Druckenmiller Says Risk-Reward in Stocks Is Worst He’s Seen
https://www.bloomberg.com/amp/news/a...mpression=true
Someone who lies about the little things will lie about the big things too.
So, apart from second spikes appearing around the world, China tensions, confusing lockdown instructions, doom and gloom around massive recession, huge drop in GDP, Unions not playing ball, Trumps mental state, lack of coherent health and saftey rules on transport, all is good then?
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Wow, dead cats are now bouncy balls.
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Footsy taking a late dive
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Someone in the Fed stirring it all up
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My take is still pretty much the same as 6 weeks ago, we’re are heading downwards and the markets are being held up by optimism, printed money and the lack of alternative assets.
All the economic indicators look dire.
I just reviewed my own spending for April, excluding mortgage my spending was 52% less than average. I can see this level of spending remaining for months. This is handy as our income has dried up but we have not made any conscious economies it’s just we are not going out or holidaying or driving etc. I’d say we are a pretty average household so if you multiply this up by millions you see the global reduction in consumption and the impact on the economy.
Markets have to adjust if you ask me, they seem to be defying logic but that is often the way.
My spending isn't lower, I just ordered extra beer and bought a new tele
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Interesting that you mention about spending as I was thinking about this recently and have just worked out that my spending excl mortgage was 56% lower than in April 2019. I spent less last April than almost every other month in the 2019/20 tax year (no logical reason for that!) so I see no reason to suspect that May will be any different and in fact will probably be lower still. This was despite a watch purchase (although I did sell one too) and no deliberate attempt to reduce spending. I expect these are not isolated examples and looking ahead, people are unlikely to be buying more TV's/outdoor furniture and DIY stuff if they made such purchases in March/April...
Strikes me consumption is way lower than the figures show as there is a big lag in the analysis of data.
The examples are reflected by all my friends and family. This will eventually show in the figures.
In addition I don’t see anyone making major purchases... cars, extensions, conservatories, holidays and so the list goes on
House price crash .This time the government won’t be able to step in
There is/will be a lot of cash looking for a new home - it could stay in cash, but I doubt it, it will just be "when" it moves not "if" .........
If consumers are not spending what happens to the price of goods? Are consumers going to spend if they have no job?
But can they generate it? (Inflation)Did it happen after 2008?
You could argue it caused inflation in certain assets,stocks,houses,classic cars,watches....
I think if oil is low for reasonable period of time and wells are mothballed and that pushes the price up, that could cause inflation. But what do I know ? The answer is not a lot!
Last edited by miguelh34; 13th May 2020 at 23:02.
Carnage in the ftse this morning.
They had interest rates of about 6% when the crash hit, took them a few years until they reached almost zero, 1996 if memory serves me correctly. When that wasn't effective, they introduced QE in 2000/2001, 10 years after the bubble burst. They didn't have any need for QE before that because they had other ammunition.
All of it wasn't a straight line, many fake recoveries muddied the picture at the time.
Someone who lies about the little things will lie about the big things too.
Talking about fake recoveries.......
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Time will tell.
But when economists can’t even agree on the inflation / deflation direction is clear no one can be certain.
I’m still forecasting a bear market and holding my cash for better opportunities than exist today.
Reality might be starting to set in for the charts but too early to call.
Suddenly the city is worried about a deep recession
Suddenly
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Wow - I have just seen the Aston Martin share price is currently trading at 28/29p having fallen from a float price of 1900p.
I knew buying into the company when it first floated was a sure way to lose money but I would not have expected this.
Surely the brand name alone would interest a takeover bid of more than the current price?
I've just sold my (small) holdings in 2 funds
Some late rallies today, 6th V recovery started
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I predict yet another bounce in the next few days.
Then it might be time to move to cash/gold/crack.
Market cap is about 460 million pounds, while debt is a little over 1 billion. So let's assume EV is 1.5 billion. Plenty of space in there for the brand value, which is probably one of the main values left. A cash-burning business which had to slash the average selling price across the range to way below the cheapest entry level price is basically worth nothing (if not negative). The only other value is the potential for future profits if they manage not to screw up the launch of the DBX. If you are buying the shares, you are buying a highly leveraged bet on exactly that.
If the company goes down, the value of any assets will go to the debt holders before the equity investors see one single penny. In order for that to happen, remaining cash (minus payables), machinery (if not already sold and leased) and brand value need to be over 1 billion Pounds and the current market cap of 500 million suddenly looks optimistic.
I think that's what I indicated - just look at their Accounts and projections
They may be a company with a very desirable product, but their numbers now don't add up
Unless the Chinese market saves them, which it won't, I think that they will be for the "chop" and the shareholders won't get a penny, brand value or not.............IMHO there's no value in the stock at the present time and the way they have geared up it is very unlikely that a "white knight" will come along to save them
as is the way .........maybe a Chinese company will pay "pennies" for the name........but that's about it
maybe the investment should be in buying a car at the right price, then at least the dividend will be driving it!!
Last edited by BillN; 14th May 2020 at 19:30.
I like your thinking. Yesterday's numbers suggested that they are currently discounting at an incredible rate. This from Goldman Sachs:
Sounds like a cool 30% off or more could be had.Pricing actions suggest hard reset - The extent of the decline in core ASPs was a surprise as the company de-stocked 428 units as part of its reset. Nevertheless, £98k seems very low given that even when adding sales tax at 20%, the implied retail price would seemingly be lower than the UK list price of Aston Martin’s cheapest model (pre-any options).