Wednesday, October 15, 2008

A Bear or a Lazy Bull!

Think Positive!!!
market investing bull bear recession
Some of my coworkers have been clamoring to get back into the stock market. Call it opportunity, value investing or greed - we are after all human.

Last week - we were in shock and wanted nothing to do with the market and after a 900-point rally - presumably another bull market has arrived or we are close. Very close because it can't possibly get any worse. After a 700-point drop today - think again!

Aaaah - the vagrancies of human emotions. And to some degree the frailty of human memory. We forget the past and take a positive sign to mean more than what it is - just another day in the market. A market, which is driven by mass hysteria, large scale trading by institutions, manipulation and government influence. The infatuation with the market can distract us from the true driver of the market - the economy.

Yes - what matters at the end of the day is the health of the businesses that make up the economy. So how is the US economy, the emerging markets economies and the global economy faring? The picture may not be rosy in the short term but what about the long-term trends? The emergence of the new middle class, the building boom in Asia & the middle-east, the next wave of technological innovation, the thirst for alternative fuels ... The list is long and alive.

The world is moving forward and if you invest judiciously (less emotion - more discipline, don't time the market, stay invested, diversify & have patience) - making money in the long-term looks promising. On the other hand - if you want to time the market and play the rallies (and there are plenty of those) - good luck!

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