Monday 6 August 2007

Poll Results - Go short on stocks and shares

This weeks poll was on where all my canny readers (that's you, if you voted) thought the FTSE 100 would be by September 1st. The results are as follows:

Over 6500
4 (21%)
6000 ish
9 (47%)
less than 6000
4 (21%)
Less than 5500
2 (10%)

So overall it seems as if people are a little cautious about prospects for the market at the moment, with the majority going for a slight fall to around 6000. This closely mirrors the fall in the actual market this week.

So if you are going to invest, it would seem that you might save your shirt by going short on shares rather than just buying in.

However, I was in the 21% who voted for under 6000. if things carry on this month with continuing low volumes and falls in the Dow Jones and NYSE on fears of the US mortgage market failure, then the 'floor' of 6000 is in danger. We have already seen a 400 point drop in the last month.

Add to this that September is historically a terrible month for investors (see 1929 and 1987), because a lot of long-term investments have to be renewed then by the Institution's like pension funds. If these risk averse institutions see weakness in the stock markets then they switch their investments into Government treasuries and bonds; by taking money out of the main market the share prices can suffer huge corrections and a bear market sets in.

Anyone out there still a bull or are we all bears now?


pommygranate said...

Slicker - i'm a medium term bull. This is a healthy correction of an overheated market. But the fundamentals are still roaringly strong. Protectionism is still a dirty word (though gaining popularity in the US, sadly), China and India are still firing on all cylinders, rates are still low (tho they will have to rise, possibly to 7%) and earnings are still strong.

Finally, and most importantly, at a forward PE of 12x, the FTSE is very fairly priced. Stay out during September and then dive back in in October.

Anonymous said...

Getting on in years so i use the National Savings vehicle for my investments.

Boring but sound and i can sleep at night!

Interest rates are on the up so doing quite well.

James Higham said...

I'll bear all this in mind, CUS, when I make my first thousand.

CityUnslicker said...

Pommy - Interesting to hear that, I was at lunch with people today who were looking forward to the credit crunch and bear market for all the opportunities it would provide for them.

Nice to see a Bull out there and your position re the 12x ratio i sound.

How will corporate profits hold up though as the interest rates increase on all their debt?

CityUnslicker said...

Ken - Safety first and you will always make some money that way.

Lordy - a BEAR eh?

Newmania said...

Hmmm. Peeks head around corner and decides he will look stupid if he says anything

tip toe away.....

CityUnslicker said...

Don't be silly N. I am far more frightened at yours sir!

Steven_L said...

I voted 6000ish.

I hope I'm right and you're wrong, not because I own shares, because I'm human.

Steven_L said...

What's this bear market stuff then? Short sellers?

I shared a bottle of some rather nice Kiwi wine down Harry's bar in Mayfair once with a, let's say well off, short seller I met on a train when I lived in London.

I must admit, having drank in the city before, I much prefer these Toff aristo short-sellers than the rude wankers you meet in that indoor market thingy (what is it Leadenhall or something).

I hope they do make some cash, they are polite.

pommygranate said...

How will corporate profits hold up though as the interest rates increase on all their debt?

What debt? Corporate balance sheets are the most underleveraged for decades. that's why the private equity guys are bidding so high!

Wolfie said...

I'm Bearish for the short-term but I think there will be a reprieve after that, I wouldn't call it a correction exactly. More an early warning tremor of "Christmas Bear to come".

Sackerson said...

Have a look at Brad Setser's recent report to Congress. I have no idea what will happen by Christmas, but at some point soon it's either a slowdown or a crash.

Anonymous said...

I agree with Wolfie. All that liquidity currently being squeezed out of home building, bond funds, mortgage companies etc in the US will be desparately looking for a new home. Some of it will end up in the UK causing shares to rally in the short term. But not for long. The economic situation in the US will hit everyone. Where the market will be at the beginning of September is not nearly so important to where it will be at eoy.

People talking about the sub-prime calamity in the US are consistently forgetting something. The only reason these debts turned sour is because LARGE NUMBERS OF US CITIZENS CAN NO LONGER PAY THEIR MORTGAGES!!!!

Now you can say to me "Oh, but US employment numbers are quite good - I don't see a big problem here" but the fact is that welfare is so poor in the US that people don't go unemployed - they lose their well paid job and start working behind the counter at MacDonalds. Not to mention the fact that the US government is desperately expanding the public sector to keep people off the register. In the end there are fewer people in real wealth creation in the US and we are going to see that in the numbers in the next quarter. The US is headed for a major recession, and when the US catches a cold the rest of us go down with flu.

China and India firing on all cylinders? Well they only sell to the US so how are they gonna manage that when Uncle Sam can't pay its own bills?

Forward PE of 12x? Well stop extrapolating the graphs - they have a tendency to unravel when a major market correction is taking place. And trillions of dollars of debt unravelling is just the kind of market correction that will unravel those healthy PE ratios.

The only question is just how big is the slump going to be. I'm betting on late 70s size but some are predicting 30s style global disaster and I can see where they are coming from (in which case a small farm, fully paid for and some shotguns and ammunition might be a better bet!).

CityUnslicker said...

some great stuff here by all. very inciteful.

if only we could all predict the markets I guess we could blog full time....

Anonymous said...

Interestingly, the price of farm land has been rising significantly over the last year despite the price of farm produce continuing to fall. It seems that more people are interested in getting their hands on the means of food production - with city types being in the vanguard. I wonder if the demand for shotguns has increased too?

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,