| Forum Home | ||||
| PC World Chat | ||||
| Thread ID: 94164 | 2008-10-17 05:06:00 | Sharemarket question | Johnnz (7246) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 712814 | 2008-10-19 19:42:00 | Hi all, Have been listening to all the news about the falling sharemarkets around the world, and am wondering, with all the people selling at the moment, who is buying? Do those selling only get money for their shares if someone else buys off them, or is there a cash fund of some sort that buys it back until it is sold later? It just seems that all the media is saying is that everyone is selling at the moment, just made me think that there must be as much buying going on too, right? Its kind of funny if you think about it, that both the seller AND buyer in their mind are making the right decision But yes, there are definitely bargains to be had. Anyone who buys around now or the near future will do well. So if you're in a high growth kiwi saver fund, be glad there's all this turmoil. |
utopian201 (6245) | ||
| 712815 | 2008-10-19 21:49:00 | If you own shares in a company that is sound, then selling right now makes you a loser, what makes a company sound , there are a variety of rations that give a good indication, with Debt to Equity being a major factor in today's market, Earnings per share etc. What does the company do, non essential and luxury goods and services will feel the pinch in downturns. Companies relying on a buoyant credit availabilty could be in for a hard ride In Australia boat building companies have retrenched alarmingly as forward orders vanished almost overnight. This downturn has its origins in excessive debt due to failure of banks to act with probity in granting credit to consumers, especially home-buyers in the USA. The problem there has been exacerbated by the sheer volume of mortgages at 100% or more of property values. (minimal financial risk on the borrower and maximum risk on the lender). With the enormous glut of mortagee repossessions depressing the market to such an extent that may previously sound home loans with acceptable debt to equity ratios, are now burdened with a level of debt in excess of the properties current market value - an accelerating recession only increases those at risk and compounds the problem - bloody frightening. When finances get tight, people try to improve their capitalisation by selling assets (shares), panic can set in very quickly and depress the market thus making the situation much worse. Message if you have sound shares - Don't Sell - if you have the cash watch the market and buy carefully when it bottoms out. Unfortunately too many buy at the top of the market and sell in panic at the bottom. |
KenESmith (6287) | ||
| 712816 | 2008-10-21 20:24:00 | Some interesting points although you never know when something has bottomed out until after the event. Trying to "time" the market can be an expensive way of losing a lot of money. Another maxim I have learnt over the years (in addition to never borrow to buy shares) is to never stand in the way of a falling share. I have been there and done that so many times I think I can safely call it the 'Andrew principle'. That said the price of Telecom is very tempting.....:) {will I ever learn?} But you are quite right Ken, so long at the fundamentals are sound then the price almost becomes irrelevant in the long term. In answer to the original question there is a buyer for every seller and vice versa. So who is buying? Grahamites. Those that do the opposite of the general populace. Now that is a good strategy for making money. Andrew P.S. What we are seeing right now is extreme volatility. Where you have such wildly swinging prices on such small volumes, it indicates we are seeing extreme over-reactions to the most minutae of news. In such scenarios, the stock market is best avoided. Such markets enable the transfer of wealth from the impatient to the patient. |
andrew93 (249) | ||
| 1 2 | |||||