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

Dublin share collapse as big as Wall Street

Quote :

There have been no reports of stockbrokers standing on window ledges — yet —
but following Friday’s €3 billion share price collapse in
Dublin, the Irish stock market has suffered a bigger sell-off in the past
year than any major stock exchange in history. The fall puts it on a par
with the Wall Street crash of 1929.

This is mad stuff. Anyone willing a guess at the bottom ? I think Youngdan mentioned 1000 ??

EvotingMachine0197 wrote:

Dublin share collapse as big as Wall Street

Quote :

There have been no reports of stockbrokers standing on window ledges — yet —
but following Friday’s €3 billion share price collapse in
Dublin, the Irish stock market has suffered a bigger sell-off in the past
year than any major stock exchange in history. The fall puts it on a par
with the Wall Street crash of 1929.

This is mad stuff. Anyone willing a guess at the bottom ? I think Youngdan mentioned 1000 ??

It is a bit mad. It is to be hoped that Irish pension funds were well diversified out of the ISEQ. What are the chances of that do you think ?
The ISEQ is tiny compared with Wall Street. It is like comparing the fall of a sparrow to that of an elephant.

I suppose the bottom would be to close it down altogether.

It is very hard really to make that comparison. If a sparrow and elephant were both falling from a plane then a reasonable person would have hope for the sparrow. However not even Ard-Taoiseach could be so wildly optimistic that the elephant would fare well no matter how much flapping he did.

ISEQ is opening up following lead from Asia. I can't see this being sustained for long.

The sort of question that needs to be asked is, that given Galileo's experiments at Pisa, is why the Wall Street elephant isn't falling at 9.8 m/s/s.

It all has to do with the ears. If the space shuttle can glide to a landing surely an elephant can get the hang of it.

youngdan wrote:

It all has to do with the ears. If the space shuttle can glide to a landing surely an elephant can get the hang of it.

Yes, but that could take a few million years, given the slow pace of evolution from ears into aerofoils. And a good few elephants would be lost in the process.

Well that is if you believe in evolution. Creationalists are scoffed at. However look at the half assed bounce in Irish stocks today. If these fools don't believe in miracles then why are they buying.
However the slogan ears to aerofoils has a very nice ring to it. It is just the can do attitude that will be needed. A new party would do well to have a positive and optimistic vision like this.

4360 a few minutes ago. A new low ??

Here's the last 8 years. Maybe 4-5K is it's natural level.

EvotingMachine0197 wrote:

4360 a few minutes ago. A new low ??

Here's the last 8 years. Maybe 4-5K is it's natural level.

If you consider inflation 4-5K is a very poor investment.

What intrigues me is that 2002 was the high point of the Irish economy after which manufacturing started to slide and competitivity drop like a stone by seems to have been a long term low for the ISEQ. I suppose I'm only showing my ignorance of the market to assume that this would have any bearing on things ?

It's heading for 4300 now.

On the inflation comparison we're apparently going to get stagflation now with the cost of goods going up and productivity falling. Luckily I got some bargains recently before prices hit the ceiling altogether. (see bargain thread)

Its well down on 4,300... is heading for 4,250.

Mmm, time for another musical interlude;



I think youngdan's prediction is going to come true. This market stopped making sense months ago.

While we're here, can someone explain how the ISEQ overall index is calculated please.

Is it the total of the top 100 share prices or something like that ?

EvotingMachine0197 wrote:

While we're here, can someone explain how the ISEQ overall index is calculated please.

Is it the total of the top 100 share prices or something like that ?

It's a composite index of all the 60 publicly-quoted companies in Ireland. That means that if AIB accounts for 10% of the index, then a 10% rise in its shares will add 1% to the index.

Every company has its own weight and the percentage change of each company's share price is multiplied by their weight to come to the overall percentage change in the index.

The ISEQ was calculated and based at 1000 all those years ago and all changes since then have been expressed as a percentage of that initial base. It is re-based from time to time. I would imagine a re-basing would've occurred if the bull market continued and we reached somewhere near 15,000.

Ard-Taoiseach wrote:

EvotingMachine0197 wrote:

While we're here, can someone explain how the ISEQ overall index is calculated please.

Is it the total of the top 100 share prices or something like that ?

It's a composite index of all the 60 publicly-quoted companies in Ireland. That means that if AIB accounts for 10% of the index, then a 10% rise in its shares will add 1% to the index.

Every company has its own weight and the percentage change of each company's share price is multiplied by their weight to come to the overall percentage change in the index.

The ISEQ was calculated and based at 1000 all those years ago and all changes since then have been expressed as a percentage of that initial base. It is re-based from time to time. I would imagine a re-basing would've occurred if the bull market continued and we reached somewhere near 15,000.

Oh. Not as straightforward as I imagined so.

So if a new company joins the index, are the weights re-distributed so as to fit the new company in , without affecting the index ? Or will the index be affected.

EvotingMachine0197 wrote:

Oh. Not as straightforward as I imagined so.

So if a new company joins the index, are the weights re-distributed so as to fit the new company in , without affecting the index ? Or will the index be affected.

Yep, the weightings of each company are affected by the entry of a new firm. It's like a whole number of people sitting on a couch. The companies are the people and the index is the couch. When a new person sits down(ie, has an IPO), everyone else has to bunch up to admit the newbie. The amount of couch taken up by each person is each company's weighting in the index. The weightings change with new entries but the couch or index remains unchanged.

Auditor #9 wrote:

It's heading for 4300 now.

On the inflation comparison we're apparently going to get stagflation now with the cost of goods going up and productivity falling. Luckily I got some bargains recently before prices hit the ceiling altogether. (see bargain thread)

The way the ISEQ is falling there are going to be some very real bargains eventually. The further and harder it falls the greater the likelihood of a strong rally. Problem is trying to guess where is the floor going to be? Right now indications remain down, but eventually this will change.

Santander had its bid for Alliance and Leicester accepted. It acquired the Abbey National in 2004. With dropping share values, bids, friendly or otherwise, will become more likely.

Ard-Taoiseach wrote:

EvotingMachine0197 wrote:

Oh. Not as straightforward as I imagined so.

So if a new company joins the index, are the weights re-distributed so as to fit the new company in , without affecting the index ? Or will the index be affected.

Yep, the weightings of each company are affected by the entry of a new firm. It's like a whole number of people sitting on a couch. The companies are the people and the index is the couch. When a new person sits down(ie, has an IPO), everyone else has to bunch up to admit the newbie. The amount of couch taken up by each person is each company's weighting in the index. The weightings change with new entries but the couch or index remains unchanged.

Interesting and kinda hard to imagine it. Do you know what that base is based on and is that why different indexes have different numbers i.e. the FTSE and Dax are around 5000, the Dow is nearly the same now as ours was a year ago. Hong Kong is 600 or something...

Squire wrote:

Auditor #9 wrote:

It's heading for 4300 now.

On the inflation comparison we're apparently going to get stagflation now with the cost of goods going up and productivity falling. Luckily I got some bargains recently before prices hit the ceiling altogether. (see bargain thread)

The way the ISEQ is falling there are going to be some very real bargains eventually. The further and harder it falls the greater the likelihood of a strong rally. Problem is trying to guess where is the floor going to be? Right now indications remain down, but eventually this will change.

Exactly. It should reach some sort of floor this year where it stays around for a good few months. Then would be the time to get in and start bottom-fishing. I'd imagine that'd come in the third quarter of this year. The falls are catastrophic at the moment.

Ard-Taoiseach wrote:

Squire wrote:

Auditor #9 wrote:

It's heading for 4300 now.

On the inflation comparison we're apparently going to get stagflation now with the cost of goods going up and productivity falling. Luckily I got some bargains recently before prices hit the ceiling altogether. (see bargain thread)

The way the ISEQ is falling there are going to be some very real bargains eventually. The further and harder it falls the greater the likelihood of a strong rally. Problem is trying to guess where is the floor going to be? Right now indications remain down, but eventually this will change.

Exactly. It should reach some sort of floor this year where it stays around for a good few months. Then would be the time to get in and start bottom-fishing. I'd imagine that'd come in the third quarter of this year. The falls are catastrophic at the moment.

Isn't everyone thinking the same thing? Some may cast their lines too early. Plenty of casting going on already by the look of some of the mini spikes.

Squire wrote:

Santander had its bid for Alliance and Leicester accepted. It acquired the Abbey National in 2004. With dropping share values, bids, friendly or otherwise, will become more likely.

Takeover of the Irish banks is not something I would look forward to, no matter the sins of the past. Stiglitz makes the point that local banks lend money to local people, whereas the big international boys only want to lend to global corporations.

A figure thrown out in the lunch time news is that retail sales are down to the level of 21 years ago (and falling).
Unemployment will follow as sure as night follows day. A lot of people were pushed into taking on mortgages as public building of social housing was at a stand still for the last fifteen years. Defaults seem inevitable.

EvotingMachine0197 wrote:

Ard-Taoiseach wrote:

Squire wrote:

Auditor #9 wrote:

It's heading for 4300 now.

On the inflation comparison we're apparently going to get stagflation now with the cost of goods going up and productivity falling. Luckily I got some bargains recently before prices hit the ceiling altogether. (see bargain thread)

The way the ISEQ is falling there are going to be some very real bargains eventually. The further and harder it falls the greater the likelihood of a strong rally. Problem is trying to guess where is the floor going to be? Right now indications remain down, but eventually this will change.

Exactly. It should reach some sort of floor this year where it stays around for a good few months. Then would be the time to get in and start bottom-fishing. I'd imagine that'd come in the third quarter of this year. The falls are catastrophic at the moment.

Isn't everyone thinking the same thing? Some may cast their lines too early. Plenty of casting going on already by the look of some of the mini spikes.

Partly. Some of those rallies are just short covering. People are buying positions to support their bearish positions and to ensure profits from them.

I ain't buying till I see a floor and we aren't there yet.

EvotingMachine0197 wrote:

Isn't everyone thinking the same thing? Some may cast their lines too early. Plenty of casting going on already by the look of some of the mini spikes.

If everyone is thinking the same you get one almighty spike. Hence a quick in out may be a good strategy initially, as it will rise, people will take profit and it will then fall. You then buy again, but depends at what level the floor is, if very low stay in may be a sensible option.

Yes if you jump in too early you lose money but if it is at a sufficiently low level and it is money you don't need, if you can sit it out you will probably do fine in the long run. Right now looks like we are going to go through 4000 and it is just a matter of keeping an open mind and try to weigh up sentiment.

Dollar is on the slide again.