I admit to not understanding what you mean.Most of us know how markets work by now, what you've got to ask yourself is how most stocks will continue to increase profits with what's going on around the world.
The market makers always make things look dandy until the last minute, FOMO and bang, all your money is gone.
There is an old saying which may relate.....
"A fool and his money are soon parted"
As with anything, if the facts change then so will my opinionYou are describing Mercantilism, it only makes sense at face value, not in reality.
Stock markets, mostly Australian. How will companies increase their profit margins with Trump continually looking for ways to punish any country that he thinks is aiding China or ripping them off?I admit to not understanding what you mean.
Markets are complex.
Is there a specific type of market you are tallking about, or are you just generalising on the key roles of supply and demand in economics?
First, stock markets are not a good indicator of any nation's economic situation.Stock markets, mostly Australian. How will companies increase their profit margins with Trump continually looking for ways to punish any country that he thinks is aiding China or ripping them off?
For e.g. look at the garbage the US is going on about buying US beef, why the hell would we want to buy US beef?
Like I said, there will be stocks that will do well by what's happening on the world stage, but it could all turn at the drop of a hat.
Large Intso's control the market; there's no reason for iron ore stocks to go up, the IO price is at its lowest in years, yet IO stocks are going up. I've seen IO miners go up and down over the past 1 year with no logical reason, just pumps from the big money.
At the end of the day, if stocks aren't turning increasing profits, what are they really worth, or what's a promise worth?
As with the internet or before that other examples eg cars, electricity or sound recording, the hard bit is foreseeing not just the obvious uses but the eventual consequences.Artificial intelligence will continue to be disruptive, and it's a challenge to spot the opportunities and beware of pitfalls.
You have to factor in many changes in the markets, contracts can go for years or get delayed but in long run it's about how profital a company is and if it's not it finally catches up to it. People speculate and when the company fails to produce the SP drops and if it's early stages of its life it will make nearly imposssible to capital raise.First, stock markets are not a good indicator of any nation's economic situation.
In nations with their own stock market, a very small number of companies are responsible for moving the dial, so to speak. In our top 5 by value 3 are banks while the others are BHP and CSL. Only CSL stands to be significatly affected by Trump's tariffs. You will find that the next 5 by value are similary unconcerned by tariffs.
So regarding your first point, Trump and his tariffs are mostly irrelevant to our listed company's profits.
Regarding IO prices, take a trip to China and see the ongoing infrastructure development (non-commercial properties) and you will quickly see why the bottom of the IO market won't fall any time soon. Next, China's BRI is adding to steel demand in developing countries at a rapid rate. And finally, increasing levels of global electrification and robotics are propping up demand.
I don't understand your last comment. Companies list to achieve a viable financial operating base, and support this with a business plan that outlines their proposed profitability. A small number of companies are speculative from the outset (principally in the mining sector) and investors take a risk on that basis.
The fact that any particular company is not profitable (or offering dividends) today does not imply its situation cannot change. I joined ASF almost 20 years ago to share the views and experiences of real people - not pumpers and dumpers - who could explain why they considered a listed company was heading in one direction or the other.
1. Yeah, I don’t get how any of that is in disagreement with what I have said or what Adam smith wrote in his economic theory.1. As with anything, if the facts change then so will my opinionbut I'll raise the following:
Fundamentally the economy is physical not financial.
The reason you can purchase a service is because someone applies a combination of their skills and labour, and usually at least some use of purchased goods, in order to provide that service. They're not doing it for free, and they have expenses in providing it too.
The reason you can purchase a car is because someone else manufactures cars, someone upstream of that produces steel and aluminium, someone upstream of that mines iron ore, coal, bauxite, and so on. A long chain of companies and individuals are involved with making that car.
Even for intellectual property, the author, band or whoever wrote the code isn't giving it away. It might cost nothing to replicate it, but it took a lot of time, skill and effort to create in the first place and they want payment for that.
2. Now what's stopping any random poor country from just buying everything they want and hey presto, now they've got the same as everyone else? If the flow of funds out of the country isn't a problem then logically they'd do exactly that.
I'm not following the logic here....
@Dona Ferentes , I think that it's just a pullback that's coming before continuing higher. I try to follow the money and see money coming into a number of sectors, Tech & Finance are two of them and as you would know these sectors hold weight in the index.so a looming top , eh?
Why I'm confused, is that's also essentially my original point.1. Yeah, I don’t get how any of that is in disagreement with what I have said or what Adam smith wrote in his economic theory.
2. Well to purchase things a poor country needs things to trade,
1. No, you were making it a point that it would better for the economy to warped in a way by government to try and make money circulate inside the country that leave its borders.1. Why I'm confused, is that's also essentially my original point.
2. That if we assume a country is to import various things, which realistically it will if it's to be anything resembling a modern society, then it needs to export to balance that. That being so, capital and labour needs to be deployed into industries that produce something for export - just serving the local population, even if that's a strength in terms of productivity, isn't meeting the requirement to have something to sell to others.
Thanks Dona, I was transposing my opinion of the US market onto the ASX. Example of posting without reading all the information available.don't want to interrupt, but ...
David Rogers
‘It’s dangerous’: The ASX is overvalued so buckle up for a reality check
The ASX 200 has roared back to life since its February-April swoon, setting a record high daily close of 8597.75 points on Wednesday. The trouble is, the rebound has been entirely driven by a price-to-earnings multiple expansion.
Unlike the US market, where consensus earnings forecasts have been revised up because of the ongoing boom in artificial intelligence, ASX earnings estimates have been revised down since April.
The result is that the next 12 months PE multiple of the ASX 200 has soared to around 19 times, a level only exceeded during peak fiscal and monetary policy stimulus in the pandemic.
The long-term average “forward PE” for the ASX is about 14.75 times. On that basis it’s about 29 per cent overvalued. Some will focus on cyclically adjusted PE multiples but on face value it’s expensive.
Another way of looking at it is the ASX 200 now exceeds Bloomberg’s “bottom up” derived index level (using the consensus 12-month price targets for all companies in the index). The 20-year average is a discount of about 379 index points. The physical index now exceeds that long term average by about 80 points...
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I am not sure where you are heading as it appears to have nothing to do with the thread title.You have to factor in many changes in the markets, contracts can go for years or get delayed but in long run it's about how profital a company is and if it's not it finally catches up to it. People speculate and when the company fails to produce the SP drops and if it's early stages of its life it will make nearly imposssible to capital raise.
If you follow sectors of the market, you'll see different movements at different times, not talking about ASX in total.
Have a look at the price line and that's factoring in losses from inflation and improved mining processes over the years. Speculate all you like the facts are there in front of you. Have you also got a crystal ball to tell us when the next industrial boom will start?
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