Interesting subject.I will firstly say that throughout my investing career on the asx, i've been quite bullish most of the time on our economy but after spending a lot of time researching comments by well respected investors,commentators and the like overseas and a few locally, i get the picture we are in for some hard times ahead and excuse me for a change of thought but this time things are different i think it's going to take a long time to fix and there's to much rubbish in the system that needs to be filtered out(if u know what i mean) i.e. longer than normal pain.Let me explain, i don't like believing everything i read and watch on t.v but when certain arguments/points are backed up with some real research then one must ask the question?? are we really deluded into believing this is a bull market or is it possible this might be a bear market rally that's headed a lot lower than expected... You choose?? and also to add i was never one for looking into dow theory and charts for clues but this time the whole spectrum of events and whats to follow is different imo.
The various choices for investors are on the table but my focus is long term and when we get massive downward spirals and problems that might take a long time to solve then one must wonder if this effects the companies you invest in and should you be fully leveraged to the market and what is the relationship that Australia has with world players and do we just keep on keeping on or is New York the central point for all the world activity and we follow like muppets.I think the muppet scenario will continue unless of course Australians take a firmer stance and direct the traffic rather than to follow the dow jones, which imo is very unlikely; cause muppets will be muppets.
Now I feel the dow theory commentary by Tim wood,to be of quality and his reasoning behind over 100 years of charting and cycles commentary has made me look at things from a different angle with regards to the u.s,europe,japan and australia as we are linked in some way.I respect those who spend a lot of time doing the research and show us the evidence behind their claims and i don't just take their word as gospel, i tend to combine this with the bigger picture and that is the massive credit bubble the world faces today and obviously comparing these stats to 50 and 100 years ago where the number today has grown...well who really knows??? except that it's much bigger then that of a few decades ago!!!!! and this doesn't help when guys like ex chairman of the federal reserve Alan Greenspan and currently Mr Bernananke running the printing presses non stop(a bit like giving people alcohol to stop the short term pain) but this is makng it even worse imo.
Now this message isn't about telling you to sell your shares first thing Monday morning, but more so intended for one to be cautious about what might be ahead if Mr Tim wood and others(well respected) are correct in relation to the Phase II decline.Sure we might get some rallies here and there but for the punters/day traders i would be taking profit where possible off the table and not getting to greedy in this tough market.
Personally i don't hold any spec stocks atm and my portfolio was assessed not to long ago and currently about 80% cash and this has only been a recent change for me mainly the fact that i'm not "even 50%" convinced that the economy will turnaround anytime soon which might have an effect on a few companies i have previously invested in i.e. future earnings.I'm only holding a small amount of core holdings as i'll be watching and on the sidelines indefinitely as October i.e. the selling month is just around the corner and a possibility of a real reversal soon.So maybe go fishing for a while until i see a bottom in 2013-2016 as a real possibility as well as a change in the debt/credit problems the world faces today.
If i were to offer advice not that i would give any but i would be investing very small amounts(taking tiny bites) into companies who are fully cashed up with bright prospects ,little or no debt,high r.o.e./strong returns/dividends i.e. track record evident,no.1 or 2 in their field and wise management as well as looking for companies that people rely on for everyday needs and are well positioned to whether a financial storm for a few years and the rest maybe in cash and possibly gold if u believe like i do that we might be in for some extended pain i.e. within local and world markets.
I recommend to google or youtube Steven keen(Australia), Peter Schiff,Jim Rogers,Marc Faber,Tim Wood just to name a few as all of them have backed up their arguments with supported evidence.One link is provided below.
