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Fear in the Market- Time to Wake up Greed

Posted by Lemizeraq Labels: , ,

cliff jumping by benipop at http://www.sxc.hu/profile/benipopRead quite a few posts and visited the library again yesterday. Visiting the library is a good way to save money on buying books and enjoy air conditioned comfort.


The one post that strikes a chord with me is by Mark Mobius "Pessimism too high, time to buy." In it he talks about the pessimism that is pervading markets and that universal pessimism is usually a good indicator that it is time to buy equities.

Why? Because according to him, the equities (stocks and shares) lead the economy to six months to a year.

So what are some indicators here in Singapore that the market is near or at its bottom? On Saturday, the MM Lee said that the recession is likely to last for a few years more. This coming from someone who said that Singapore was entering a "Golden Age" and that Singapore will not be affected by the subprime crisis unfolding in the United States because of the twin economies of China and India. Since he is wrong on both earlier counts, he is likely to be wrong in his latest assessment too.

Also the analysts at brokerages are finally putting quite a few "sell" recommendations in their stock calls.

Another article at The Edge "Searching for Market Bottom" predicts that the bottom is still some way off to around October. And they also said that the financials (ie the banks and financial companies) will lead the way.

My point is that I don't care and don't know when the market will hit bottom, I just know that this is the time to buy equities and accumulate stocks that one day will provide the means for financial freedom.

I rather bet on time in the market (as long as possible) than timing the market and use dollar cost averaging to buy more units of shares or funds as the prices of stocks are low.

What do you think?

Pessimism too high, time to buy: Mark Mobius
Thursday, 12 March 2009

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