Last Friday, Dow drop another 100 points. I am not Oracle, so not possible to predict the future trend and whether any turn around is inside. But, what I do believe is, we are in another cycle of pessimism. Meaning? It means stock is likely to drift lower further. Sentiment is very powerful in stock market. No matter how great is the stock, when the feel is not right, it would just go together with the general market.
Sentiment aside, the outlook has indeed turned dimmer. They are couple of reasons. Credit crunch (more financial write down?), fallen US dollar, rising inflation (commodity, oil). Maybe so much excess has been built up over the years, and we need a recession to correct all these? Hopefully the China oil price hike would help to trim the demand. Possible for them to curb the speculative oil trading? This is one of the suggestion they quoted, but difficult to implement in this free market. Everybody should cut down consumption, in order to control this.
I shall watch on the sideline, until things are clear. It is impossible to catch the bottom. But I do believe, the more it fall, it is good for long term investor. But, you really need to work hard, to pick the right stock.
Sunday, 29 June 2008
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