Market has seen a drop of about 200 points over the past week and a half. Scary I must say, but necessary in the bigger scheme of things. Given that the STI had been in massively overbought territory since the start of the new year, it's almost certain that this correction had been overdue.
Timely corrections are crucial and healthy for the STI as a whole, setting the stage for newer peaks. This time round, investors, affected by the news of tightening control over US banks and putting a cap on the ease of borrowing in the PRC, cashed out, sending prices across the Singapore exchange plunging to November 09 levels. Afterall, it is times like these that people buy on the weak and sell on 'bad' news.
My dad attributed the plunge over the past week to the risk taking habits by contra players, using cash they don't have and selling when the market direction doesn't favor their stand, causing them to lose the cash they don't have in favor of minimizing losses.
Punters..
I've said it before and will say it again..Stock markets favor those with holding power and the ability to see beyond the general perspective. It also favors those with a longer time horizon for investing. Now I understand why Warren Buffet regrets that he started investing too late. One year can make hell lot of difference.
No comments:
Post a Comment