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A Few More Big Reasons Why We Shouldn't Fear the Present Crash.

By Malcolm Stacey | Saturday 10 February 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello, Share Changers. I know a lot of you worry about this Wall Street mini-crash. But your fears are probably unfounded. We’ve had a bull market lasting eight years. A correction was necessary. But it’s not been as bad as some writers on this magnificent website have been predicting. Neither will the big sell-off last.

I’ve put forward my arguments for a fast recovery recently. But here are some more. Shares have been soaring too fast. But they rise for a reason. And that reason is a quick-growing world economy.

Here in Blighty, we keep hearing that our GDP growth is poor. So it is. We have weak politicians and the mess over Brexit to content with. But growth is galloping ahead in the rest of the world. And for most of our companies, that’s where the customers are.

The global growth is boosting established economies and emerging countries, indeed continents. Africa is doing well. Asia is doing well. Europe is doing well.  America is doing well.

The reason shares are on a stronger footing than usual during a long bull market is that buying is spread across the board. In1999, when there was a nasty crash, certain stocks - the so-called new economy (the techies) were galloping along out of control 

All other shares were only rising modestly but were still affected by the crash. For the crash of 2008, the financials had been adding unjustified share value too fast. Other shares had not risen as much, but they were also dragged down.

But now nearly all shares have been rising.Every sector attracts roughly the same degree of support. We can thank healthy world growth for that. Because you can’t have a recession when you have growth. And it’s the slumps which truly destroy stock values.

The other big dips, like the one we’re seeing now, is not subject to the same negative forces that cause crashes that last. So for this old punter, my shares are not for sale.

Neither is the Punters Return., God bless

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