Another day in paradise...Japan reports GDP down at an annualized 12.7% for the fourth quarter of last year and the Nikkei is down a mere 0.38% for the day?!?!? Oh, yeah, I forgot...that was priced in already, uh huh, yup priced in already (everybody is so forward thinking) Ok, less sarcasm here - how much of this crap is REALLY "priced in already" and how much are people saying "priced in already" when they don't have an f'ing clue as to why the markets aren't down a LOT further? I for one think things should be down a lot further...but, I have been wrong once or twice before as well -gastropod
Kind of like in the US. Missed earnings, slashed estimates, 5-600,000 job losses per month, etc. And they smugly claim, "it's all priced in"...
THANK YOU!!!! An honest individual! That is what I think - it is total crap. Like this one - who the hell saw Japan tanking this badly? Yes, some people saw Japan going south - but, an annualized 12.7% - no way - so why the hell didn't it REALLY tank - I may never know. I can draw up beliefs like a Japanese variant of the PPT - I know they play the currency market, so heck, why not their own stock market? Hmmm, I'll have to think some more -gastropod
I believe the expectation was down a little over 11%, so being off by less then 10% of what was expected is not earth shattering especially in trading terms. However to see a major economy down over 12% annualized regardless of what was expected is pretty amazing.
If they're so smart as to be able to accurately determine what's "all priced in", how come they didn't have that same forward-looking vision to dump/short stocks, or buy treasuries a year ago?
Priced in? I think not. It is only a month since Lloyds Banking Group, reassured investors that there had been no deterioration in HBOS's balance sheet in December. Now it says it will report £4 billion of mark-to-market losses on its treasury book and -- most worryingly -- £7 billion of impairments on its corporate loan book. And this was a bank whose greatest risk was thought to be its exposure to the U.K. mortgage market http://online.wsj.com/article/SB123456838710486107.html
Just wait a couple of days for the professionals to get their ducks in a row. They are busy selling their long positions and going short while telling the naive that everything is okay. The 12% drop was already "built" in the expectation. Just be on the safe side and limit your long side exposure.
This market is far from pricing in what's ahead. This market has a long way to go before anything is priced in.