Oct 25, 2008


The diagram illustrates the performance of the Straits Times Index over the past 5 years. The spectacular dive over the past 5 months takes us back to the levels last seen about 5 years ago.

The same things are happening to just about every stock market in the world. So much for diversification, LOL.

At some point in time, equities must become cheap enough to constitute a very good buy. As usual, the million-dollar question is - when?

Methinks, not any time so soon. I'm going to sit on my cash and come out to look around again - next year.


John Lee said...

Totally agree, the market is just reacting to the financial turmoil. Wait till all the bad earning figures come out from all the big corporations come out later. Many mega-big corporations are in trouble.

Josee said...

The credit card crisis will be the next wave coming...

Lucky Tan said...

I may be wrong ...but I have reasons to believe that there was a near-term bottom formed on Friday 24.10.2008.

The analysis is in my blog : singaporemind.blogspot.com

My belief is the last 1 week of selling is due purely to redemptions and institutions needing to raise cash. Fundamentals have been put aside and they were selling everything and anything regardless of price.

The Dow futures & S&P Futures were at breaking point on Friday.

Longer term, you could be right given this is turning out to be one of the worse recessions in the past 50 years....and stocks might eventually go lower after bounce.

Jon said...

We've gone from
- there is no recession
- there may be a recession
- there is only a technical recession

The world economies had boomed because of the multiplier-effect of leverage. That multiplier-effect is now in reverse gear.

There is no precedence for what is happening currently. Those who survive well will be those who base judgment on knowledge vs. relying solely on history.

These are exciting times indeed.

John Lee said...

Dear Jon, my friends in the US knew long ago that something big is coming. Just that it is only just given the proper coverage here.

moomooman said...

I remember stocks that form the STI were changed couple of years back.

If we were to use those same stocks, we should be back to late 1990s.

Some of the blue chips is back to 1997 levels.

Gilbert Koh aka Mr Wang said...

This is gonna be a very bad one, I think.

Maybe the property market will even crash soon, heheh.

nhyone said...

Hang Seng not doing so well today. Better stay on the sidelines...