Whats your opinion????????????????????????????????????????????????????.

To be honest Im getting a little fed up with all this Credit and Margin within the market, as I see it leads to volatility and sideways markets as short - termism leads the way.

Spreadbets, CFDS, T plus and many more are having a very negative effect on the market as I see it, even Winnie and Evil K admitted this last year, whats the solution if there is one? or are we stuck in a circle chasing are arses and tails. Your opinions whatever way, would be most welcome.

cheers GF.

i have not read through all these postings...but in answer to the original question the answer is certainly "YES"....and that is borne out by the fact that the average time a share is now held is but a fraction of the time a share was held 50 years ago

someone may have the exact number of those days !!!!!!!!!!!!!!!!!!!!!!

spivs will eat themselves. hopefully. sadly the pi and new business suffers.

Just got in from pub,not a good idea to post comment but...........For a start very good thread GF.
In my opinion there are two ways that this is going:

1. Invest in a share that you think is going to do well and ride out the storms that will follow.

2. Don't bother researching a new company that has promise and may come good because in the short term it will be shorted,if there is nothing to back it up now.

Is it a good thing then,that having the ability to short a company due to over exposure on hope,will then keep the share price at a more realistic value over a period of time?Is this the modern way or has it always been so?

In my ignorance,I thought if enough people invested in a company they thought would do well (over say the next year or so)then that was it!!How wrong I have been...to find out that there are people gambling on the failure of that company ie.lack of positive news in the short term.Then having the buying power to bring a company down to make a profit......well it blows my mind.If the company doesn't deliver then people sell that is my point,not banking on a company failing before it starts so to speak.
I can see both sides of the coin but all i can see is the small investor loosing out.
It would be interesting to hear a view from a company that has been shorted and how it effected them in any way(especially long term)!

just me ramblings.night

The market has been irrational and paranoid for as long as it as existed. The trick is to act in a manner than takes advantage of it rather than be steered by it. At the end of the day the market is a quotation tool not a valuation tool and therefore as long as you are not over leveraged you should take advantage of this fact.

With historically low interest rates it is unlikely that asset valuations will have a smooth ride for some time as the various economic factors revert to someting closer to normality.

I don't think you would expect anything better from the market when in my opinion the country is led by short-term spivs. Attitudes of the masses are created by their leaders.

Have a look at www.comstockfunds.com
article
What You Think You Know That Isn't So

In the late 1990s we wrote a lengthy report with the above title at a time when investment advisors, strategists and economists were exclaiming that all one had to do was ignore the stock market fluctuations, invest in stocks at any time, and watch your nest egg return an average of 10% per year. We pointed out that although there was a kernel of truth in the argument, investors were actually running great risks in buying stocks at excessive valuations near the end of secular bull markets. Although valuations are somewhat lower than the ridiculous heights reached in early 2000, the cyclical bull market since October 2002 has once again put the market in a position where the risks of losing money--or at least not making anyare once again very high.



The kernel of truth in the long-run thesis is that U.S. stocks really have returned about 10% a year on average over the very long term. There are two factors,

Good post jumpin.

Im still yet to be convinced by the flip side that the markets in small caps especially, are being led by nothing other than credit punters.

cheers GF.

Over the long term small caps have outperformed large caps but are much more volatile. However long term thinking is not for the highly leveraged.

It's time that the government stepped in and stopped all this gambling with the companies that are running the country, the pensions and the profits/losses of small/medium/large investors. The sooner the shorters, longers and whatever elsers moved back to horses, dogs and left shares alone the better. What's all this I've been reading about hedge companies? Another 1998 crash?

Good point on pensions Angi. I suspect the shorters who take the market down are only thinking short term, what a shock they will get when they get their final pension summary.

cheers GF.

http://www.moneyam.com/action/news/showArticle?id=789943

Interpreting the market's language.

Not quite what is being discussed, but..............

I think it has go for another push for a great dive.....round autumn. A red auttumn

Never read so much twaddle in all my life. There have always been shorters, and there needs to be to make a market. Who else provides the other side of the deal when you want to go long ? No, don't tell me, it's someone selling you their shares because they're altuistic and want to share some of their profit on the long side with you.

Hotei. I partially agree with you, but I think 10 years ago shorting and going long was less common and then generally on the larger capitalise companies and therefore had little effect on the overall movement of the share price and the market in general. I think it is unlikely to change and as you state we are only making money at someone elses expense. (But we only notice our own pain when we are loosing, like to-day S-d IT! Majority of shares blue but the red ones hurt.

Fred - I agree that the ability to short, for the small trader, is something that relatively few had access to until recently with the advent of CFD and spreadbet instruments. But now we have them we are on a more even footing with the big boys, and I think that is good. It's too easy for people to blame others (shorters, market makers, analysts, "de-rampers" etc) when their investment decisions turn out to be "not so good" the market is as the market is - people need to learn to live with it and benefit by it, or move on to do something else with their money.

The big boys are gradually moving into Bonds well away from the volatility of this market with all its credit tools.

What we are really seeing at the moment is one of the downsides of the consumer credit bubble burst. People have overspent, they now have to pay back what they owe, theres less money being invested in the markets.

As for Hotei, Im sorry but this remark is totaly wrong "Never read so much twaddle in all my life. There have always been shorters, and there needs to be to make a market. Who else provides the other side of the deal when you want to go long ?"Ends, err hotei for every buyer there is a seller, selling in the convential way is not the same as shorting, and shorters are not needed to make a market, sellers are.

cheers GF.

GF - self-evidently, there must be a seller for a buyer. However, a seller doesn't necessarily have the assets he is selling at the time the trade takes place.

Hence you answer your own mistaken assertion and you have a shorter in the above case. Anyway hotei my initial post is not just against people going short it also covers them going long aswell on credit.

I beleive the amount of credit in the market place now leads to far bigger swings both ways and directly leads to the volatility we have seen since the end of the last Bear market. I hope you dont take my post as offensive its not intended to be. I really just want to know how people feel about these new tools in the market place and also their likely effects on shaping markets in the years to come.

cheers GF.

Hotei - How dare you tell me to get used to it or move onto something else. I've been investing for years, recently supplimenting my pension. I have absolutely no desire to "move onto spread betting, cfds, horses or dogs".

Spread betting is great for someone like me who can't afford to buy shares in the FTSE 100 or on the New York Stock exchange.
But then the amounts I bet are so small they are hardly likely to affect the market. Also I only bet with cash on deposit.
Is it ok for me to carry on? :-)