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Spore Technical Recession!!!!!!

Ticklish8

By Ticklish8,
in Lite & EZ

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Jacf

Jacf

Neutral Newbie

all i can say is that the year of 2008 is very full of tragedies and troubles! with the Sichuan Earthquake, China's milk scandal, and now this Global financial crisis.. hopefully all will turn out fine in 2009!

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Ticklish8

Ticklish8

3rd Gear
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(edited)

http://elfinchilde.blogspot.com/

 

Interesting read....

 

market capitulation

 

I was asked about this phenomenon by a student of mine. Thought it would be good to share it with all.

 

The link to the formal article, as given by investopedia, is attached here: www.investopedia.com/ask/answers/189.asp

 

In brief:

 

Market capitulation is a phenomenon seen in unusually bearish conditions: it is when investors stampede for the exit, taking any price they can get.

 

What we call the tipping point of mass hysteria.

 

Technically, you can identify it: a series of long, filled marubozus, followed by a sudden death day, when everything goes down on increased volume. That's known as terminal volume.

 

Another psychological point to watch for: all large media outfits should be bearish. Because as long as even one whispers of 'market capitulation', or that 'there is some hope', it means that people are still bullish, still hopeful. And the media, with its large outreach, is capable of influencing a lot with a few words. Remember in March of this year, when they all came out declaring, "The worst is over"???

 

A market capitulates when everyone rushes for the exit, throwing all technicals and fundamentals out of the window because "they don't work" (perception, or reality?).

 

The interesting thing is what comes after:

 

Because when markets have capitulated, it means all--or almost all--investors have succumbed to panic and sold. When all sellers are gone, who's left, but buyers?

 

Humans are emotional beasts. Mark Twain once remarked, that "We do no end of feeling, and mistake it for thinking."

 

That is why there is no such thing as a perfect trader. Because the best traders are rational, and humans are seldom rational. As Plato once said, "Rationality is the highest form of the soul."

 

In the immortal words of Benjamin Graham, "The market is a pendulum that swings forever between unsustainable optimism and unjustified pessimism."

 

Now, rationally, which point are we closer to?

 

edit: Another interesting factoid: keep in mind, that in this period of time, when everyone is rushing for the exit, who is buying now? Warren Buffett.

Edited by Ticklish8
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Roborovskii

Roborovskii

4th Gear

Maybe the best traders are people with high-performing autism? No disrespect intended, but i guess these are the people who might have less capacity to 'react' emotionally and would probably stick to the fundamentals. [:p]

 

That aside, I think its time for me to learn to be a vegetarian [smallcry]

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Scenic98

Scenic98

Clutched

this must be the darkest days for the modern world. i think most of us here were not around during the great depression of the 30s (even my dad wasn't around then). No one knows what's happening. Everyone is suddenly behaving very irrationally, to a certain extend, even my credit manager behaves weird. No one believes anyone anymore; LCs looks like waste paper, credit agency words are not trusted. Countries are failing. Really really amazing how the world can be in such a mess....tks really to US,Bush and Greenspan and also tks in part the Europeans who also got sucked into being suckers.

 

Closer home, Korea may be the next victim. their Won is being whacked. Watch closely Thailand and Indonesia. This mess will really take much longer than the last Asian crisis.

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Pisces69

Pisces69

6th Gear
and I thot Mr Tharman reassures Singaporeans earlier this yr that Singapore won't be affected? [lipsrsealed]

=================

 

That goes to show u cant believe everything they tell u. [rolleyes]

 

I tot they always say SG economy very strong & robust. How come SG is 1st Asian country to go into a recession? [confused]

 

Who knows next time the flow of motorbikes at the c'way & 2nd link is reversed as more Sporeans go to JB to work. [sweatdrop][sweatdrop][sweatdrop]

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Curahee

Curahee

1st Gear

But the 1998 crisis, i believe most ppl already learn their lesson already, why now so many burn fingers in stock again? I nv buy stock before and i am still a student when i'm in 1998 crisis hence i dunno how it work, dun flame me. Juz my personal view.

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Roborovskii

Roborovskii

4th Gear

It's not just about people playing stocks. [:/]

 

It's a mindset of:

 

- I will graduate and find a 5k job and buy a porsche

- I will take a 800k loan to buy a condo and have no problem paying it off

- I will apply for more credit cards cos I am able to

- I wanna enjoy and live the high-life

- It's Sunday everyday

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