Thanks Motorway - i'll check out the website. If you get the book, wouldn't mind your opinion on it. Cheers
Originally Posted by motorway
In the previous post some examples of optimistic books published at the DOW 2000 top. However, in contrast, only 3 years later investors were divorcing the DOW - again at the wrong time.
What does this really say about the so called "experts" that the masses listen to? It's fine when the bull market is in an obvious run, but near the end many of the "experts" are all in - and this is the problem - if nearly everyone is "all in" who is left to buy?
It's a catch 22
Most will not listen to pessimistic views when the mood is at an optimistic extreme when everyone around you is screaming "buy" - the crowd simply wants more optimism. It just not human nature to listen to a lone voice in the crowd until it's too late.
Wrong Decision at the Wrong time
What do most companies do in a recession? They downsize. When do they downsize? Usually near a major bottom or near the start of a major bounce. Downsizing near a major bottom is probably the wrong time as you would soon want to ride the next wave of optimism up. If your business requires a significant ramp-up then you may soon find you'll be competing for skills as the bulls dry up the talent.
Ideally you'd want to start to downsize near a major top or when major projects come to a close (sometimes prematurely due to contractions in the money supply).
The A380 Darling
Qantas invested in the A380, ordering 12 aircraft:
2006: Qantas orders 12 more A380s
2009: Futuristic jets put on hold by recession.
......Qantas's decision yesterday to defer buying four of the $350 million superjumbos has raised questions about whether the planes it once described as an aviation revolution would survive the economic downturn.
Having crowed last year about being among the first airlines to buy the A380s, Qantas has now become the latest in a long line of carriers - others include Air France, Lufthansa and Emirates - to defer, cancel or reduce the role of the aircraft.
Qantas will also defer orders for 12 Boeing 737-800s and is discussing with Boeing a delay in the delivery of the first batch of its 787 Dreamliner aircraft......
Looking at the dates - QANTAS has made the wrong decisions at the wrong time - Investing heavily near a top, and de-investing at a major bottom. In only three years the luxury A380 darling became an albatross around the airline's neck - not because of poor engineering, but due to poor timing that has probably led to wasted $Millions.
The airline industry creates some very significant signals prior to major tops - that we shall soon see....