Stock market collapse in October

[mace]

Indeed, but Lehman's made billions of pounds of profit each year for years until the market they were most heavily invested in turned and wiped them out in months.

The UK economy goes up, on average around 2-3% per year. If an investment bank invested in all companies and all people in the UK, this is the return that they would make. Obviously banks don't invest in the unemployed or failing companies so can skew their returns to 5-7%. However, a company or a rich guy could get this level of return from an ordinary bank during good times. Therefore, the way that investment banks get much higher returns for their clients is by leveraging their investments i.e. borrowing many multiples of their assets to magnify their returns. It's exactly the same philosophy that buy to let investors use i.e. put down a 10% deposit, you'll have a leverage of 10. You can make startling profits whilst the markets running in your favour and shocking losses when it isn't.

[SuperZ]

October the most popular month for crashes of course, many are predicting a crash based on this.

The crash is has already happened, that why were what is it 40% off of the footsie highs.

Historically house prices crash 18months after a stock market crash. So given the current prices and 12 months have passed since the start of the stock market issues, that could mean house prices are in for a really hard time early next year. I think that is a real possibility,I think people are in for a shock once real liquidity returns to the housing market.

[sasguru]

Indeed, but Lehman's made billions of pounds of profit each year for years until the market they were most heavily invested in turned and wiped them out in months.

The UK economy goes up, on average around 2-3% per year. If an investment bank invested in all companies and all people in the UK, this is the return that they would make. Obviously banks don't invest in the unemployed or failing companies so can skew their returns to 5-7%. However, a company or a rich guy could get this level of return from an ordinary bank during good times. Therefore, the way that investment banks get much higher returns for their clients is by leveraging their investments i.e. borrowing many multiples of their assets to magnify their returns. It's exactly the same philosophy that buy to let investors use i.e. put down a 10% deposit, you'll have a leverage of 10. You can make startling profits whilst the markets running in your favour and shocking losses when it isn't.

You're making a classic mistake.
Investment strategy must be made on the basis of analysing mass psychology, not the fundamentals of "economics".
There is plenty of historical precedent to be studied.

[sasguru]

October the most popular month for crashes of course, many are predicting a crash based on this.

The crash is has already happened, that why were what is it 40% off of the footsie highs.

Historically house prices crash 18months after a stock market crash. So given the current prices and 12 months have passed since the start of the stock market issues, that could mean house prices are in for a really hard time early next year. I think that is a real possibility,I think people are in for a shock once real liquidity returns to the housing market.

The real recession hasn't kicked in yet. Over the next year enemployment is going to rise massively, probably peaking at 3.5 - 4 million.
People don't get the fundamental truth yet - this country cannot support its whole population economically any more.

[suityou01]

The real recession hasn't kicked in yet. Over the next year enemployment is going to rise massively, probably peaking at 3.5 - 4 million.
People don't get the fundamental truth yet - this country cannot support its whole population economically any more.

Again, he's right. I hate it, but it's true.

[mace]

You're making a classic mistake.
Investment strategy must be made on the basis of analysing mass psychology, not the fundamentals of "economics".
There is plenty of historical precedent to be studied.

Aye, but you don't know how much money I've made from studying economic fundamentals For sure, there'll be plenty of people who've made piles more cash than me by taking higher risks but, chances are, they'll get their fingers burnt eventually. Slowly but surely is the best way to accumulate and retain wealth.

[TimberWolf]

this country cannot support its whole population economically any more.

That's proper doom talk that is

[Evil Hangover]

Again, he's right. I hate it, but it's true.

Please explain ..., that is if you have time to take your tongue out of sasguru's arse

[suityou01]

Please explain ..., that is if you have time to take your tongue out of sasguru's arse

I have time for that, but not time to rise to sockies.

Fark orf.

HTH

[Evil Hangover]

I have time for that, but not time to rise to sockies.

Fark orf.

HTH

Nope. Didn't think so. Never mind, get back to some good ole fashioned arse kissing.