Companies issue record amounts of stock - time to get out of the market

[Canadian]

Here is an interesting articles for all the bulls :p, and a short quote from it:


In fact, firms have recently issued far more shares of their stock (either through initial public offerings or secondary offerings) than they did even in the go-go years of the late 1990s and at the top of the Internet bubble in early 2000.


http://finance.yahoo.com/retirement/article/107201/supply-and-demand?sec=topStories&pos=8&asset=&ccode=

[Tightwod]

Why is it a bad thing? The article does not go into facts about whether the shares are being issued from treasury or if they are even common shares. I have seen a huge number of companies issueing shares recently. Why are they doing it? To raise capital. Why would companies raise capital? Maybe because they see great opportunity to acquire other companies at rock bottom prices. Maybe they need the capital to refinance some debt that is too high an interest rate for more fqavourable terms. These are good things for the companies that are raising capital no??

[Canadian]

Why is it a bad thing? The article does not go into facts about whether the shares are being issued from treasury or if they are even common shares. I have seen a huge number of companies issueing shares recently. Why are they doing it? To raise capital. Why would companies raise capital? Maybe because they see great opportunity to acquire other companies at rock bottom prices. Maybe they need the capital to refinance some debt that is too high an interest rate for more fqavourable terms. These are good things for the companies that are raising capital no??

It's logical for the companies to issue new shares when the price of their stock is high not low. This way there's less dillution for existing shareholders and at the same time they are raising more capital. This is a vote from the companies issuing shares that they think the market is overbought.

[bullish]

Why is it a bad thing? The article does not go into facts about whether the shares are being issued from treasury or if they are even common shares. I have seen a huge number of companies issueing shares recently. Why are they doing it? To raise capital. Why would companies raise capital? Maybe because they see great opportunity to acquire other companies at rock bottom prices. Maybe they need the capital to refinance some debt that is too high an interest rate for more fqavourable terms. These are good things for the companies that are raising capital no??

Exactly! There are lots of bargains in many markets right now, and I don't think this will last forever. If you don't buy now you might miss the next strong leg up.

[Steven]

Exactly! There are lots of bargains in many markets right now, and I don't think this will last forever. If you don't buy now you might miss the next strong leg up.

I'd rather miss the next leg up, than risking my capital at this point.

[Canadian]

I'd rather miss the next leg up, than risking my capital at this point.

I don't think you are missing anything at this point, unless we are talking shorting the market ;).

[trent]

I also think that there will be another general stock market crash very soon. The fundamentals do not support higher stock prices, as earnings are dismal.

[Tightwod]

It's logical for the companies to issue new shares when the price of their stock is high not low. This way there's less dillution for existing shareholders and at the same time they are raising more capital. This is a vote from the companies issuing shares that they think the market is overbought.

Disagree...:)

[Canadian]

Disagree...:)

Fair enough :). Tell me then, where do you see Dow and S&P by the end of the year?

[Tightwod]

I see both higher than today. Modestly. As soon as the earnings start to show signs of recovery people will jump on the wagon again. Markets are Manic depressive, they are currentlty oversold, modestly. They were most depressed in March obviously.

[Canadian]

I see both higher than today. Modestly. As soon as the earnings start to show signs of recovery people will jump on the wagon again. Markets are Manic depressive, they are currentlty oversold, modestly. They were most depressed in March obviously.

I think both Dow and S&P will be lower (10-15%) by year end. Did you see the GE profit decline?

http://finance.yahoo.com/news/GE-2Q-profit-falls-49-percent-apf-2602881202.html?x=0&sec=topStories&pos=2&asset=&ccode=

[Rickson9]

I think both Dow and S&P will be lower (10-15%) by year end. Did you see the GE profit decline?

If this is going to come to pass, it better come soon.

2009 YTD
DOW +10.6%
S&P +16.3%
S&P/TSX +26.5%
NASDAQ +33.4%

[Canadian]

If this is going to come to pass, it better come soon.

2009 YTD
DOW +10.6%
S&P +16.3%
S&P/TSX +26.5%
NASDAQ +33.4%

Have patience, October is historically the worst month for stock markets, and we are almost there. Have you seen the markets today?

[Tightwod]

I think both Dow and S&P will be lower (10-15%) by year end. Did you see the GE profit decline?

http://finance.yahoo.com/news/GE-2Q-profit-falls-49-percent-apf-2602881202.html?x=0&sec=topStories&pos=2&asset=&ccode=

GE on July 17 = $11.65, Today (down 3%) and still above $16.00.

Fear Greed, Greed the fear!!

[trent]

GE on July 17 = $11.65, Today (down 3%) and still above $16.00.

Fear Greed, Greed the fear!!

So what's your opinion on the GE stock, is it a buy right now?

[Canadian]

The stock markets are way overpriced in my opinion. If they fall 30-40% from these levels I might become interested, but now...no thank you.

[Rickson9]

Have patience, October is historically the worst month for stock markets, and we are almost there. Have you seen the markets today?

Less than one week to go before the end of Oct.; we might have to extend the deadline...

2009 YTD:
NASDAQ +34.4%
S&P/TSX +24.9%
S&P500 +17.7%
DOW +12.3%

[Canadian]

Less than one week to go before the end of Oct.; we might have to extend the deadline...

2009 YTD:
NASDAQ +34.4%
S&P/TSX +24.9%
S&P500 +17.7%
DOW +12.3%

Looking at the market action in the last few days, I don't think we have to extend it by much :).

[Rickson9]

Looking at the market action in the last few days, I don't think we have to extend it by much :).

Market indicies have definately been coming down over the last few days!

2009 YTD

NASDAQ +29.8%
S&P/TSX +21.5%
S&P500 +15.5%
DOW +11.6%

[Canadian]

Market indicies have definately been coming down over the last few days!

2009 YTD

NASDAQ +29.8%
S&P/TSX +21.5%
S&P500 +15.5%
DOW +11.6%

And today we have more of the same. I wonder how long it will take for investors with nice gains to panic and hit the sell hard?

[Rickson9]

"Every time we get a dip everyone says, 'Ah!' the cataclysm that everybody has been waiting for since spring!"

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