Hey guys,
I don't normally pay too much attention to news articles but I was sent this one http://www.theage.com.au/business/markets/predictors-of-1929…
which talks about a company who have correctly predicted recessions in the past.
They put the chance at 65% in 2015 which is quite substantial. They seem to have predicted previous ones, but no mention of the ones they may have got wrong (figures).
Time to sell the shares?
Earnings down, Share Prices up.
That can't be good news. At the moment there is still some uncertainty about when the next recession will be. It's not if, it's when. Investors stay irrational longer than you would think.
The stock market is basically a fool selling to another fool. You only know who is the fool after it crashes.
Investors stay irrational longer than you would think.
Fixed
@josephchi So what's your prediction ?
I can't predict it, and if I could, it would only a few months ahead.
You can watch countries like China and the United States. The information from the Federal Reserve can usually help you make a judgment about where the next few months will be moving, but in a year's time the whole thing might change. When QE 1 & 2 were finished, they just started up with another one…
Everyone expected China to keep stimulating, but apparently they have folded their arms and are not going to do anything, at least for the time being.
I trade knowing I could be the fool, and yet on the other side of the trade, the other person could be the fool. Usually an investor is in the position to sell because they think the price is too high, and yet there is another investor who thinks the price is too low and buys that stock. Both can't be correct. There is always a buyer and seller for each trade, someone is always the loser, it's a zero sum.
I am not sure about a global recession in 2015, but certainly Australia is not in a very good condition as
1. unemployment is at 6.2% which is even higher than the unemployment during 2008-2009 period.
2. china's growth forecast had been reduced which reduce demand for our coal and iron ore.
3. falling prices of iron ore and coal.
4. housing boom running out of steam and price growth is flattening.
above signs are enough to conclude that the economy is weakening.
Crude oil price had been going down over past few months, last time we had this level of reduction was in 2008-09 period
http://www.infomine.com/investment/metal-prices/crude-oil/al…
we had a thread few weeks back discussing this issue And majority agreed that we are heading towards a recession.
https://www.ozbargain.com.au/node/164718
Yes, I had read that thread but it was just people saying we were heading towards one. It's end of 2014 now, 2015 right around the corner.
More like 85%. This collapse will be hilariously epic. Lots of rich old farts jumping off bridges and out windows as everything liquidates. The petrodollar hegemony is ending, the US is fading, Europe is a fart away from continent wide riots everything is heading for BOOOOOOOM. Cue China and Russia teaming up and ending the West once and for all with an endless thirst for resources.
Oh wow lol.
I'm going to agree with the suicide comments. It's actually quite common with hedge fund managers.
Self fulfilling prophecy.
"oh no! a recession is coming! sell all the shares!"
all shares sold, value drops, more people believe recession is coming, more shares sold, people start ropeless-abseiling, etcetc, and there you have your recession.
Very unlikely…
Unless you're very speculative, then selling off shares isn't that smart.