to top up .
Meanwhile I have topped up ARP at $3.80...cheers eG

Zugzwang rules?!

A word my son uses soemtimes. He is studying German and has told me it means a situation where the rules state you have to do something even though you will be worse off. Does it apply in this market?

Don't know but even if you do nothing you're doing something. i give up. Just too hard. I'm going to get some fish and chips and a six pack of Carlton Cold for dinner, sit on a park bench somewhere and brood (Zugzwang!) Family will just have to look after themselves tonight.

Hey Judd , philosophically NOTHING is also SOMETHING . Isn't that "nothing" with fish n chips n beer is the real something ? cheers eG

6000 in my books was supposed to reach towards 30/06/2007 .
It has reached this milestone in mid feb 2007 . Thje earning are too high to ignore . The FA suggest we are going further and higher ...cheers eG

Too hot?

my shares are still in last year may's level, I must be a very bad stockpicker, but won't worry me too much, share price is either up or down.

I've been wondering whether the June 30th cut off this year,
for large tax advantaged contributions to superannuation, might see fund managers awash in cash, desperately needing to offload it into the market. If so, this would help prop up the market and buffer any corrections, right through to end July. But how do you quantify this effect against the usual seasonal waves of sentiment in the first half?

PER valuation of the overall market remains reasonable, certainly nothing like the dot com era. And there was no minerals bull around in that era.

The strategy I've arrived at is - try to stay calm, and make stock specific decisions. I see the first half 2007 as a stockpickers and portfolio investors market, with superannuation inflows providing a cushioned landing for any stumbles.

south

a lot of the gain has been just in holding quality stocks and watching them go up. There is not actually a lot of skill in this.

my best performing portfolio has been the SMSF with the most boring shares imaginable, CBA NAB CNP WDC WHF WES etc. My after tax gain on this in the eight months since June last year is 21%.

My non-super portfolio has not done all that well. Most of my small industrials have gone down not up. I am still holding shares like FUN and SYM which I have a paper loss on.

I think this has been the year of the blue chip which is why many of our conservative members have done so well. Other years will see other sectors boom.

sockeye

yes that is a really good point. there will be a lot of people trying to take advantage of the one off one million contribution and this will add up to a lot of money pouring into the market. We may be seeing this already with the price rises of quality stocks.

Even after June this year the $150k per person per year contribution could see a lot of money still looking for shares to buy. For a SMSF in particular, shares are much easier than property, especially as super funds are not allowed to borrow, so property cannot be negative geared within the fund.

The demise of the surcharge and the RBL will also result in more funds coming in, even without the effect of the tax free status of the retirement income. For the first time in years, it is actually attractive for people with spare income to put it into super as salary sacrifice.

Will all this prop up the market. I think it will. I think the end result will not be a stockmarket crash, but a huge round of capital asset price inflation, so you need more and more money to gain the same retirement income.



Cheers

LJ

Lainie Jean

Will all this prop up the market. I think it will. I think the end result will not be a stockmarket crash, but a huge round of capital asset price inflation, so you need more and more money to gain the same retirement income.

If the scenario of both sokeye and LJ eventuates the market will CRASH because fundamentals would not support the soaring assets .
The treshold should be this : ASX200 not to pass its projected FY2008 of gradual movement from PER 14.5 towards 17-17.5 by 30/06/2008 .
as long as this model is adhered to do not expect crash but do expect a few mini corrections

Remember that crashes are the end results of IRRATIONAL EXUBERANCE when values of assets are way higher and beyond their intrinsic value , which correlates to a reasonable rate of return .

Remember that the inverse of PER is basically the ROR . At 17.5 PER the ASX 200 would return 5.71% . That is with at least 20% risk premium embeddded into it ( equals to 30 year Bond rate of 4.60% ) .

Now if the high GROWTH rate of earnings would not abate , projected EPS will be upgraded , and PER is further reduced . This will push the equities in the ASX200 higher no doubt .

Severe Corrections ( not technical one which are based on TA ) can happen due to FORCE MAJOR like Tsunamies , terror , Hedge funds financial gigantic wrong punting , severe wars that potentially can spill from being localized to something broader and more complexed , sudden civil commotionin major economy ( such as Russia, India and God forbid China ).

We have to realize that Severe Corrections can occur at any given minute , and they are outside managements agendas .

I hope I did not weary U too much here .
Have a nice weekend ...cheers eG ]

For me, it is all about what the general public is talking about.

And guess what, they are talking about shares and easy money to be made.

If we are not near a top we are mighty close.

When compulsary super came in,and salary sacrifice became flavour of the month I started to get a feeling of disquiet in the whole super scene.
Withl the money pouring in increasing every year I can't help wondering if there is going to be a lot more cake to go around,or the same "cake",with each sliceeventualy costing more and more,thus meanig that in the end those on the lower rung will still be no better off.
Just the pessimist in me,I suppose.
By the way,Mrs Typehigh loves term deposits high interest online a/cs,hates shares "Knew someone who almost lost money in shares 50 YEARS AGO.
Her method of picking?A good one which will go up.
That is why our 2 main ones are WOW and MBL,as far as capital growth.
I also still have FUN @ an average of $1.63,mainl y kept for FF DIV.
Have you looked at FUN this morning L.J?
I have also noted the number of courses being touted at the moment,also the fact nothing is about to change "as this time it is different"
Brian

Brian

I am hoping I may actually get my money back on FUN. Possible takeover or more likely a private equity buyout.

They released profit guidance in Novemeber, but they are ominously silent about Xmas trading, so we can assume there was no pick up in revenue.

We are tentatively adding a bit more than the legal minimum into super now that the surcharge and the RBL are gone, but I am still very wary of it. The rules can change, but once you put money in, you can't change your mind. We still have quite a few years to go before the income is tax free, it will be interesting to see what the rules are then. It seems a bit pointless making decisions now on how we will deal with it at that time.


Cheers

LJ