The ISEQ Thread Part I - March 2008 - October 2008 **LOCKED**

It's not funny anymore, is it ?

And that thread on P.ie is feckin scary.
http://www.politics.ie/viewtopic.php?f=161&t=24783&start=1944

When was it this low before ?

Ah sure that's grand then. Keep your cash under the bed, and then throw everything at it when it hits 4100.

Quote :

by youngdan Sun Jun 22, 2008 8:31 am

I have now grown alarmed and with that in mind I feel as if I must sound the alarm. I have seen with my own eyes events taking place that will have grave ramifications for everyone's future who reads this thread. I speak of course of the plight of our feathered friends the Spinner Birds. Some time ago I bemoaned their extinction from this thread which I put down to a localised effect of Global Warming. How we all long to hear their happy little tunes just one more time. Some of these merry melody makers had found refuge on the Lisbon threads where they still spinned day and night. Their tunes were strained over there and they more resembled Worried Warblers than the happy tweeties they were here. As the results were tabulated my heart grew heavy as I lamented the demise of this beautiful little bird.
Imagine the shock I suffered on reading the aftermath of the vote. I was greeted by a feathery fiend which was nothing like I had ever encountered before. I had to immediately overhaul every view I ever held on evolution. The gentle spinner birds seemed to have evolved in the space of a few hours, that which text books would have us believe should have taken millions of years. To the casual eye they looked the same as always but when they opened their beaks the most nasty bile poured forth. The vemon they were aiming at all the others birds was shamefull. Instead of facing extinction they were threating extinction on all the other birds. They must have been secretly genetically modefied to turn them into some form of scratching biting buzzard with the temperment of an African Killer Bee. Every nasty change that now is coming is all the fault of the other birds who voted No.
I now expect a return to this thread of this genetically modified Spinner Bird. He appears to be immunised against reason, economic history and even the evidence before their eyes. Their song will be grating on the nerves and agonising on the ears. Fortunately they will have only one tune but it will be sang constantly. As the other birds ponder the unfolding crisis these Spinners will screach that had we passed Lisbon then the all powerfull ECB would come to our aid like the Bank of England did with Northern Rock. These birdbrains will convince themselves through constant repeatings that they have been correct all along. As things get dire some birds may actually come to believe this. This Hegalian tactic will be like a hammer to beat us into another referendum. The happy spinner is gone but be on the lookout for the arrival of the Alarmist Spinner Bird.

Thanks for that link Evotingmachine0197 - I wouldn't have missed youngdan's post for the world. It is almost worth seeing everyone's pensions crash and burn to have read it.

It is heading into interesting territory. Question now is where is the floor, when will it be reached, and will there be a bounce.

If over the summer it heads down below 4500 I will be sitting and watching movements very carefully. You are getting down into territory where you could easily get a good bounce, buy, take profit and get out once you have made whatever percentage. I would say that 25-30% starts to look possible. Should more than fix the roof on Squire Hall and builders are so much cheaper these days.

What stocks would you buy Squire ? Building like Kingspan, tech stocks or banking ? Banks have to improve in the long term although confidence isn't high these days..

I would spread it, a secure enough profit of 15% is a lot better than a risky 30%. When markets are on the up you get out and don't hang about trying to guess the peak. Take your profit and be happy with your lot.

Companies like Kingspan have been about, they have a good product range but what may hit them is the value of the Euro. I think EDM CECO in the north produce similar goods also the cladding systems that they produce will be in less demand with the drop in construction. In building even though there is a down turn we will always need concrete, cement, hardcore, bricks, timber etc.

Basically go for the boring and basic.

The Financial sector has taken a hammering. I would like to know a lot more about the financial position of the Banks if I was considering a longer term investment, but what we are thinking here is a quick in out. You would have to try and gauge public mood at the time you think it has bottomed out. Banking has to look tempting to some.

I like high tech but not so sure about investing in it in Ireland. THat is an area you really need to do your homework on and I think it is a 5 year commitment. The energy sector is the one to watch but which companies and what technologies?

Food/food sales - but go carefully. People will stop buying everything else before they stop buying food. Also alternative energies firms that have proven in-house development capacity.
Timber resources (Irish 'renewable').

The Celtic Tiger might as well not have happened with the place in which Bank of Ireland is trading. It is less than half of its value at its peak. It's dividend yield is a lofty 10%. In more placid times, the average dividend yield would have been about 4.5%. Do not retire this year. Work for another 2-3 years because at these levels, equity-backed pension funds are smashed.

Ard-Taoiseach wrote:

The Celtic Tiger might as well not have happened with the place in which Bank of Ireland is trading. It is less than half of its value at its peak. It's dividend yield is a lofty 10%. In more placid times, the average dividend yield would have been about 4.5%. Do not retire this year. Work for another 2-3 years because at these levels, equity-backed pension funds are smashed.

The collapse of the ISEQ has been an elephant in the room for the last year nearly. Why are journalists so silent on this? Most people don't get to choose when they retire.

I read a post recently that said that Irish pensions are often closer to saving schemes - i.e. low risk, low return. Hopefully that is true.

A lot of the boom profits have been sunk back into pension funds because of the tax allowances and will have disappeared there.

Funds are mainly spread outside as well as inside Ireland but the UK and US is on the slide too. I wonder does anyone independent monitor the performance of pension funds in Ireland?

Some to avoid.

We are heading into a period of tighter finances so people will cut back on;

Holidays, RyanAir etc I would shy away from.

Luxury goods, New televisions, etc. clothes, new cars, Frogs legs, anyone selling these sort of goods will have a hard year or two.

Pampering; The weekend in an expensive Spa, hair dressing etc.

It will be a few years of basics with few frills.

Paddy Power is a great bet(pardon the pun) and is virtually recession-proof. They're still trading like as if the ISEQ crash hasn't happened.

Look here;



They've consistently outperformed the ISEQ Overall and General. They're a good home for your money in the long run.

I'm not comfortable at all with the idea of gambling for a living; the Chinese are as big into it as we are into drinking, I hear.

The Lotto, sports, poker games fine but betting and speculating on international currencies and commodities which endanger access to food by ordinary Joes no thanks. Why is big scale speculation even allowed these days when the humble poker machine was outlawed years ago ? The poker machine made life miserable for some back in the eighties, that's why (to answer myself) but we allow shite to go on which makes life miserable for nations no problem.

Cap and Share !

Auditor #9 wrote:

I'm not comfortable at all with the idea of gambling for a living; the Chinese are as big into it as we are into drinking, I hear.

The Lotto, sports, poker games fine but betting and speculating on international currencies and commodities which endanger access to food by ordinary Joes no thanks. Why is big scale speculation even allowed these days when the humble poker machine was outlawed years ago ? The poker machine made life miserable for some back in the eighties, that's why (to answer myself) but we allow shite to go on which makes life miserable for nations no problem.


Cap and Share !

Thats Commmie talk Auditor

Auditor #9 wrote:

I'm not comfortable at all with the idea of gambling for a living; the Chinese are as big into it as we are into drinking, I hear.

The Lotto, sports, poker games fine but betting and speculating on international currencies and commodities which endanger access to food by ordinary Joes no thanks. Why is big scale speculation even allowed these days when the humble poker machine was outlawed years ago ? The poker machine made life miserable for some back in the eighties, that's why (to answer myself) but we allow shite to go on which makes life miserable for nations no problem.

Cap and Share !

Who cares? I've got money to make and a trading position to protect. Let the masses gamble away, they've got my dividend to pay!

I was looking at the cost of building a stadium for racing and the potential for profit. It is utterly staggering.

Yes the Chinese are serious gamblers, has to be genetic, if you want a business that would make billions it would be gambling related outlets in China. I was once involved with some Chinese one of them would gamble anything on the turn of a card. Sort of business partner you could do without!

Squire wrote:

I was looking at the cost of building a stadium for racing and the potential for profit. It is utterly staggering.

Yes the Chinese are serious gamblers, has to be genetic, if you want a business that would make billions it would be gambling related outlets in China. I was once involved with some Chinese one of them would gamble anything on the turn of a card. Sort of business partner you could do without!

And Macau is whipping Las Vegas and is the new world capital of gambling. Paddy Power will tap into that and will continue to turn a very strong profit.

Paddy Power, Tullow Oil, Dragon Oil and CRH would all be good buys on the ISEQ.

Paddy, Tullow and Dragon are preforming well. CRH's move into India is interesting. The scale of building work needed there is staggering but you run into all sorts of Government Control.

The Banking sector has to be looking seriously undervalued. If it wasn't for the summer holidays I would say we have to be nearing the bottom.

For most people this would be a good enough time to buy shares generally, if they are investing long term. If it drops a bit further in the next few years, in all likelihood, they will be back up plus some.

This is like the property bubble in reverse. In a bubble you get out before it peaks, but you buy in a bear market when you think it is nearing the bottom. Fortunately most wait too long in both circumstance. If it drifts lower over the summer there has to be a bounce. You have to ask is it likely to go below 4000 thats 40% of former value highly unlikely. We are at 5289 now , drifting below 5000 in low volumes I can see, but 4,500 would be really stretching it. We must be near the bottom. If it keeps on the way it's going the office furniture will be worth more than the share value.

Squire wrote:

Paddy, Tullow and Dragon are preforming well. CRH's move into India is interesting. The scale of building work needed there is staggering but you run into all sorts of Government Control.

yes, exactly. Paddy Power is recession-proof, so it'll continue to make money regardless. Tullow and Dragon are selling a very scarce good which is very important to the functioning of the economy, so they'll always be quids in. CRH is the weakest of the four yet it has solid fundamentals. It is a well-managed company who have buckets of experience in managing growth and acquisitions. In the long-run, they'll go up and the dividend will continue to be paid. They are not going to go bankrupt. They're as solid as the goods they produce.

Quote :

The Banking sector has to be looking seriously undervalued. If it wasn't for the summer holidays I would say we have to be nearing the bottom.

Definitely, AIB and BOI are seriously over-sold. I think the market has over-corrected and has an undue bearish bias. I expect this bias to unwind and for those two shares in particular to rally in the Autumn and Winter.

Quote :

For most people this would be a good enough time to buy shares generally, if they are investing long term. If it drops a bit further in the next few years, in all likelihood, they will be back up plus some.

This is like the property bubble in reverse. In a bubble you get out before it peaks, but you buy in a bear market when you think it is nearing the bottom. Fortunately most wait too long in both circumstance. If it drifts lower over the summer there has to be a bounce. You have to ask is it likely to go below 4000 thats 40% of former value highly unlikely. We are at 5289 now , drifting below 5000 in low volumes I can see, but 4,500 would be really stretching it. We must be near the bottom. If it keeps on the way it's going the office furniture will be worth more than the share value.

Indeed. I made the point to youngdan when he said the ISEQ should fall to 1000 that that would be below the break-up value of all the companies on the ISEQ. 5000 is a fair enough floor for the market and any activity below there is under value and does not represent fair value.

That post of mine should be read in conjunction with the one where I introduced the concept of the Spinner Bird about 10 days prior to that. If Auditor can paste it it would be great as I consider it much better.
Now this market is in serious trouble. It can not be compared to Wall Street because trading on the Street can be influenced by the Fed tinkering with interest rates but much more importantly money supply and outright minetizeation of assets. The ISEQ will not have these benefits as the ECB will play to it's own tune without regard of what is happening to the Dublin market. The Dublin market will find it's level on the fundamentals of the Irish economy. For this reason the ISEQ will behave like wall street from 1929 to 1933 when it's value was confined by gold and the dollar being fixed at 20 dollars an ounce. Later the gold was revalued up/dollar revalued down to 32 dollars an ounce.
Looking back we see that after the initial fall there was a bounce. More money was lost on this bounce by far than the origonal crash as everyone thought that a bottom was in. Trying to buy rallies in a falling market is a good way to lose a lot of cash. An investor but recognize a rising market and buy the dips. Then he must recognize a bear market and sell the rallies. This is not easy. I believe this is a bear marketm of great size that will bring it down to below 1000. I would watch for signs that the ECB were taking the Weimer way out through inflation. No sign yet but if this happened then it would be time to buy.
The temptation to buy on the way down is strong but it is fatal. Just because something is cheaper than it was does not mean that it is cheap. The truth of this is seen by just thinking back to where you thought things were cheap at 6000.

youngdan wrote:

This is not easy. I believe this is a bear marketm of great size that will bring it down to below 1000.

youngdan, why do you think that the ISEQ should be at 1000? Why are our companies so utterly worthless? Why should the ISEQ be about 20% of where it is now? It seems to be utterly excessive in my mind.

It sounds like a great deal but if my memory serves me right Wall Sreet lost a greater percentage. Today over yonder was interesting reading as it is the first time where I believe the nastiness that is just below the surface has openly erupted. The iseq thread is sidetracked with talk of scroungers being rounded up and maybe it was on the other thread where someone was hoping that all who came after 1992 would go home FOR THEIR OWN GOOD. We are both long enough in the tooth to know that soon posters will be calling for violence. If the mood in the country at large is the same as I was reading between the lines then this report has released some serious negativity.
I believe that the property market is not going to fall by say 30% it is going to crash. As I drove round Galway a few months ago I thought I was in Beverley Hills with the mansions. You wou need to be Al Gore to heat these monsters. As some of the usefull imigrants leave and Irish have to leave there will be no renters or no buyers. Last Sunday week the Indo had the dividend of BoI at 10% and the stock is down a lot since. The yield must be near 15 now.
We are now in a credit contraction in Ireland and it is only a matter of time till the bankrupties are announced. When this mini budget comes out the updated version of the problem will be aired.
Then of course you have outside influences adding to the mix. Even without a war there is some bad news heading your way. We are likely to see major defaults in the credit markets here. I see Ford and GM are sich looking but when a city defaults then the craic will really start. A medium town in Callifornia went bust recently.
You have always been optimistic and I bet you did not expect Allied to be below 10

youngdan wrote:

That post of mine should be read in conjunction with the one where I introduced the concept of the Spinner Bird about 10 days prior to that. If Auditor can paste it it would be great as I consider it much better.

youngdan wrote:

An excellent summation that ties two periods 31 years ago perfectly. As George Bush would say, Fool me once shame on me fool me twice shame on me in Texas.
I may have to rethink this bunk that some swallow here called global warming. Do I not see before my eyes the extinction of a bird that has been on the endangered list now for 2 years. He looks like a sparrow but is in fact called a Spinner. They are busy little birds and in the good old days were to be found flying about this thread merrilly chirping their happy tunes. They looked on the birds with less sweet voices with scorn. Now alas they are all gone. Tweet Tweet. As dismaying as this is I have noticed that another flock of these happy spinners have also vanished from the Hillary Treads. It is a crying shame. These little tweeties kept singing their happy tunes even when regular birdbrains realised theyto be none too bright. The last remaining spinners found in the wild now are a few chirping about how good it is to vote yes to Lisbon. Was it not drummed into the skulls of the spinners here how stupid it was for Ireland to hand over monetary control to a foreign body who cares zero about what happens to Ireland. The sad crew of cretins in charge now neither make monetary policy or fiscal policy but are entirely at the mercy of the Fates. What a crowd of treasonous plonkers. Those who voted for them deserve the good hodgering that is coming. All I have heard is that they are going to borrow more. Good luck in the present climate
However I think I will make a prediction. It was long been a dream to transform base metal into precious metal. We are about to see brain tissue transform custard in the heads of the party faithfull. This will be due to tremendous overload. As Anorak points out they are on automatic pilot to blame everything on d'isle. However a new order is coming down that carbon taxes must be levied to save the world. The lucky few will not recognise the paradox and will be saved. Th smarter ones will suffer a devastating overload and their eyes will turn yellow.

In response to Anorakphobia's post here
http://www.politics.ie/viewtopic.php?p=1186615#p1186615

Ard-Taoiseach wrote:

youngdan wrote:

This is not easy. I believe this is a bear marketm of great size that will bring it down to below 1000.

youngdan, why do you think that the ISEQ should be at 1000? Why are our companies so utterly worthless? Why should the ISEQ be about 20% of where it is now? It seems to be utterly excessive in my mind.

I agree with Ard-Taoiseach here dan - how can you say that buying on the way down would be fatal ? Do you mean any of the stock or just the banking stock ? The banks look teetering on the edge of getting bought by someone (or do they ?) - can you shed some light on what you think might happen down around 4500 which is where the Iseq seems to be heading... surely the bears will start to wake themselves up around then and pick up some of that stock. Even if the banks were to go down even more and were bought then your shares would be transferred to the new bank, wouldn't they ?

I think our banks are shite by the way and deserve to get hung out. Their services are feckin woeful to tell the truth. I opened a Halifax account recently because I wanted a debit visa card - one where i'm spending my own money, not Ling Chung Wong's in Shanghai or Singapore or Japan. The irish banks hadn't this facility ... ffs. I tried a Bank of Ireland Laser for a while but I think I'll have to take the forty quid out now soon before the Bank itself hits the fan.

youngdan wrote:

Looking back we see that after the initial fall there was a bounce. More money was lost on this bounce by far than the origonal crash as everyone thought that a bottom was in.

Like all bear markets quick in out. It is about trying to gauge what average Joe will think and do. The market is beginning to feel wrong. Quiet summer with downward drift and see if some better news starts to materialise in late summer.

youngdan wrote:

Trying to buy rallies in a falling market is a good way to lose a lot of cash. An investor but recognize a rising market and buy the dips. Then he must recognize a bear market and sell the rallies. This is not easy. I believe this is a bear marketm of great size that will bring it down to below 1000. I would watch for signs that the ECB were taking the Weimer way out through inflation. No sign yet but if this happened then it would be time to buy.

Getting it wrong in any market and you lose but I take your point.

When has the ISEQ last been below 1000. It must be back in the dawn of time. You have to be over egging the gloom. That is mass soup kitchen time. What level do you see unemployment reaching?

youngdan wrote:

The temptation to buy on the way down is strong but it is fatal. Just because something is cheaper than it was does not mean that it is cheap. The truth of this is seen by just thinking back to where you thought things were cheap at 6000.

Once the share value sinks below the value of the property and buildings of the company it is difficult to lose. In 2003 the FTSE went down nearly 50%. So 50% drops do happen often enough but beyond that is not that common.

In many ways this reads like the fall of 73-74 Oil hikes and the usual Banking stupidity. Then the FTSE-30 dropped to just below 30% of its value to bounce back to about 60% But there was all sorts of political mistakes 'taxing the rich till the pips squeeked' was one remark I came across that amuses (can't imagine any chancellor saying that now) and endless problems with Unions.

Is the situation now worse than that in the early 70s?

Thanks Auditor.
Why would it be assumed that the banks would be bought by another bank. If a bank has big debts on it's books who would want them. Individual stocks can go against the trend but it is hard to pick them.
The temptation to buy on the way down if you have some of the stock already is called averaging down because you no own the shares at a lower average price than what you paid for the most expensive ones. If Saratoga really was buying Bear Stearns that is what he did and got badly burned. I told him to sell at 104 dollars and he said it was a soundcompany and would buy more if it got cheaper. He may never have bought a share in his life for all we know but that way of thinking is common. It is fine if a stack recovers but if it doesn't it turns a loss into a very big loss.
Should a bank fail then there is a big problem. The shareholders lose everything but I question whether the government could raise the money to cover the depositors up to the level promised.