Tuesday, January 22, 2008

Market Meltdown: I can smell the fear from here

An irrational smell is permeating global sharemarkets at present and it is the bitter smell of fear.

http://z.about.com/d/beginnersinvest/1/0/A/G/buffett1.jpg
The "Sage of Omaha" Warren Buffett, is a popular
Google search in times of volatile markets, from people
seeking his advice.



Hits today(like they always do on days like these)on the Share Investor Blog are at an all time record and they are mostly from America and they are googling such things like "what would Warren Buffett do?" and lots of related Buffett searches, "market crash", "market meltdown" and "market volatility".

People are seeking reassurance as to what they should do with their stock holdings.

As much as I like to get new readers I'm a bit concerned that this frenzy is gaining a momentum that the current state of global economic growth doesn't deserve.

Now I'm not the right individual to ask when the "bottom" is going to be reached, because I simply don't know but what I do know is people are selling irrationally and they are going to regret it months and years from now.

Allot of the current sell offs are being triggered by margin calls and by traders shorting stocks, that is, betting that share prices will fall, and it has had a momentous snowball effect so far and will probably continue until the buyers come out of the woodwork for some bargain stocks.

Few of the New Zealand companies beaten down so far are in danger of serious real business difficulties and so too global companies, so the disconnect between reality, and the psychological schizophrenia that mums and dads are facing by selling their company holdings at a serious discount is a big one, and only getting bigger as stocks tumble like dominoes.

Don't take this as an endorsement to go out and start buying but I have $NZ50000.00 ready to spend on top ups to my portfolio and I'm feeling like my wife when she goes to the Thanksgiving day dress sales in Dallas Texas, very excited!

So lock up the razor blades, tip the sleeping pills down the drain and use that rope to tie up the bear outside, 'cause its goin' to get turbulent.


Related Share Investor reading

Warren Buffett's The Intelligent Investor
Global Market's dropping and your portfolio
Global Market Meltdown: What is Warren Buffett doing?
A sensible approach to global market volatility

Shareinvestorforum.com - Discuss this topic


Related Amazon reading

The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy (Vintage)

The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy (Vintage) by George Cooper
Buy new: $10.36 / Used from: $7.46
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c Share Investor 2008