Daily Doom

[threaded]

Surely profit will need to go up if dividends are going up?

Alternatively, if share prices drop 90% and dividends stay the same, yield increases to 20% although profit and dividends remain exactly the same.

Yes, that's what a correction is, but a lot of investors have lost money in the move from the high price to the low price.

[sasguru]

Keep cash, invest in prime London property.
Sorted.

Bring on the depression - labour will be cheap, assets cheaper - ideal time to transform from being seriously prosperous to filthy rich.

[doodab]

Bring on the depression - labour will be cheap

You're planning to buy political influence? Tories and Lib dems may well be cheaper by that point.

[Mich the Tester]

Not quite, I think what he's saying is it's more like you've got this pack of cards, and 26 red ones have been pulled so far, so even if the pack is loaded, then then it's a fairly certain bet there'll be lots of blacks coming up in the future.

yep, correction, because there´s been a long line of black cards. Either way, it´s a fallacy. And there isn´t a ´pack´to be dealt out, just an endless line of random cards.

[The_Equalizer]

Yes, and how would that prevent values dropping lower?

It obviously wouldn't, but I doubt the markets would even exist at that level given the upheaval.

[TimberWolf]

Looks like people/investors have been piling out of gold in the last week, so where's the money going (apart from down the pan) if not shares? Maybe they are buying Pounds.

[doodab]

Looks like people/investors have been piling out of gold in the last week, so where's the money going (apart from down the pan) if not shares? Maybe they are buying Pounds.

Banks are busy refinancing loans made by governments during the financial crisis. I suspect some of it is going there.

[Mich the Tester]

It suprises me that anyone with the educationa to be expected of IT professionals gives credence to this pseudo-scientific claptrap. It's also a bit disturbing that a paper like the NY Times gives it the oxygen of publicity.

What this man is saying is speculative tosh, derived from selective interpretation of data from the past, incorrect application of fractal mathematics and a habit of counting the hits and ignoring the misses. Apparently, "Mr. Prechter wrote “Elliott Wave Principle,” a 1978 book that predicted the emergence of a great bull market — a forecast that was largely fulfilled. By 1987, he was widely regarded as an expert in technical analysis." So there he was in 1978, saying there would be a big bull market. Either there would not be, in which case, so what, the book was sold, or there would, in which case he'd be seen by eejits as a 'guru'. He had a 50% chance of being right. Getting things right once with a 50% chance doesn't make you an expert and doesn't demonstrate that your theory works. It obviously sells books though.

[centurian]

Looks like a Monte Carlo fallacy to me. He's saying, basically, that the next five cards will be red because there´s been a long line of red ones.

Monte Carlo falacy is correct when described in terms of roulette - as the roulette wheel has no "memory" of what happened before.

But cards are a bit different, because for each card you pull out - you remove that card from the deck, so the odds do alter. That's why card counting works...

[Mich the Tester]

Monte Carlo falacy is correct when described in terms of roulette - as the roulette wheel has no "memory" of what happened before.

But cards are a bit different, because for each card you pull out - you remove that card from the deck, so the odds do alter. That's why card counting works...

But that isn't what happens in a stock market; nothing gets removed; stocks are traded and will change hands as soon as the owner is offered enough money to part with the shares at any particular time; that amount may be more or less than he pad for them.