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Discussion Starter · #1 ·
Been watching the markets closely for a while now. I'm not an economist or trader but I can see things aren't looking great at the moment. The cause of all the worry seems to be China's stock market. Other factors like a drop in oil price, weakening rand etc adds to the worries.

A rise in the US Federal Reserve rate might make things better.

So what do you guys reckon ? Are we heading for another recession ?


The next week is probably a good time to buy some Naspers, FNB and Woolies shares and wait out the storm....
 

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Chinese stocks trade at a PE of 60. Basically you pay R60 for every R1 profit they make. S&P, FTSE in UK and JSE trade at PE's of around 19. So the chinese shares are extremely expensive. This is due to the fact that punters pushed up these shares expecting massive future profits. Chinese economy slows, profit expectations drop, then everyone realises, oh ***** these shares are crazy expensive and they sell and dump shares, causing a flight from emerging markets (and stocks in general into safer options like German and US government bonds). Causing a massive sell off in stock markets.

Buffet always said. Be greedy when others are fearful, be fearful when others are greedy. Im piling in now. The stock market is where I made myself a lot of money over the years. And I will continue to do so.
 

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Chinese economy slows, profit expectations drop, then everyone realises, oh ***** these shares are crazy expensive and they sell and dump shares
May I rewrite part of your post, Perreby?

Rewrite: "People start realising that the Chinese government has simply been lying about Chinese growth figures for years, profit expectations drop, then everyone realises, oh ***** these shares are crazy expensive and they sell and dump shares..."
 

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Not to mention that GDP is an accounting measure, not an economic one, which makes it very susceptible to misinterpretation in most economic analysis. Don't take my word for it, take the word of Simon Kuznets himself.
 

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The stock market...the devil's playground.
 

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We(All countries) were never out of recession, it was all our own countries who lied to us. I beleive the saying goes "Only an idiot takes the same course of action and expects a different outcome"

I don't know about S.A. but i suspect its the same as UK in that this nonsense so called boom is based on estate agents being greedy *******s again.
 

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What is the answer to do with all your free cash then?:thumbup:
 

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What is the answer to do with all your free cash then?:thumbup:
As a very basic guide:

Do invest in the stock market and be patient. If you don't have time or know-how to do research, just pick an ETF or some fund with low fees and park money there - for years. Offshore funds or ETFs can be a good idea. As a basic thing, try to climb in when the market is low and remain invested. If you don't want to deal with too much tax hassles, don't take out money all the time.
Also buy some gold and hold on to it.

And do keep some liquid cash around too, but shop around carefully where you put it, so you don't lose too much to inflation by keeping it in a savings account - you will lose to inflation, but try to minimise it. Just because something is called a "savings account" doesn't mean that it actually offers half-decent interest. Half the "savings accounts" on the market have pitiful interest rates. Get something that offers at least repo minus 1,5 percentage points, preferably higher.
 

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I don't have savings...saving into my house and for kids I save in 'markets' and for my retirement and save in 'markets'.

I've never had this question answered before:

"well, if you're making so much money and letting us know about it at every braa...take my R50k right now and do something worthwhile with it" to which all these so called investors always have maningy excuses.

Its a gamble in my opinion...a rather uneducated opinion, but one non-the-less.
 

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Discussion Starter · #12 ·
Its a gamble in my opinion...a rather uneducated opinion, but one non-the-less.
Yeah it is a gamble - but there are some indicators.

A simple example is Naspers. The Chinese share tencent makes up a massive part of Naspers - so if you want to get an idea of whats going to happen to Naspers - look at what tencent is doing.

Then the old rule (buy low and sell high) - (Monday was a good day to buy) and then just wait till they restore to their original highs and then sell.

Then instead of using a savings account for interest - rather use a Unit Trust.
 

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I don't have savings...saving into my house and for kids I save in 'markets' and for my retirement and save in 'markets'.

I've never had this question answered before:

"well, if you're making so much money and letting us know about it at every braa...take my R50k right now and do something worthwhile with it" to which all these so called investors always have maningy excuses.

Its a gamble in my opinion...a rather uneducated opinion, but one non-the-less.
So the richest man in the world is a gambler then? Mmm time to go to casino so we can all get rich :cheese:
 

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Dumping extra money into a bond isn't a bad idea if you want to play it safe and get relatively high returns.
 

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I am no expert but in my opinion in times of uncertainty paying off your debt is the best thing you can do. I pulled out all my investments about a month and a half ago and dumped it in a money market account. Long-term not the right thing to do I agree but when I saw the cracks I decided to pull out of the high ride we been having these last couple of years. I will wait out 5 months or so and review what happens before reinvesting. I am in the construction industry and without a doubt there is a slowdown coming with very little in the pipeline for the coming year. We have been seeing this already in the first quarter of the year.

I am in the fortunate position of not having debt but if I were you Giuli I would definitely have dumped it in a home load account vs. any cash holding account.
 

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I am no expert but in my opinion in times of uncertainty paying off your debt is the best thing you can do. I pulled out all my investments about a month and a half ago and dumped it in a money market account. Long-term not the right thing to do I agree but when I saw the cracks I decided to pull out of the high ride we been having these last couple of years. I will wait out 5 months or so and review what happens before reinvesting. I am in the construction industry and without a doubt there is a slowdown coming with very little in the pipeline for the coming year. We have been seeing this already in the first quarter of the year.
Sure - only caveat with that approach is to be aware of possible tax implications, both capital gains and possible income tax issues. These taxes are very distortionary on investment.
 

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Sure - only caveat with that approach is to be aware of possible tax implications, both capital gains and possible income tax issues. These taxes are very distortionary on investment.
There are many ways to avoid the taxman completely, quite easy actually and within the law. Many people do it and never pay a cent in tax (well except for VAT for small purchases like chocolate and coffee, on big purchases VAT can be claimed back through some clever systems).
 

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Bad Rand / Euro rate means Giulia going to cost more:depressed: Going to Tuscany on Sunday had to pay over R15 to one Euro.
Hope to see some Alfas and other Italian exotics while there. Who knows maybe a Giulia driving around the country side.
 

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There are many ways to avoid the taxman completely, quite easy actually and within the law. Many people do it and never pay a cent in tax (well except for VAT for small purchases like chocolate and coffee, on big purchases VAT can be claimed back through some clever systems).
Care to elaborate? Being in the tax profession myself I've yet to find a way to avoid tax completely - only evade it, which is of course illegal. Unless you're happy earning less than R70,700 per annum in which case your effective tax rate is 0%.
 
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