5,500 still could happen Greg.
I wrote this post on 17th March and everyone thought I was crazy

“Volume is anemic and cyclical companies earnings, the true measure of an economic recovery, all have been shocking. Toll off a cliff. I think we might have a range bound market abit like the post 87 crash or in the early 90s. In those situations we essentially did nothing for several years.
I am looking at around 4,250 on XJO for re-entry”

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.

But I am not giving up yet I am not surprised stocks have been hit by fears that growth in China may be slowing and I warned about this earlier in the year, but once again I think the sell-off has been overdone.

Investors have been pretty easy to scare since the GFC, it doesn’t seem to take much to spook the markets these days either.

These figures are as reliable a forecast as the stuff I hear from MRD on property returns. They’re provided by salesmen.

I’ve _no_ idea where the stock market will be in twelve months.
Would we really have pegged a fall to 4200 after the last peak?
I think there are just too many doubtful issues in play, including mining taxes, Europe and the US… .

And what might _Labor_ have a grab at, next?

Thats spot on Greg. Warren has mentioned previously that the greatest stock market returns have been when the economy has been performing poorly…so he says using the economy to forecast what stock returns will be doesn’t work.

The 2 and 5 year rule is a good start in regards to stock market crashes. But then it doesn’t always work either.

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.

Three of the four emerging economies you’ve listed have cheap labour as an economic advantage, so they’re competitive globally.

I’m struggling to align the concept of a failing economy with a rising stock market, to be honest.

As for the stock market falling, well I actually think things will stabilise over the next 6 months or so and stocks will slowly head up again. Things aren’t as gloomy as they appear. Okay so the Chinese economy might be slowing down..it happens to all economies, but this doesn’t mean the end of the global economy. We all survived the bursting of the Japanese economic bubble right?

Of course Europe is a bit of a mess and the US economy does not look great but many other large economies like Brazil, Indonesia and India seems to be still growing along with a whole range of emerging economies like Vietnam.

So I think ASX stocks will hold up okay over the next 12 months, but I reckon the economy will not. This might sound strange but the Australian stock market has been trading at recession like levels for around 2 years so the air has already been let out of that bubble.

However the rest of the Oz economy has been propped up by Government spending and commodities exports..but the impact of these on the economy is starting to wane. Unless something comes along to give the Oz economy another kick along then where else can it go but down?

However, my view is that the US economy will have bigger impact on Gold price. At this point, I do see Gold price rising.

The use of Gold is not “consuming” it as much as it is used as a storage of value against risks. So when people shift our of Gold the price will crash down badly, like in the early 80′s. The crash will come too, if Gold does rise sharply.

I reckon money will move out of Gold to buy stocks at some point, pity I can’t time the market…

At the end of the day most gold being mined is heading into vaults so there is no shortage of the stuff. All it would take for gold to come crashing down is for a number of the smart players to shift out of it and into something else.

Now if I just knew what they might move into!

But as for a bubble? It is not anywhere near where it was back in 1980 in real terms so the bubble call may be a little early.

Gold is very volatile, wouldn’t surprise me if it corrects 20% H2 this year. It won’t surprise me either if it goes much higher two years later.

See: http://www.smh.com.au/business/gold-price-a-bubble-waiting-to-pop-20100628-zca1.html?autostart=1

http://www.bloomberg.com/apps/news?pid=20601087&sid=amFBFX5pGN_g&pos=2

10Q1 = 3-3.5%
10Q2 = 5.5%
10H2 = 1.5%

So theres a cliff effect here. Might be ugly for markets towards the later half of the year (assuming reliable forecasts).

Interesting forecast by Tudor on the Euro back in Oct 09:
“The Euro is still perceived as the default alternative to the dollar, but fundamentals are less than supportive. Europe has several countries that will undergo profound deflationary and quantity adjustment.”

Paul Tudor’s produced compound annualized returns of about 20% p.a. since the mid 80s? Or about 9,000-10,000% return on initial investment!

http://www.scribd.com/doc/21753600/Tudor-Third-Quarter-Letter

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.

Those PPI numbers (.6% fall) show defaltionary pressures taking hold. Can you imagine what the CPI and PPI would look like if there was normal levels of government stimulus and oil prices were more like 50$. What a shokka.

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.

As for gold, it seems to be stuck at around the current price and in $AUD terms has done very little for around a year. But this doesn’t stop people trying to talk prices up!

As for the U.S economy, has the recovery already begun I wonder or it is still bottoming out?

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.

Plus that recent revelation impressed me -- I’ve got to admit I had assumed he’d have a heavier exposure to stocks and commodities. (But he’s not a young bloke as he points out.) And also that while he is a Brit with no property in his portfolio, he’s got plans to pick some up. (The bulk of his cash is tied up for a while yet earning him respectable interest.) :

http://www.marketoracle.co.uk/Article17891.html

Thanks for the charts from cij re housing loans.

Current Sentiment:
CBOE Call Volume 1.9
Index vs Equity PC Ratio 0.5
VIX 50-day ROC -17.9%
Investors Intelligence Bulls 44.9%
Investors Intelligence Bears 23.6%

Yield Curve (50-Day ROC) -29.0
SPX Price/Book 2.2
SPX Pe Ratio 18.5

Above not advice, just banter…get advice from a financial adviser etc that knows your circumstances etc.