Forum Archive Index - June 2002

["nick" <helmett@xtra.co.nz>]

     I  too am now nearly all cashed up and have been for a few months.  Its rather unfair to say the other Nick is too jittery for stocks,  There are many well respected analysts both fundamental and technical who are predicting a massive selloff in the dow and europe coming up.

          When the market is this nervous there will be opportunities and cash is the bast way to be able to take advantage.

   It would only take another terrorist attack (july4?) and the markets would tumble.  Added to that there is the very real likelyhood that the traditional october slump will arrive early this year due to the sept 11th effect.

      Add to this that P/E levels are still around 20 as profits are falling as fast as shareprices so that although stocks appear cheaper they are still overvalued.  Then there are accounting issues, flaky tech stocks and untold other issues.

       The NZ market has held up better than almost any market in the world but if the US really tanks we will follow. 

       Recent history has made us believe that any selloff is an opportunity to make a killing, this may well be a trap and this bear market could possibly last much longer than people imagine.  The terrorist threat is also worse than ever before, even Warren Buffet thinks a nuclear device will be detonated in america within 50 years.  All in all this could well be a good time to be on the sidelines.

      However a contrarian might well point to all this gloom and say now is the perfect time to buy. Trouble is you could of said the same in April and the same in May and still the markets fall.

The only people making money in this market are short term traders using hit and run techniques, with survival the key concern.

        If Nick (tennyson) is worried and cashed up then he may well have a greater grasp of the current environment than you give him credit for

 

 Nick (Ratkin, Lippy et al)