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Pointyfigures

1,659 Posts.

2421

21/03/20

12:43

Post #: 43620009
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Originally posted by Dr.Who: ↑

You are clearly rattled syndey to continue with the snide remarks.

We all have opinions, and Doc has plenty of well-researched opinions. One is: it is the style of an investment amateur to draw a conclusion on an overnight movement. Two, it is a trait of a person that lacks self-confidence to continually throw barbs, in your example it is probably related to inferiority complex.

Now Doc did not say it will make new highs this quarter (which isn't over yet) or next quarter. Doc actually said this quarter and most likely next quarter will be a big hit to earnings (or words that effect) but markets will make new highs this year 2020 (granted didn't explicitly say calendar year but for most that would be the conclusion if omit the FY before this year).

In Doc's view there is only one scenario where new market highs this year will not occur and that is if the virus is not seen to be under control and declining by September.

The reason Doc is so confident? Very simple, funds, pensions, everyone will be looking for the best return and it can only come from company cash flows. No other asset class will shine a light to equities after the fear has turned, due to ultra-low interest rates.

Those company cashflows will be gushing on the back of money flowing through the economy from stimulus, from very poor profits this year to record profits next year for solid companies. And all those company cashlows are due to people working and having money to spend - the virtuous cycle.

Opportunities are approaching that only come along once or twice in lifetime. When this market turns it will run up hard and fast like never before. Doc assumes there is ample cash on the sideline just waiting to flow back into equities - for good reason, that is where the cashflows will come from in 12 months time. And markets, of course, are forward thinking. Just a game of cat and mouse at the moment waiting for a sign that the virus is retreating.

As for debt, you keep freaking out over it. Those that understand such matters are relaxed, knowing that governments theoretically can inject limitless funds into an economy through a range of instruments to keep people in work producing the goods and services we all need. The natural constraint is inflation, too much money chasing too few goods and services. That clearly is not a problem and likely will not be in the future. Why? Modern management technique and technology has exponentially raised the efficient in producing goods and services - we have the means to produce what is needed and can ramp up very quickly.

Sovereign debt it little more than a recording system. Ceilings can and do extend upwards as required and that has to be good - it is not a rescue it is part of the system that has enabled humans to improve there standard of living year on year and it will continue to do so.

At the end of day does it really matter if one has a view that businesses are held up on crutches by governments? They ar eno tby the way but does it matter if they were?

The only thing that matters is you and I can have a reasonable standard of living: shop for a range of goods, kids go to school, enjoy leisure time and ll other facts of life.

You lot live a life of fear and misery waiting for the big implosion. Average Joe on the street couldn't care less if the budget deficit is xxx and the balance she is trillions of dollars. If life is reasonable then what does it matter? It can be argued whatever the government is doing is working where the majority of a population lead a fulfilling life.

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Hi Doc
Here is my CONSERVATIVE counter prediction.
In 6 months time:
Minimum 20% unemployment
Housing prices down at least 30%
Inflation at least 10%
Markets minimum time to recover - 5 years.
Electricity prices down 25%
Super funds able to be drawn down if over 40 or over $500,000. Might even be mandatory.
Ask Zimbabwe, Venezuela or Argentina the cost of printing money.
I suspect you are quite young, having never seen high unemployment, a recession or high inflation.
Otherwise you would remember the causes.
There will be sectors and industries to invest in, even now and not just gold.
All comes down to timing.
14 Upvote

2 Great analysis

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