FTSE Pessimism

jimjames

This was on iii yesterday. The FTSE 100 rallied to a 13-year high on Monday to close at 6,755.63, but is the bull market about to run out of steam?

http://www.iii.co.uk/articles/93882/bull-out-steam

Yet the day after the article was published the FTSE rose beyond 6800. Ignore the noise and remember that no-one can tell when it will rise or fall.

merlingrey

A_Flock_Of_Sheep wrote: »

So the FTSE is back at a level it was before the 08/09 crash. On the radio this morning was a pessimistic soul saying a mass crash worse than 2008 2009 is due "very soon".

So why should there be a crash simply because it is back at original levels. Does this mean that 08/09 is the final ceiling value. Seems a bit pointless if predictions are that it won't ever get beyond these levels. The drop or crash prediction was up to 60% too!!!

Well technically you're correct the stock market price is somewhere in the middle of zero and infinity all of the time.

The number is pretty meaningless unless you believe one of the following:

1. The future will be larger (more debt, more earnings, bigger NAV)

2.The future will be smaller (less debt, less earnings, smaller NAV)

If it is 1 =stock market probably undervalued

If it is 2 =stock market overpriced

Glen_Clark

jimjames wrote: »

no-one can tell when it will rise or fall.

They can if they know when the money printing will stop.
As Warren Buffet says, the first suggestion of an end to money printing will be a shot heard around the world. (Buffet is sitting on $49 billion in cash)

AlwaysLearnin

Glen_Clark wrote: »

(Buffet is sitting on $49 billion in cash)

That's a helluva seat...:D

merlingrey

The money printing i believe is a result of being in a world of finite resources and finite energy.
There is only so much hard assets in the world but money is theoretically infinite.

Land=finite
resources (oil, metals, mineral, gas etc)=finite
population growth=finite
money=infinite
debt=infinite

I think expecting the next 10 years to be twice the size of today is just so unlikely.

IronWolf

AlwaysLearnin wrote: »

That's a helluva seat...:D

He should get it in gold coins a la Scrooge McDuck

merlingrey

IronWolf wrote: »

He should get it in gold coins a la Scrooge McDuck

Buffetts a strange one when it comes to gold, his father was the ultimate gold bug, i guess the apple fell a million miles away from the tree, but then he bought tonnes of si1ver in 1998 so many of his comments on gold seem out of place to me

see here

http://www.fame.org/pdf/buffet3.pdf

Perhaps he is just so good at managing capital he does not need gold even in the absolute worst situations.

sabretoothtigger

He has gold, he mines the highstreet via pawn shops which is alot higher yield then hard rock and doing things the hard way

Why doesnt he keep some, it doesnt yield anything so it makes sense he'd go elsewhere with his money. He does manage his own security, he is very bearish on bonds so I think he still has a clue
Does he own plain oil or deal food commodities, I guess also no but I expect he could do it if he wanted and he owns the businesses that supply all those industries.

jem16

grizzly1911 wrote: »

I then question what the real value the full extra £2650 makes to the client. I accept there is an administration charge that needs to be covered.

grizzly1911 wrote: »

So the recommendation would just say invest? What was the original £350 for?

The point I was making is that an IFA's role is to advise. This may or may not necessitate purchasing a product.

As I have said to you on another thread, I believe £3k is far too high and you could do considerably better on a 6 figure investment.

As to why the advice is priced at £350 and the purchase of the investment is £2650, this sounds like an IFA who will not give you the full recommendation until you agree to proceed. £350 to be honest sounds far too low for quality advice.

It also sounds very much like an IFA who feels that you're shopping around and is at least making sure you are going to pay something.

Any decent IFA would be agreeing a suitable fee with you that will be taken whether or not you follow the advice.

grizzly1911

jem16 wrote: »

The point I was making is that an IFA's role is to advise. This may or may not necessitate purchasing a product.

As I have said to you on another thread, I believe £3k is far too high and you could do considerably better on a 6 figure investment.

As to why the advice is priced at £350 and the purchase of the investment is £2650, this sounds like an IFA who will not give you the full recommendation until you agree to proceed. £350 to be honest sounds far too low for quality advice.

It also sounds very much like an IFA who feels that you're shopping around and is at least making sure you are going to pay something.

Any decent IFA would be agreeing a suitable fee with you that will be taken whether or not you follow the advice.

Thanks jem appreciate your patience.

Hadn't considered shopping round may well do so as their seems to be a degree of inconsistency.

The original recommendation and fee has been agreed to. The additinal sum fell in their lap at review so may yet be mileage on that quote no sign they have proven added value yet.