Yesterday, 15 Oct 2008, 3.30pm, I dropped by investment bank office. To my surprise, I found out there are "mini crowd" gathered in front of the stock price machines.
Isn't it a market crisis? Credit crunch? Once in 100 years financial tsunami? Why there are still a decent number of retail investors (or rather speculator??) show interest in stock market? isn't it the crowd've got their hand burnt? This really impact me. It triggered me to have a thought on this scenario. Below is my 2 cents worth findings:
I believe we are in the mid or end of bear 2 phase now. In bear 2, the stock market may fluctuate violently. The crowd in the investent bank' office means that the buying power is not exhaustive yet. The crowd is still confident to bet with hope that the stock will rebound to make some ultra short term money. To me, this mean the stock market most probably will adjust downward within the next half year to settle at a lower level.
When market volatility died off. The confidence of the last buyer vanished. The stock market turnover at its low end compare with the past few years. Speculators no long interested to speculate. There are only few long term investors pick fundamental stocks. Then, we basically enter bear 3 phase or bull 1 phase. This is the best time to greedily buy up the market.
As for now, the worst is yet to come!!
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