Lehman and Merrill Lynch in trouble

The shocking news today is Lehman to file for bankruptcy and Merrill Lynch to be bought over by Bank of America. The wall street fear has became a reality and financial market keep tumbling. It looks like the credit crisis would deepen before it gets any better. Before the light at the end of tunnel is sighted, stock market is going to fall whenever there is bad news. It looks like a knee jerk reaction now. The Asia market is reacting to US market news more violently than US itself.

At this juncture, the market direction is unclear. We are at the unique situation now, which Greenspan said is a serious crisis. As we don't know how worse it could go, holding back any buying decision seems to be the only wise thing to do now. Cheap could become cheaper, remember. There are still things you can do. Brush up your investment skill by reading more books and perform some reflection on your investment decision. This would aid the future adventure.

There are many short sellers out there who short on any bad news that come out from the US. I met an ex Uni friend who does regular trading. He mainly doing shorting now. That could explain the increased volatility we have witnessed. The problem with trading is not a few times of continuous win. It is the challenge of doing it right most of the time. One big bet that goes wrong could bring you back to ground.

I am also taking my time to go through my existing holding to eliminate the weak performer and search for future strong performer. The good part about bear market is you can take your own sweet time to do research and you are buying on cheap, if not, super cheap.