ASX, Rub Gilmore, Tony discussed on Shares for Beginners
Welcome back to shares for beginners UNFIL- mascatello listening to this. Podcast will be aware that I normally discuss topics of a general nature only with guests. We don't talk about market conditions happening. However I know there's a lot of fear emotional turmoil game on at the moment so let's pour some oil on troubled waters of US Coniston from the Qa podcast to come back on so that we could ally some of those fees tiny feel faithful at the moment. So I emailed Tony yesterday and mentioned difficult times and Hema email back saying situation normal hence the name of this episode. There's also a few moments at the end of this podcast from Rub Gilmore about the oil prostitution because it's not all about the corona virus. You may remember rob as the first guest ever on this. Podcast dropped around this morning to give us insight into the oil price. What's volatile and why it has an effect on markets so we're recording this on Wednesday march eleven at ten. Am The markets are just opened? We're having not having a look at this before that at this stone. I look at it that often. I guess at this time I look at it. Maybe two or three times a week so on Monday the ASX two hundred. The top two hundred shares on the Australian Stock Exchange dropped seven point three three percent that was after dropped around thirteen percent in the previous wakes the moves on the New York Stock Exchange of being similar yesterday the ASX. Two hundred closed up about three percent after opening three point. Eight percent lower overnight the US is up nearly five percent. These gyrations quite funky and wild yet tony. You're remained sanguine. Why well I think what's happening with. The market's going up and down at the moment in particular is people reacting to stimulus to what Elliott is assigned. What's happening with light as reports of spread of Corona Vars? So they're acting to news and we can't lose sight of the fact that the share market is a market it's people trading with people and therefore subject to human psychology. Which is the study of behavior? And we we need to have a framework to deal with that and the framework which says this is how I approach investing on buying shares in companies and. Yes they tried it on and isn't subject to psychology so I have to have that framework operating in that kind of real environment but I can't be blowing sided. Bought it by human psychology. And I think that's what's happening in the market at the moment is is people are I guess because the news tends to focus on share markets at this time it is becoming top of mind and people's awareness. It's a bit like we've all worked in offices where there's one person who always begins a conversation with have you heard the lightest and that kind of person is kind of dominating the market at the moment and we need to be polite to that person we need. Basically in there will be times when there's big falls and we have to decide whether we're borrow seller and there'll be times when those big Roy's is and we have to decide whether we were borrower seller but that's part of being an invest up and before the podcast go talking about Warren Buffett. And he's quite we need to be fearful when people are greedy and greedy people fearful now. We had the faithful when people are greedy activity last year and they were having the greedy when people are fearful top event this year. I'm not saying that people should be buying into the market at the moment but should have an idea of what will be a situation when they'll bind to the market and I have a framework. I guess I need to put a caveat ramble. I'm talking about here. I'm trying to give people a boss. I'm trying to tell people do and that's different. I think whether you fall is up to you and what we're all about on air podcast. The podcast is to teach people how to think for themselves and to deal with markets. And I have a framework and the framework used to look look for the quality companies and look for them when they're at value and at the moment there are lots and lots of companies in that situation. But what we're doing is well on on waiting for the sentiment around those companies to start to turn. That might not be. It might be tomorrow. It might be in six months time in twelve months time but That's that's what I'm looking for and we talk about what we call a three point. Trend Line graph. Some people talk about moving averages so basically it's when the short-term sentiment in the market overtakes the long-term sentiment in the market and when we see that starting to happen then we'll we'll be a bar in this market but there are plenty of opportunities to to boy. So what would you say to someone? At the moment. I mean it's a psychological thing and because of all the headlines and because of all the media making a big deal about it and Italy's in lockdown if your new to the market and you're not sure what's going on. This is probably a learning experience for you because this kind of corrections happens. Every six or seven years. It's basically wants the sokoll event in the shamrock. So I get used to it as we said before situation normal. These things happen. I think the last one happened like there was a ten to twenty percent correction about December. Two Thousand Nineteen so so. I don't panic. I guess as the message by the same token if you're scratching your head saying okay become during this process but I don't know what to do then I would be hesitant to start trying to guess and trying to put money into the market if you really don't know what you're doing this Nairobi. The learning point in price for a new sharing vista. Maybe I don't know what I'm doing. I don't have the stomach for this gone. By Elicit Investment Company Anita or put my money in industry super fund or or a life fund off think. That's a very legitimate tyke out to have from this the last two weeks in the market and I think that's a very smart thing to do if you're feeling at all squeamish or at sea or not confident with what you're doing you can. You can certainly keep learning and maybe even running a paper portfolio during this process and see how you went and that's part of the learning process but if you are answer and don't don't take a risk put the money into a into a fund because this has been a very recent event. I mean people might have been buying an ATF three weeks ago. Yeah and this is. This is the first time they've been hit with it. So it's just a learning experience really. Isn't it something to think about and really stick with it? Yes Oh exactly want shouldn't think this would deter people from being ashamed. This is what I'm saying. Is this happens? This is normal for a shame market but if you are feeling squeamish or unsure what to do maybe maybe direct investing isn't for you but maybe in the future and so keep keep at it and learn through this process but I remember I call the GMC my my University of course in in share investing. And before that when I first started investing and did.