Thursday, 4 August 2011

Wealth evaporating

When stock markets tumbled on Blue Monday in Janaury 2008 at the news of oncoming recession I stood aside...

When Lehman Brother went bust in September 2008 and stocks nosedived, I kept away from risky assets

When within first six weeks of 2009 stock indices fell by 25% I held my money on bank deposits and was glad to be offered high interest rate.

Even in early February 2010 when a wave of panic wreaked havoc to stockholders I was out of stocks as I had managed to pull out two weeks earlier.

So why the fuck haven't I sold out stocks this f*cking time... Par for the course. I had predicted it, I knew it was bound to happen. Greece is actually bust. Other PIIGS countries are on a brink of insolvency. USA is bankrupt, despite its prime credit rating. Macroecomomic data clearly show world economy is poised at least for a slowdown, if not for a recession. Double-dip recession. It must have happened, so why the hell did I hang back on disposing of risky assets?

No, I'm not complaining because I incurred a loss equal to my monthly salary within two days. I took a chance and this was a part of the game. I'm f*cked up just because tumbling market didn't take me aback and I did nothing to protect my assets. Tough luck...

Now cool down... This is just a panic, stock prices will rebound when greed takes over from fear and then I'll jump out of the market. Let's face the truth, this is how the bear market begins. Macroeconomic data prove the standing of more and more economies, including the Polish one, is getting worse. Also stock markets follow a recurring pattern. Indices peaked a few weeks ago, then stock prices declined slowly and yesterday and today the decline turned into a full-blown waterfall, wailing wall, free fall or whatever. Then comes the correction. When the panic is gone, speculators will begin buying up "cheap" stocks, after an uptick the prices will be going down for months, until we see the trough. There will be a moment, just as two and a half years ago when everyone could only see abyss. This is when the light in the tunnel comes up...

Cheer up... :)

1 comment:

Michael Dembinski said...

And my cash on deposit is still gathering interest... (at a higher rate than inflation - but only just).

Think sustainable. It is the pushy that have fucked up the world economy, not the conserving conservatives.