i heard an interview of a very good economist (but sadly dismissed by mainstream media)explaining why the market is behaving this way...
his answer is that, it's adjusting back to reality and the reality is that we (ie the global economy) are not as rich as we thought, in fact, much poorer..
all the wealth was an illusion from all the fake money printed out of thin air to feed ponzi-scheme like economic activities..
ppl look ard, they see nice condos, posh complex, shopping malls, luxury cars, etc, and they cant believe we are poor.. but this is exactly why we are poor, these are unproductive assets, and real resources were directed to these unproductive assets..
a severe recession is already here, but it's a much needed adjustment process.. if central bankers do not allow the market to do its job of flushing these activities down the toilet (ie letting banks bankrupt, property prices to fall), the recession will mutate to a depression
Vincent, The last time it went down to 800 was I think in 1990 during the first gulf war. It has not gone down to that level for the last 18 years even during the 97 financial crisis.
I think 1200 is safe to invest and with Singapore just got into recession with the index standing at 2000, it is not safe to enter the market as surely more bad news will come in the next 12 months and the index will drop.
I think the stock market will go down further. Why? Cos my stocks custodised at a local brokerage firm has all been lent out to Covered Short Sellers. Until the day they stop borrowing my stocks, i believe they will be shorting the market to depress prices. You can check out the stocks that are borrowed from me via www.sgdividends.blogspot.com. But first i have to find a scanner!
I don't think I'm going to invest in anything in the near future except for ultra safe and principal protected stuff. If I want to take risk, I'll rather start my own business, the returns is much better. Hard work, sure, there's no such thing as overnight success.
It is amused to see people letting their brokers lend out their shares to short-sellers, which is obvisouly works against their own interest.
I also think that insurance companies, pension funds and asset management companies break their fiduciary duty to their investors, if they allow their brokers lend out their shares to short-sellers.
Actually,regarding people lending out shares to other people, it is not really against their own interest if you are a long term investor. In fact we have more control over the situation.
Firstly, we earn an interest income. (nearly risk free).
Secondly, we know first hand what stocks will be shorted and we can prepare to put money in when we see it has fallen in value, irrationally, thereby bottomfishing.
Thirdly, if we dont like people shorting the shares anymore, we can recall the shares at anytime.
True, short term we will see our asset value go down...but long term wise, i think we made a good deal.
i heard an interview of a very good economist (but sadly dismissed by mainstream media)explaining why the market is behaving this way...
ReplyDeletehis answer is that, it's adjusting back to reality and the reality is that we (ie the global economy) are not as rich as we thought, in fact, much poorer..
all the wealth was an illusion from all the fake money printed out of thin air to feed ponzi-scheme like economic activities..
ppl look ard, they see nice condos, posh complex, shopping malls, luxury cars, etc, and they cant believe we are poor.. but this is exactly why we are poor, these are unproductive assets, and real resources were directed to these unproductive assets..
a severe recession is already here, but it's a much needed adjustment process.. if central bankers do not allow the market to do its job of flushing these activities down the toilet (ie letting banks bankrupt, property prices to fall), the recession will mutate to a depression
Safer to invest when the index is at 1200
ReplyDeleteAnonymous 11:30, what do u think at 900? Worthless..
ReplyDeleteMany cos are becoming penny stocks. Cheap bcoming cheaper by the week.
ReplyDeleteWarren Buffett: I Haven't Seen As Much Economic Fear In My Adult Lifetime - Charlie Rose Interview
http://www.cnbc.com/id/26982338/
I believe it wiser to start averaging down in couple of block, perhaps 4-5, when it hits around 1900?
ReplyDeleteWe can never know where the bottom is. Nobody in this world can unless he's bullshiting.
Vincent,
ReplyDeleteThe last time it went down to 800 was I think in 1990 during the first gulf war. It has not gone down to that level for the last 18 years even during the 97 financial crisis.
I think 1200 is safe to invest and with Singapore just got into recession with the index standing at 2000, it is not safe to enter the market as surely more bad news will come in the next 12 months and the index will drop.
I think the stock market will go down further. Why? Cos my stocks custodised at a local brokerage firm has all been lent out to Covered Short Sellers. Until the day they stop borrowing my stocks, i believe they will be shorting the market to depress prices. You can check out the stocks that are borrowed from me via www.sgdividends.blogspot.com. But first i have to find a scanner!
ReplyDeleteI don't think I'm going to invest in anything in the near future except for ultra safe and principal protected stuff. If I want to take risk, I'll rather start my own business, the returns is much better. Hard work, sure, there's no such thing as overnight success.
ReplyDeleteIt is amused to see people letting their brokers lend out their shares to short-sellers, which is obvisouly works against their own interest.
ReplyDeleteI also think that insurance companies, pension funds and asset management companies break their fiduciary duty to their investors, if they allow their brokers lend out their shares to short-sellers.
Chee Onn
onnzhai.blogspot.com
Hi Chee Onn,
ReplyDeleteActually,regarding people lending out shares to other people, it is not really against their own interest if you are a long term investor. In fact we have more control over the situation.
Firstly, we earn an interest income. (nearly risk free).
Secondly, we know first hand what stocks will be shorted and we can prepare to put money in when we see it has fallen in value, irrationally, thereby bottomfishing.
Thirdly, if we dont like people shorting the shares anymore, we can recall the shares at anytime.
True, short term we will see our asset value go down...but long term wise, i think we made a good deal.