actually i was thinking about it. Does anyone think there are
signs of a market bottom? Why do I think so?
1) the VIX index is at 40 plus (dunno exact figure) but
historically anything above 30 is a sign of a market bottom.
2) Warren Buffet thinks its time to invest in equities again.
Goldman Sachs and GE. But granted, he's investing in preferred
stock giving him a 10% dividend.
3) this $700B rescue plan/ bailout package, whatever u call it,
would inject liquidity into the US financial system and create a
secondary market for these mortgage backed securities (although it
hasnt been passed im assuming it has).
frankly i dont think our stock market has bottom. because the
financial crisis if not in the early stages are definintely not the
final stages.
1.the crisis has already spread from USA to europe as more
european govt are bailing out their own mortage company and
banks.
2. it has started to spread to china. when one of its biggest
insurance " ping An" made a staggering 2.3billions USD lost on its
investment in trouble investment bank fortis.
3. the 700billion bailout might not work, as banks might not
want to sell it toxic mortages to the US treasury if they are going
to lost billions of dollars. what is the true value of these
assets? it may take more time to nego, discussion before these
liquidity can be felt by the normal consumers.
4. Even if the banking crisis is over in half to 1 year time,
next come the problems of global recession. As you can see company
such as GE, Intel, Dell has already miss sales forecast and
predicted a slowdown demand. lot of singapore company that depends
on HDD business, precison engineering business, OEM, ODM business
will be badly hit. not to mention sectors that already in slowdown
are property, banking will definitely report lower profits compare
q to q.
