a rough ride this year, page-3

Morning,

"Where are the markets going?"
- My guess is if we knew that for sure we would not read hc.


"The stimulas packages have finished and governments are riding on debt."
- Not quite correct - Aust. has only spent half of what it allowed - the other half is still to come. And imo should probably be pulled back at least a bit. Nothing wrong with putting a bit of powder back in the locker.


"Be careful in this market we all know what happened last year."

- a classic trap for young players. After an extreme negative event - people for quite a while measure the odds of another extreme negative event as greater than it's probability. In fact after an extreme negative event - the chances of another immediate one are lower, not higher.
This is exactly why people miss out on the first up leg of a new rally, they are stuck with the illogical fear and fail to see the fundamentals.

Now for those who look to the 1930's for similarities - sorry, there are none. The stimulus packages that were explosively released after the gfc have changed the ball game ----- so much so that you cannot predict from the past (not that you ever could) what will happen.

We appear at this point to be experiencing nothing more than a perfectly normal correction with a lot of evidence hinting that the correction is running out of puff.
I am not saying that for sure this is what is happening as I think prediction is dodgy at the best of times - but without another extreme event outlier (remember the probability is less now) - it looks to me like things are somewhat back to normal. Normal being anything but extreme events.

For me - bull runs are great, but I ain't going to complain if we have a decade of trading range - you can make great fortunes in either. You just have to get out of the old buy and hold ideas - we really have moved on from this - quite a while back actually.

If you want to work it out - read long term stuff, avoid 'news' and go fishing and think it through yourself. Treat financial planners like you treat second hand car salesmen (apologies to car salesmen). Also, cut out economists and analysts articles and paste them into the cartoon page - where they truly belong.

Have a good day Pinto