Market Bottom - Where is it?

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  1. #11

    Painful though it may be, probably the best course of action is to accept reality and take your losses. Otherwise, how much more can you afford to lose? And how long can you sit this bear market through? If you still don’t believe we’re in the grip of a devastating bear market with more to come, you’re probably going to be in bad shape very soon.

    The single biggest reason why people lose in the markets is because they don’t like cutting losses. It’s a psychological thing…you feel as if there is still hope as long as you hang on in there. As the market goes deeper and deeper against them, people freeze like deer in the headlamp and turn to hope and prayer for the market to turn. Before you know it, you’re pretty much wiped out.

    For sure, the markets will rebound strongly now and again, but the trend will probably very much be down, down, down from now on. Every now and again, people will latch desperately on to any signs of recovery and declare the market “cheap”, causing fantastic run ups. But the bigger picture is: we’re in the midst of the biggest de-leveraging of the biggest (by far) historical credit bubble ever, and it will probably take god knows how many years to unwind.

    This is not just a financial community problem. The credit crunch will spread very soon to affect most people directly as mass sentiment turns negative to hit spending, put businesses out of business, people out of employment and so on. We will spiral into depression and hyperinflation, and eventually, history will record this moment as the start of the biggest financial and economic downturn ever. So yes, I do think there is more to come and that it will run for years and years. So not the best time to buy. You can either believe it now and do something about it, or believe it when you get wiped out, when there is no need to do anything about it.


  2. #12

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    Quote Originally Posted by HK_Newbie100:
    For sure, the markets will rebound strongly now and again, but the trend will probably very much be down, down, down from now on.
    400 years of history says that you're wrong and that in the long run (defined in decades not months) there is no better investment. I prefer to believe the lessons of history than some anonymous foreteller of doom on the internet. The major developing markets are still 40-60% up on a year ago, and the developed markets are less than 15% down.

  3. #13

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    All is lost, All is Lost

    My typical view is people who spread panic should be shot..


    No question, the correction is definitely taking place. But why is it such a surprise that Asian markets are now falling??? They've been inflated for years. Just because you get used to shit IPOs climbing 500% in the first day, does not make it right. The US economy is certainly headed for a slowdown, and the credit situation still needs to be addressed. However, to say that doom and gloom of the next Great Depression is upon us is a bit early.


  4. #14

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    Indeed. If anyone does their financial planning based on a long term real rate of return on investment of more than 6-8% then they need to take some better advice. And if they do, and invest accordingly, then they won't be worried just yet.


  5. #15

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    Climber
    I always worry when you have time to post on here in the day.

    Are you working the night shift on the firms suicide watch?


  6. #16

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    Quote Originally Posted by Boris:
    Climber
    I always worry when you have time to post on here in the day.

    Are you working the night shift on the firms suicide watch?
    Sadly....you don't know how right you are.....

    Doomsday cometh tomorrow!

  7. #17

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    Forgive this stupid question : Is there any chance that this might affect the HK real-estate market? IE bring rents down?


  8. #18

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    Quote Originally Posted by ontheroad:
    Forgive this stupid question : Is there any chance that this might affect the HK real-estate market? IE bring rents down?
    That's not a stupid question. I would say that at least in the short term, the HK real estate prices are probably not going down. The reasons:

    1. Still relative optimism on Asia's economic growth
    2. Price Stickiness (an economics concept saying that prices come up faster and then resist coming down).
    3. Related to the above....not wanting to sell for a loss.
    4. Recent memory in minds of developers and owners of market recovery post SARS.

    So I would argue for the prices to really begin falling, the economic slowdown would have to have enough impact to affect the daily lives of consumers and possibly combined with another event like a massive Pandemic outbreak.


    So having said that....Avian Influenza Options anyone? The premiums are still affordable....let me know if you're interested

  9. #19

    Stock markets have proved good investments over the ultra long term for sure, yes…but if you’re caught up in a peak of a major downturn, it may take many years for the markets to recover. It’s not a place you want to be. Good luck if you want to sit it out. But why idly watch your investments go down and down when you can do something about it? You have the choice to cut your losses and jump onto something better. Indeed, if you join the small crowd on the other side of the trade, you can be one of the few who profits massively from any downturn.

    It must be said, things are not looking good right now. The downturn of the past few days was caused by traders marking down Bush’s $150 billion rescue package as being too little, too late. This despite the fact that countless billions have already been poured into the markets since last year. So you can see that even world wide govt intervention is not working. They will have to inject money of a magnitude unparalleled if there’s any hope of stabilising the markets…there is little else to do otherwise. And where does printing money of this order lead to?... eventually runaway inflation into hyperinflation, which is where we’re heading in years to come. All you have to do is look at the price of your groceries to realise that inflation is skyrocketing.

    It’s turned out that talk of a stock market crash wasn’t so far off the mark after all. It was coming because of the sequence of events that pointed to its coming. The logical sequence of events from here is govt intervention, soothing words, false hope, mini run-ups, big falls, more govt intervention…and so on. History tells us that the de-leveraging of credit booms run their course. This being the biggest credit boom in history will probably result in the biggest de-leveraging in history. That’s a reality, not random doom saying.

    Anway, just a humble opinion. I sincerely hope peoples’ investments do well from here. I’m just expressing my own fearfulness.


  10. #20

    As to property, there’s little evidence to suggest that it will be immune to any downturn. Why would it be? It’s just another money game played with different chips. When US and European demand for Asian exports dry up to a trickle, Asia will be hit badly too. Domestic markets are still too small in Asia to be self sustaining. Property, a major bubble of its own, will be dumped just like the stocks of today. What option is there when people lose jobs, lose money from the stock market (and you know how big stock investment is in HK) and so on. Just like the financial institutions, people will need to raise cash for all sorts of reasons.

    If you’re renting right now, that will probably be one area of good news as rents fall in sympathy with the housing market due to the glut of properties on the market.


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