Fundamental Ducks

chump

Well-known member
Dec 12, 2003
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#1
So climb aboard the footsie express ;) ...rate cut looking a good possibility ..traditionally forces share prices up ..Olympics ..feel good factor ..traditionally forces share prices up..companies awash with cash to give back to shareholders..traditionally forces share prices up..

Now why don't we consider another reality...

When interest rates come down ...so does the strength of our currency when there are rosier alternative investments to be found elsewhere and are there ?..well we validate that by watching the pound ..is it weaker or stronger against our trading partners?...take a look ..it isn't pretty...so what ?..well so what is that a weaker pound means that mostly everything we import for consumption either individually or corporately becomes more expensive and impacts on our bottomline ...
To offset that impact on the bottomline we have to lose some costs or make more sales ..one of the 'lines of least resistance' in shaving costs is to shed some jobs or individually buy less ..but shedding jobs ultimately means there are less people our there able to buy our goods which we need to sell more of ..buying less means not buying more goods ...quid pro quo ..but what about trying to sell more..well the line of least resistance is we try make a more competitive price ..but of course this means we make a little less on every item we sell..or if we are trying to sell more of our labour we need to find more markets for it ..but if people are buying less and companies shedding jobs...quid pro quo ....

So let's think....Asda cuts 1400 jobs..this is the second largest supermarket in the country selling basic necessities of life ..food blah blah .. already very competitive on price ..blah blah..does this look good for growth prospects..just how many rate cuts are going to be required to generate enough funds to buy more basic necessities and what does this imply for those purchases which are not necessities ?

I think I might define euphoria as that moment when several ducks all appear in a line at a particular moment so that no one except the blind can actually miss seeing them...this draws the attention to such a sharp focus that no one looks beyong this unique situation/opportunity to ask why have these ducks suddenly all appeared together and what may happen if a couple decide to fly off.....enjoy your moment of euphoric hypnosis ,but remember to get your wallet nailed down why you're busy getting mesmerised.