How much further will stock markets fall?

lvader

thor wrote: »

Perhaps.....but who can say how long this 'blip' will last? It could be 3, 30 or 300 years, who knows?

The markets move very fast, we will probably see new highs and new lows in less than 3 years. Poeple quote Japan as an example of poor stock market performance over a long time but fail to take into account the strength of the Yen.

sabretoothtigger

If we're talking price not value then I would argue 300 years because at one point the prices will change in a way that never reverses like you when could buy a Rolls Royce for 15k and a mars bar was 10p and thats just within my limited lifetime

1 sovereign coin used to tender as a 1 pound coin, its 300 now. Its no big guess which way is the blip going

new lows in less than 3 years. Poeple quote Japan as an example of poor stock market performance over a long time but fail to take into account the strength of the Yen

Strong yen because they are net exporters. We dont have the same 'problem'
Also what percentage of their stocks business is Japanese because I doubt they are as foreign led as our FTSE

So new lows in the next 3 years is not likely here. We do not share the same factors. Value wise we might be arguably worse but price is going up

omeuwen

Stock markets could well fall a lot further, if China continues to cool and further US, British and French banks fall...

AliceJenkins

The markets have risen massively since 2008, I don't see why people seem to be missing that and acting like it keeps falling it doesn't.

It's just scare mongering.

lvader

sabretoothtigger wrote: »

So new lows in the next 3 years is not likely here. We do not share the same factors. Value wise we might be arguably worse but price is going up

It wouldn't be long lasting but as a crash it's entirely possible.

sabretoothtigger

China cooling involves them growing at just below 10%. Ok the problem they have is inflation and USA is their main customer who coincidentally happen to be printing off their currency :think: So the weakness is not China so much as the currencies involved and which way will this 'crash' when priced in pounds




When or if currency loses value it will raise the price of things not reliant on the UK.
HSBC is the most vunerable to a 'crash' in its prospective business as its majority is Europe and USA otherwise all the companies listed grow assets and sell on global markets

It wouldn't be long lasting but as a crash it's entirely possible.

Its unlikely currency will rise sharply when its rate of return is 0.5% at best and has been negative for years. If currency isnt rising, shares arent crashing anymore then the 4700 we saw in the summer.
Very uncertain markets exist but it wont fall greatly because its more profitable to actually hold the asset and take profits from their business outside the uk, the uncertain list pricing is as important as the company name.

World GDP is positive and so long as thats true, deflation does not exist.

The argument then is, but USA is the world. The reason this is not true is because stocks value future prospects. The currency values right now place USA as most important and yes thats true and if that changes then where is the world business placed,?
Is it USA, UK or somewhere the customers have solid currency.

The crash thats entirely possible is in currency values not stocks, when that happens it makes stock prices rise

lvader

Look at the long term Dow chart, a new 10-15 year low looks like a dead cert. After that things are looking good for a secular bull market.

sabretoothtigger

I dont see that but my chart data is not especially long term. I'd point at the long term dollar index as already in a decline

If adding the sum total of both it might be we are mentioning the same thing. The DOW scenario needs defaults to occur, deleveraging of money supply and so on. But money has no fixed value and companies are well capitalised

competitionscafe

S&P PE ratio is still a fair way above the long term average:
http://www.multpl.com/

According to this:
"The valuation levels to which we became accustomed in the 1980s and 1990s reflected the halcyon baby boomer
growth years. It would seem we now face a reversion to the longer term mean."
http://www.veritas-asset.com/Files/Documents/ClientLetters/Private%20Client%20Letter%20Oct11.pdf


At 2839, the FTSE ALL Share index is lower than it was at the beginning of this century, nearly 12 years ago: http://uk.finance.yahoo.com/echarts?s=%5EFTAS#symbol=%5Eftas;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

In 2003 it reached a low of 1685 and in early 2009 it was only about 100 points above that low at 1789.

If growth in China slows more than expected then it is hard to see where growth is going to come from in the short to medium term.

"Persistent inflation and an oversized shadow banking system and allied property bubble are now threatening the smooth running of the powerful Chinese engine."
http://www.ruffer.co.uk/cmsfiles/reports/RTRF_Monthly_report.pdf

"We continue to watch China as being the part of the world which will give us the next point of interest to the markets: is that country going ex-growth? – in which case the growth we are seeing in the rest of the world (and which is surprising commentators who are determined to be gloomy) may well be extinguished."
http://www.ruffer.co.uk/cmsfiles/reports/RIC_Monthly_report.pdf

Generali

dtsazza wrote: »

Falling stock markets are only bad news if you're a net seller.

I'd imagine that most MSE forumites won't be at a point in their life where they wish to reduce their net holdings (typically this would only be just before retirement, or moving abroad, or funding a new business, etc.)

In fact I'd go so far as to say that the vast majority that hold any equity will be net buyers, at any given time.

So on behalf of that group (of which I'm a member) - hooray, markets are having a sale! I can pick up more for the same capital outlay, and this blip won't have any impact on their value when I come to sell in 10-40 years!

Just to make the point, you can't have net buyers or sellers of stock overall. If I sell, someone must buy or I can't sell. I find it funny/annoying when the paper says, "markets rose today as buyers outnumbered sellers".

Oh right. Who are they buying from in that case?