Economy crash =/= stock market crash?

beavere38

sevenhills said:

beavere38 said:

I don't own any stocks and I would not buy any at the moment based on my observations. This could be a smallish correction or just the start of something much bigger (Or I could be completely wrong of course). I've sold one property I owned and another is SSTC now so hoping to complete on that quickly. That just leaves me my own home. I believe cash is best right now. I can buy properties / stock at a discount later if I am correct. I can't short bitcoin but am shorting Tesla and the indicies.

I was reading an article on the BBC website about a possible buyer for Morrisons. The article stated that UK share prices were undervalued compared to other countries.

"BBC business correspondent Katie Prescott said the flurry of takeover activity was being fuelled by relatively low share prices of businesses in the UK compared to abroad and cheap money because of low interest rates"

https://www.bbc.co.uk/news/uk-57541617

A flurry of Mergers going on is often a bad sign.

"This is a warning because M&A (Mergers & Acquisitions) activity tends to come in waves, and all past waves have ended badly for the stock market"

https://www.marketwatch.com/story/whats-happening-now-with-ma-is-going-to-make-todays-stock-investors-wish-theyd-sold-sooner-2020-09-10

sevenhills

beavere38 said:

A flurry of Mergers going on is often a bad sign.

"This is a warning because M&A (Mergers & Acquisitions) activity tends to come in waves, and all past waves have ended badly for the stock market"

I do share your negativity about the prospects for our economy, but I don't know enough to actually sell some shares and keep cash.

Thrugelmir

beavere38 said:

Thrugelmir said:

If only charting was an accurate science by itself. For the majority of retail investors buy and hold is the best approach. Avoids overtrading and taking speculative positions. 

I believe inter market chart analysis is accurate. I've looked at individual stocks and the indices and I see warning signs everywhere. Lets see if bitcoin drops lower next week as I have suggested it will due to the Head and Shoulders patterns on my chart. If it does then Tesla will go down too and the Tesla chart alone is telling me Tesla will drop. Add to this the fact all indices have broken down through a major support line. You can also add to this the fact that bitcoin and the stock market have a tendency to move in a similar direction. Buy and Hold is great unless you buy right at the top in which case you have a long wait on your hands. If I am wrong everyone can laugh at me I really don't care I just wanted to point out the red flags I am seeing.

A considered fundamental analysis of Tesla is sufficient. No need to chart the share to form an opinion. 

beavere38

Thrugelmir said:

beavere38 said:

Thrugelmir said:

If only charting was an accurate science by itself. For the majority of retail investors buy and hold is the best approach. Avoids overtrading and taking speculative positions. 

I believe inter market chart analysis is accurate. I've looked at individual stocks and the indices and I see warning signs everywhere. Lets see if bitcoin drops lower next week as I have suggested it will due to the Head and Shoulders patterns on my chart. If it does then Tesla will go down too and the Tesla chart alone is telling me Tesla will drop. Add to this the fact all indices have broken down through a major support line. You can also add to this the fact that bitcoin and the stock market have a tendency to move in a similar direction. Buy and Hold is great unless you buy right at the top in which case you have a long wait on your hands. If I am wrong everyone can laugh at me I really don't care I just wanted to point out the red flags I am seeing.

A considered fundamental analysis of Tesla is sufficient. No need to chart the share to form an opinion. 

What do you think about Bitcoin? I know a lot of people seem to regard charting as some kind of witchcraft btw. If I am correct about the Head and Shoulders pattern on the Bitcoin chart there could be a rapid drop in Bitcoin value from $32,000 today to $20,000. Bitcoin is well known for massive moves up and down so this is nothing unusual. So what if it does drop? Tesla owns 90,000 bitcoins and if you do the math this "asset" would drop in value by $1,080,000,000 in the same short timeframe. Do you agree that would pull the Tesla stock price down? If Tesla drops the Nasdaq will drop and so on.

EDIT I think I was wrong that Tesla owns 90,000 Bitcoins, I believe that has dropped to 38,300 in which case this asset would lose $459,600,000 in value if Bitcoin dropped to $20,000

Thrugelmir

With a $600bn market valuation. Even if Bitcoin became worthless overnight. Tesla could simply tap the markets for further funding. Bigger issue for Tesla was the manner in which the PR stunt backfired.  Blew away any pretence that Tesla is an ESG stock.

Greatest challenge is competition. Sales in China are slipping. In Europe Tesla now ranks 5th with the VW Group continuing to streak away. With new model releases seemingly every month. The concept of a single platform for an entire model range is  proving highly beneficial. Meanwhile The Berlin factory opening date drifts further in the future. 

Blockchain technology has value. Crypto currencies could be blown away overnight by Central Bank regulation. 

Type_45

I still don't understand why you'd sell your properties. Why not just rent them out?

And you've no doubt had to pay CGT etc on them.

Type_45

How is the global market 200 day moving average looking?

PunishTheBunny

beavere38 said:

Thrugelmir said:

If only charting was an accurate science by itself. For the majority of retail investors buy and hold is the best approach. Avoids overtrading and taking speculative positions. 

I believe inter market chart analysis is accurate. I've looked at individual stocks and the indices and I see warning signs everywhere. Lets see if bitcoin drops lower next week as I have suggested it will due to the Head and Shoulders patterns on my chart. If it does then Tesla will go down too and the Tesla chart alone is telling me Tesla will drop. Add to this the fact all indices have broken down through a major support line. You can also add to this the fact that bitcoin and the stock market have a tendency to move in a similar direction. Buy and Hold is great unless you buy right at the top in which case you have a long wait on your hands. If I am wrong everyone can laugh at me I really don't care I just wanted to point out the red flags I am seeing.

If charting was a science with predictive power, chartists would be very rich. It’s just a tool, and an imprecise one at that. The US and Japanese markets are expensive, but interest rates are low. An increase in interest rates could provoke a sell off. Europe and the UK are much better value. Timing the market is not a good idea unless you have concrete reasons for a crash soon, as some did pre 2008. All too often the market sails upwards, and you lose out. If it does crash, don’t sell and after a few years you’ll be able to pull your head out of the sand, and look at your investments again without fainting. 

Tesla is overvalued and overhyped in the view of some, including myself. The share price has factored in large future growth that is not guaranteed. I don’t think Bitcoin and the stock markets are correlated. A major Bitcoin crash could have issues if financial institutions held a large amount. 

As for YouTube predictions, YouTube is always full of imminent crash predictions, it’s a goid way to get views, and hence earn money. 

beavere38

Type_45 said:

I still don't understand why you'd sell your properties. Why not just rent them out?

And you've no doubt had to pay CGT etc on them.

I inherited both properties recently. If you search for threads by me you will see me asking questions on here about probate last year. Renting them out was an option but I believe a house price crash is coming hence I am selling and no CGT to pay. Regarding the moving averages, well this is an early warning that something is wrong very close to the top so obviously everything is above all the averages at the moment. I would rather be aware near the top than half way down to the bottom.

Type_45

beavere38 said:

Type_45 said:

I still don't understand why you'd sell your properties. Why not just rent them out?

And you've no doubt had to pay CGT etc on them.

I inherited both properties recently. If you search for threads by me you will see me asking questions on here about probate last year. Renting them out was an option but I believe a house price crash is coming hence I am selling and no CGT to pay. Regarding the moving averages, well this is an early warning that something is wrong very close to the top so obviously everything is above all the averages at the moment. I would rather be aware near the top than half way down to the bottom.

How will you know when to re-enter the market (stocks or housing)?