The Stock Market

[badge]

Sentiment Survey

Results Week ending 9/1/2010

Bullish 30.8%

up 10.1

Neutral 27.0%

down 2.8

Bearish 42.2%

down 7.3

Long-Term Average: Bullish: 39%

Neutral: 31%

Bearish: 30%

[Abrak]

Here are some very long term charts on the US markets.

First 10 year UST yields. Why everyone is jumping in is beyond me.

The mean is 4.69%.

The S&P500 yield. Again doesnt look great but the difference is as low as it has been since 1960. Before 1960 equities yielded more. Mean 4.36%.

There is a very good reason for this. Companies used to have a payout ratio of 80% and now it is nearer 30%.

You can see this in the PE (10 year MVA).

Mean 15.8x giving an earnings yield of 6.2%. You can also see the effect of a lower pay out ratio on earnings.

Flat earnings early in the century reflected high payouts. Notice though that earnings have already recovered. So that forecasts of say US$104 (which I saw recently) for 2012 are way off the chart. Even US$60 earnings though doesnt make the S&P500 particularly overvalued. You have to go back a long time to find the earnings yield double the UST yield.

Look at 2000 when the yield was 1.1% and 10 year bonds 6.0%.

It seems massively unlikely that the market will halve scenario will come true until the bond market crashes and say 10 year yields hit 7%. Dividends have already fallen 25% from their peak.

If UST yields continue to fall I would have thought people would start switching back into equities.

[BlackJack]

Andean gold mine just gold bought out by Goldcorp

the virtual drinks are on me

dont forget Kingsgate

in Thailand

go up as we speak

good luck all

[lannarebirth]

[

Also the fundamentals and valuations are so essentially 'boring'. The macro data might point to things slowing even a 'double dip' but it is not going to be exciting. That is because the 'boom' parts of the economy - car sales, new house building, commercial real estate remain depressed. At the micro level even once you adjust your numbers to reflect economic reality it doesnt really indicate the market is expensive or say the S&P should fall much below 900.

Bear markets are often simply incredibly boring for long periods of time. I am of the view that the US economy is looking increasingly like a '1% economy' (quite catchy that) whereby everything is basically 1% - growth, inflation, interest rates etc.

To me, short interest is a fundamantal. The interest on the short side (and yes I know there are many ways to skin that catL) looks lackustre. and to thikn that small level of shortcovering could proprl hte markrt significantly higher The much more cary fundamental I see margin debt.

[midas]

I found a Long Term SET Index chart too, incase anyone was interested

Knowing next to nothing about the SET, its traits or nuances, I would suggest some sort of correction may be on the cards soon(Im in good company on that Im sure ), but longer term it looks very constructive doesnt it, with 14-year highs very close. Perhaps 1100 +/- could even eventually warrant a visit?

Badge I have a question about your thoughts on the movement of SET – I am just curious because

i have a German neighbour who tells me every day about the SET performance.

Forgetting entirely about political risk or increasing bomb attacks and just concentrating on fundamentals, after falling to 400 in 2008 , what do you think is behind the strong movement up since June with out any real temporary pullback ? I mean its not as if anything that caused it to fall to 400 has been addressed or fixed in the global economy ?

And i look at the performance of Shangahai, Nikkei and think why in Thailand ? And Vietnam stock market is in a bear market.

The puzzling part was that I was reading comments on the Bualuang Securities website 2 months ago when SET was at only 820 and every day they were recommending people to SELL because they were expecting a “ significant correction “ . Even you thought there would be a correction and that made sense.

So my real question is at what point do people start saying SET is in bubble territory?

[badge]

I gave up long ago trying to explain market moves Midas; the market is unanimous and can do as it pleases.

All we know for certain, is that theres been more buyers than sellers on the SET.

As mentioned in my quoted post, I know nothing of the SET. The markets I follow corrected. Perhaps you should ask Abrak or someone who trades the SET, about the SET?

As also mentioned, feeding the sparse data I have into my model showed 1100 as the next possible area of reaction How it may arrive there I dont know. Other markets(BOVESPA, SENSEX etc) look close to new multi-year highs though and it would be awfully cruel if they didnt make them in my opinion, but markets are often cruel and more importantly Ive no firm idea what im talking about beyond europe

[ExpatJ]

I found a Long Term SET Index chart too, incase anyone was interested

So my real question is at what point do people start saying SET is in bubble territory?

Well it- the SET- may get there eventually- meantime foreign (and local investors) are pouring money in-. Myself and others on this board are making very nice profits on the SET (30% + return for me since january), ive never come across such a bullish market. For those of you in Thailand, get in there now, there is alot of money to be made still.

Why is the SET rocketing upwards?- from what i have read and seen:

1) Less attractive competition in the region - vietnam, Laos, Cambodia, Myanmar are all far more corrupt than thailand plus they have terrible infrastructure. Singapore, Malaysia very high labour costs.

2) Growing perception (incl. based on recent red shirt demos) that even if there is some political instablity - the thai baht and SET will remain strong.

3) A strong currency helps to create an impression/perception of a strong economy.

[BlackJack]

Panaust mine in Laos

Medusa in Philippines

Lynas in Australia

Kingsgate in THailand

all heading north

all aboard

[lannarebirth]

I found a Long Term SET Index chart too, incase anyone was interested

So my real question is at what point do people start saying SET is in bubble territory?

Well it- the SET- may get there eventually- meantime foreign (and local investors) are pouring money in-. Myself and others on this board are making very nice profits on the SET (30% + return for me since january), ive never come across such a bullish market. For those of you in Thailand, get in there now, there is alot of money to be made still.

Why is the SET rocketing upwards?- from what i have read and seen:

1) Less attractive competition in the region - vietnam, Laos, Cambodia, Myanmar are all far more corrupt than thailand plus they have terrible infrastructure. Singapore, Malaysia very high labour costs.

2) Growing perception (incl. based on recent red shirt demos) that even if there is some political instablity - the thai baht and SET will remain strong.

3) A strong currency helps to create an impression/perception of a strong economy.

I agreee with your sentiments about the SET. So why do you chooose to trade it while these Bullish conditions exist. Wouldn't buy and hold while cutting laggards and doubling up on winners make more sense? Just asking,

[ExpatJ]

I found a Long Term SET Index chart too, incase anyone was interested

So my real question is at what point do people start saying SET is in bubble territory?

Well it- the SET- may get there eventually- meantime foreign (and local investors) are pouring money in-. Myself and others on this board are making very nice profits on the SET (30% + return for me since january), ive never come across such a bullish market. For those of you in Thailand, get in there now, there is alot of money to be made still.

Why is the SET rocketing upwards?- from what i have read and seen:

1) Less attractive competition in the region - vietnam, Laos, Cambodia, Myanmar are all far more corrupt than thailand plus they have terrible infrastructure. Singapore, Malaysia very high labour costs.

2) Growing perception (incl. based on recent red shirt demos) that even if there is some political instablity - the thai baht and SET will remain strong.

3) A strong currency helps to create an impression/perception of a strong economy.

I agreee with your sentiments about the SET. So why do you chooose to trade it while these Bullish conditions exist. Wouldn't buy and hold while cutting laggards and doubling up on winners make more sense? Just asking,

Fair question. But i day trade to to try and ensure my money is in the stocks that are increasing most e.g. i have had TMB for 2 weeks- it increased nicely then stalled and looking at the charts yesterday they indicated that TMB was headed down so i sold (took 40,000 baht profit) and bought TRUE (whose charts indicated an upward price trend and whose price had dropped 15% in the last few days so i figured it was undervalued too) . After buying in the morning TRUE stock jumped 11.7% in price (up 64K baht) in one day while TMB went down. Bull markets dont last for ever, so sure you can make a good profit just buying and holding, but i try to make more by shifting from stock to stock trying to get the big price increasing ones....not always successful, but a fun hobby and lucrative in bull markets.

[BlackJack]

I found a Long Term SET Index chart too, incase anyone was interested

So my real question is at what point do people start saying SET is in bubble territory?

Well it- the SET- may get there eventually- meantime foreign (and local investors) are pouring money in-. Myself and others on this board are making very nice profits on the SET (30% + return for me since january), ive never come across such a bullish market. For those of you in Thailand, get in there now, there is alot of money to be made still.

Why is the SET rocketing upwards?- from what i have read and seen:

1) Less attractive competition in the region - vietnam, Laos, Cambodia, Myanmar are all far more corrupt than Thailand plus they have terrible infrastructure. Singapore, Malaysia very high labour costs.

2) Growing perception (incl. based on recent red shirt demos) that even if there is some political instablity - the Thai baht and SET will remain strong.

3) A strong currency helps to create an impression/perception of a strong economy.

I agree with your sentiments about the SET. So why do you choose to trade it while these Bullish conditions exist. Wouldn't buy and hold while cutting laggards and doubling up on winners make more sense? Just asking,

Fair question. But i day trade to to try and ensure my money is in the stocks that are increasing most e.g. i have had TMB for 2 weeks- it increased nicely then stalled and looking at the charts yesterday they indicated that TMB was headed down so i sold (took 40,000 baht profit) and bought TRUE (whose charts indicated an upward price trend and whose price had dropped 15% in the last few days so i figured it was undervalued too) . After buying in the morning TRUE stock jumped 11.7% in price (up 64K baht) in one day while TMB went down. Bull markets don't last for ever, so sure you can make a good profit just buying and holding, but i try to make more by shifting from stock to stock trying to get the big price increasing ones....not always successful, but a fun hobby and lucrative in bull markets.

i have never traded on the SET but I am convinced due to its prox to China and India the 2 greatest growth countries that its going north. My philosophy is to diversify and therefore this seems like a good vehicle.

I have no idea how to do it though. PM me if you can point me to the right DIY site please.

Having said that I am convinced that CP Group on the SET is a sustainable stock with a good dividend. It has been increasing each year and I see lots of upside.

[Abrak]

Badge I have a question about your thoughts on the movement of SET – I am just curious because

i have a German neighbour who tells me every day about the SET performance.

Forgetting entirely about political risk or increasing bomb attacks and just concentrating on fundamentals, after falling to 400 in 2008 , what do you think is behind the strong movement up since June with out any real temporary pullback ? I mean its not as if anything that caused it to fall to 400 has been addressed or fixed in the global economy ?

And i look at the performance of Shangahai, Nikkei and think why in Thailand ? And Vietnam stock market is in a bear market.

The puzzling part was that I was reading comments on the Bualuang Securities website 2 months ago when SET was at only 820 and every day they were recommending people to SELL because they were expecting a “ significant correction “ . Even you thought there would be a correction and that made sense.

So my real question is at what point do people start saying SET is in bubble territory?

Well the first part of your question is a very good one. How can the market go up in a straight line from its lows of 400 to over 900 without anything approaching to a decent correction? The answer is it shouldnt really - markets dont generally do that. It is very irritating. Rather like Bualuang I have been expecting (or hoping) for a correction since about 820 and it just hasnt happened.

When it comes to the fundamentals though it is rather different.

(1) First although the Thai stock market halved during the financial crisis it wasnt as though Thailand was suffering from the most of the problems that were in the US. There hasnt been the same sort of property bubble. There wasnt the same sort of indebtedness. The banks didnt go under or acquire huge bad loans. There wasnt a large and unsustainable fiscal deficit. There wasnt a large and persistent trade deficit. In fact, the financial crisis has largely highlighted Thailand's economic virtues and the USA's economic weaknesses. To some extent Thailand looks - especially in terms of self-sustaining growth - as the answer and not the problem.

(2)_ But the main point is really tied to valuations. When the SET fell to 400 it was on about 7.5x earnings. Now the US market got down to about 15x. Vietnam at its peak was about 72x while Thailand at the same time was on 8.5x. Markets that achieve ridiculous valuations always see them decline. (Thailand has been through this before - remember the peak of the market was Jan 6th 1994 at 1786.) Much the same is true about China that achieved very sexy multiples while at the same time had very debt/inflation driven growth fundamentals.

(3) What you are seeing now is a 'bull' market rather than a true 'bubble' market. Bubble implies unsustainable valuations while potentially valuations could say justify up to about 1500 in two years time relative to other markets. We see 'bull' market in terms of 'faith' in equities and in very high turnover but valuations are not overextended like at the top of a 'bubble'. Obviously Midas who would consider US valuations as 'bubble' could also justify Thai valuations of stocks as bubble I am simply talking on a relative basis.

(4) As for Lanna's point about 'why dont you pursue a 'buy and hold' based strategy?' this doesnt tend to work well in many Asian 'bull markets'. I should know it is my sort of strategy. What actually happens in Asian 'bull runs' is the markets tend to turn increasingly 'casino' whereby 'fundamental' stocks sort of hit a bit of a brick wall and 'spivvy crap' goes ballistic and volatile. The 'hit and run' traders, who know what they are doing tend to do very well while the holders of 'value' tend to 'not' see it rerated but underperform.

ExpatJ's approach I think is right for the current market.

[Abrak]

On perhaps a more interesting subject - I commented about 3 or 4 pages ago about how bond yields had fallen but the US market had not.

Badge posted this chart which shows it in a neat picture and called it 'an age old dichotomy.'

Why would stocks go down if 10 year bond yields fell? Well basically it would indicate falling 'real growth' and 'falling inflation' both of which would indicate that 'earnings' from stocks should be lower.

However there is another side to this equation which is that if bond yields are high we would expect a higher yield from stocks or vice versa. So if you look at the very long term charts that I posted above, you will see that in the '30 year bond bull market' for the first 20 years as yields fell on bonds, equities actually rose because it made their 'yield' look relatively more attractive. This is the complete opposite of what has happened in the past 10 years. In other words the age old dichotomy is more like a 10 year reversal.

Back in 2000 10 year bond yields were 6% and equity dividend yields 1.1%. Now it is more like 10 year bonds at 2.7% and equity yields at 2.1%. With DPS for the S&P500 already down from US$28 to US$22 and EPS at US$61 forecast to go much higher but not likely to, the dividend of equities is unlikely to fall and you have virtually reached the stage where you have to assume no inflation, no real growth in GDP over 10 years to justify preferring bonds over equities.

In other words if bond yields fall further due to deflation economic weakness you are likely to see that the equity yield will justify equities being cheap (especially as you could buy back stock or refinance debt.) If yields rise then equities look cheap because it should reflect rising inflation/growth which would enhance earnings growth and dividend growth.

Bottom line is that the last 10 years which has maintained 'bull' USTs and 'bear' equities is very close to its end. Actually I believe stocks would do best if bond yields continue to fall. Almost certainly you are going to see a reversal of 'faith' in USTs against the 'lack of faith' in equities in the US.

[midas]

Badge I have a question about your thoughts on the movement of SET – I am just curious because

i have a German neighbour who tells me every day about the SET performance.

Forgetting entirely about political risk or increasing bomb attacks and just concentrating on fundamentals, after falling to 400 in 2008 , what do you think is behind the strong movement up since June with out any real temporary pullback ? I mean its not as if anything that caused it to fall to 400 has been addressed or fixed in the global economy ?

And i look at the performance of Shangahai, Nikkei and think why in Thailand ? And Vietnam stock market is in a bear market.

The puzzling part was that I was reading comments on the Bualuang Securities website 2 months ago when SET was at only 820 and every day they were recommending people to SELL because they were expecting a “ significant correction “ . Even you thought there would be a correction and that made sense.

So my real question is at what point do people start saying SET is in bubble territory?

Well the first part of your question is a very good one. How can the market go up in a straight line from its lows of 400 to over 900 without anything approaching to a decent correction? The answer is it shouldnt really - markets dont generally do that. It is very irritating. Rather like Bualuang I have been expecting (or hoping) for a correction since about 820 and it just hasnt happened.

It wasn't so much that it did this - i.e. go up almost vertically but that

it started just one month after the capital city was literally a war zone - it is the speed

at which all this has happened which surprised me.

When it comes to the fundamentals though it is rather different.

(1) First although the Thai stock market halved during the financial crisis it wasnt as though Thailand was suffering from the most of the problems that were in the US. There hasnt been the same sort of property bubble. There wasnt the same sort of indebtedness. The banks didnt go under or acquire huge bad loans. There wasnt a large and unsustainable fiscal deficit. There wasnt a large and persistent trade deficit. In fact, the financial crisis has largely highlighted Thailand's economic virtues and the USA's economic weaknesses. To some extent Thailand looks - especially in terms of self-sustaining growth - as the answer and not the problem.

Ok but what exactly are the commodities or goods that are being exported that is giving

Thailand such a competetive edge and to which countries exactly are these goods going ?

And how can exports grow with a such a strong baht when Japan has quite the opposite problem

with its very strong Yen ?

We know that the tourist industry hasn't recovered because many hotels still have very low

occupancy rates. I know someone who works at Dusit on Koh Chang and last weekend they had only 4 guests !

(2)_ But the main point is really tied to valuations. When the SET fell to 400 it was on about 7.5x earnings. Now the US market got down to about 15x. Vietnam at its peak was about 72x while Thailand at the same time was on 8.5x. Markets that achieve ridiculous valuations always see them decline. (Thailand has been through this before - remember the peak of the market was Jan 6th 1994 at 1786.) Much the same is true about China that achieved very sexy multiples while at the same time had very debt/inflation driven growth fundamentals.

(3) What you are seeing now is a 'bull' market rather than a true 'bubble' market. Bubble implies unsustainable valuations while potentially valuations could say justify up to about 1500 in two years time relative to other markets. We see 'bull' market in terms of 'faith' in equities and in very high turnover but valuations are not overextended like at the top of a 'bubble'. Obviously Midas who would consider US valuations as 'bubble' could also justify Thai valuations of stocks as bubble I am simply talking on a relative basis.

No that is not quite right- i have never said that. What i keep asking ( and many others are asking the same

is who exactly is buying ?

http://www.zerohedge.com/article/jim-rickards-tells-his-clients-get-out-stocks-and-discusses-feds-final-golden-bullet

(4) As for Lanna's point about 'why dont you pursue a 'buy and hold' based strategy?' this doesnt tend to work well in many Asian 'bull markets'. I should know it is my sort of strategy. What actually happens in Asian 'bull runs' is the markets tend to turn increasingly 'casino' whereby 'fundamental' stocks sort of hit a bit of a brick wall and 'spivvy crap' goes ballistic and volatile. The 'hit and run' traders, who know what they are doing tend to do very well while the holders of 'value' tend to 'not' see it rerated but underperform.

ExpatJ's approach I think is right for the current market.

[Abrak]

No that is not quite right- i have never said that. What i keep asking ( and many others are asking the same

is who exactly is buying ?

Well really Midas it comes down to human psychology and 'faith'. Throughout this thread you have indicated that the US stockmarket should go down because of an increasing 'lack of faith' in equities - that people have been burnt and wont be coming back. It is known as 'fear' it really has nothing to do with underlying fundamentals.

At the other end of the scale you have all these Thais who see the market going up everyday. They get nothing for their savings on deposit. They can get much better yields in the market. But really that is beside the point because they are comparing 1% annual yields with a market that goes up 5% a month. So are you surprised that they start thinking they are missing out. If they are fundamental they might think why not take a 6% yield than 1% in the bank - if they are not they think I can make more money in a week than in a year. It is known as 'greed'. So dont be surprised if they have more 'faith' in the market and pile in and it goes up.

You also have a serious liquidity issue so Thailand is struggling to avoid a bubble. And you will know that the underlying answer to your question 'who is buying?' is that the market peak of a bubble market is when the answer is 'everyone'.

Edited September 7, 2010 by Abrak

[midas]

No that is not quite right- i have never said that. What i keep asking ( and many others are asking the same

is who exactly is buying ?

Well really Midas it comes down to human psychology and 'faith'. Throughout this thread you have indicated that the US stockmarket should go down because of an increasing 'lack of faith' in equities - that people have been burnt and wont be coming back. It is known as 'fear' it really has nothing to do with underlying fundamentals.

At the other end of the scale you have all these Thais who see the market going up everyday. They get nothing for their savings on deposit. They can get much better yields in the market. But really that is beside the point because they are comparing 1% annual yields with a market that goes up 5% a month. So are you surprised that they start thinking they are missing out. If they are fundamental they might think why not take a 6% yield than 1% in the bank - if they are not they think I can make more money in a week than in a year. It is known as 'greed'. So dont be surprised if they have more 'faith' in the market and pile in and it goes up.

You also have a serious liquidity issue so Thailand is struggling to avoid a bubble. And you will know that the underlying answer to your question 'who is buying?' is that the market peak of a bubble market is when the answer is 'everyone'.

No that was in response to your comment " Obviously Midas who would consider US valuations as 'bubble' "

so i was only referring to the US markets when i asked who is buying.

Jim Rickards says it this way :-

" If you no longer invest in stocks, you are not alone: "I don't even take the stock market seriously" says Rickards, "and I mean that in all seriousness. Who's in the stock market right? You have indexers and robots. Is anybody else trading the stock market?" Obviously, that is a rhetorical question."

http://www.zerohedge.com/article/jim-rickards-tells-his-clients-get-out-stocks-and-discusses-feds-final-golden-bullet

[midas]

No that is not quite right- i have never said that. What i keep asking ( and many others are asking the same

is who exactly is buying ?

Well really Midas it comes down to human psychology and 'faith'. Throughout this thread you have indicated that the US stockmarket should go down because of an increasing 'lack of faith' in equities - that people have been burnt and wont be coming back. It is known as 'fear' it really has nothing to do with underlying fundamentals.

At the other end of the scale you have all these Thais who see the market going up everyday. They get nothing for their savings on deposit. They can get much better yields in the market. But really that is beside the point because they are comparing 1% annual yields with a market that goes up 5% a month. So are you surprised that they start thinking they are missing out. If they are fundamental they might think why not take a 6% yield than 1% in the bank - if they are not they think I can make more money in a week than in a year. It is known as 'greed'. So dont be surprised if they have more 'faith' in the market and pile in and it goes up.

You also have a serious liquidity issue so Thailand is struggling to avoid a bubble. And you will know that the underlying answer to your question 'who is buying?' is that the market peak of a bubble market is when the answer is 'everyone'.

No that was in response to your comment " Obviously Midas who would consider US valuations as 'bubble' "

so i was only referring to the US markets when i asked who is buying.

Jim Rickards says it this way :-

" If you no longer invest in stocks, you are not alone: "I don't even take the stock market seriously" says Rickards, "and I mean that in all seriousness. Who's in the stock market right? You have indexers and robots. Is anybody else trading the stock market?" Obviously, that is a rhetorical question."

http://www.zerohedge.com/article/jim-rickards-tells-his-clients-get-out-stocks-and-discusses-feds-final-golden-bullet

[teletiger]

Retail is day-trading beside the exit. The rest is HFT bots playing with each other. The Fed prints, Wall St buys. Show the world that The USA is back! Look at that market! Problem is....nobody is falling for it. Doesn't mean it won't get pushed up to 20,000 though.

Regards.

[midas]

Wall Street Firms to Cut 80,000 Jobs in 18 Months, Whitney Says

According to Meredith Whitney,Wall Street faces the departure of about 80,000 staffers, or 10% of all, within 18 months, not to mention a major drop in Wall Street compensation. The reason is the same as the one we pointed out earlier: slowing revenue growth, primarily due to the complete collapse in trading volumes, as computers have used their binary elbows to push everyone else out of the markets, and with Wall Street's primary revenue model now being exclusively reliant on trading, this is equivalent to a partial extinction event as many trading firms will have to close. This also means that the New York City economy is facing another major solvency crisis as tax receipts are sure to plummet.

http://www.bloomberg.com/news/2010-09-07/wall-street-firms-will-cut-up-to-80-000-jobs-over-18-months-whitney-says.html

[Abrak]

Jim Rickards says it this way :-

" If you no longer invest in stocks, you are not alone: "I don't even take the stock market seriously" says Rickards, "and I mean that in all seriousness. Who's in the stock market right? You have indexers and robots. Is anybody else trading the stock market?" Obviously, that is a rhetorical question."

http://www.zerohedge.com/article/jim-rickards-tells-his-clients-get-out-stocks-and-discusses-feds-final-golden-bullet

Ok I get your point. Why would anyone invest in stocks currently?

Well to give you an example, I saw on Bloomberg yesterday that Johnson & Johnson stock is currently yielding 3.66% and they just issued a 10 year bond at 2.95%. Now in order to pay that dividend, it has to come out of 'post tax' income and must have a degree of coverage. So (and I am guessing) the pre-tax earnings yield on J&J must be of the order of about 10%. Now with an ability to borrow at 2.95% and an earnings yield of around 10%, you would be crazy not to buy back stock. USing the bond moneys to buyback say 10% of stock would enhance earnings on the balance of stock by 7% given unchanged earnings.

You can see this in a different way with Vodafone - yield of 4.4% - that is selling assets to create proceeds to buyback stock (presumably because it already has sufficient leverage). Or by the pick up in debt financed acquisitions whereby bond yields are so low it makes sense to buy equity. At the end of the day, given current bond/equity yields noone needs Joe punter to buy equities because you simply issue corporate bonds and buy equities yourself. Look at the pick up in M&A.

[teletiger]

Everyone (with) is hoarding cash.

Regards.

[lannarebirth]

In the immortal words of Bob Dylan.

"It's not dark yet, but it's gettin' there."

Edited September 8, 2010 by lannarebirth

[midas]

You can see this in a different way with Vodafone - yield of 4.4% - that is selling assets to create proceeds to buyback stock (presumably because it already has sufficient leverage). Or by the pick up in debt financed acquisitions whereby bond yields are so low it makes sense to buy equity. At the end of the day, given current bond/equity yields noone needs Joe punter to buy equities because you simply issue corporate bonds and buy equities yourself. Look at the pick up in M&A.

Ok and then the likes of CNBC and Bloomberg will no longer need to look at trying to suck in the dumb money

[midas]

Retail Capitulation: Stock Outflows Surge By Over $7.5 Billion In 18th Consecutive Week Of Record Stock Market Boycott

In the week ended September 1, domestic equity mutual funds saw $7.5 billion in outflows: the biggest one week outflow in 2010 since the $13.4 billion redeemed in the Flash Crash week. The trend developing is simple: retail investors withdraw increasingly greater numbers in weeks in which the market is down even a little, and withdraw just a little in weeks in which the low-volume melt up presents them with an opportunity to get out at a better price level. Of course, the common thread is that as we have said for 18 consecutive weeks, retail just wants out. And now that, courtesy of Mary Schapiro, retail has finally put two and two together, and knows that even the regulators are concerned about redemptions, which are perceived by the SEC as being a function of distrust in market structure, we now fully expect more and more redemptions.

Edited September 9, 2010 by midas

[lannarebirth]

6 point drop in the last 30 seconds of S&P futures trading yesterday. That's pretty unusual and perhaps forboding. That, or my charts are screwed up.

[BlackJack]

if anyone is trading on the SET can they PM me or post here what system or broker they are using

also suggest the rare earths are worth a serious look as demand is rising due to the new green technologies being forced upon the World.

thanks

[ronz28]

An ETF of Thai stocks, THD hit the top of its regression channel and might be correcting to its 200 day SMA. I haven't held or shorted it currently or in the past but noticed it this morning so thought I would mention it.

[badge]

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/13_Incredibly_Important_Chart.html

Not sure how accurate the data is

[badge]

Longer term US bear view

http://dshort.com/charts/Kimble/Dow-100915.gif

[badge]

Sentiment Survey Results as of 9/15/2010 The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.

Last Week's Results

Sentiment Survey

Results

Week ending 9/15/2010

Bullish 50.9%

up 7.0

Neutral 24.9%

up 0.3

Bearish 24.3%

down 7.4

Long-Term Average:

Bullish: 39%

Neutral: 31%

Bearish: 30%