Thursday, April 24, 2008

Glimpses of the future

After the recent plunges of the global stock markets since January 2008, it does not take a genius to realize that markets will eventually rebound. The global stock markets having been battered for almost three months have been rebounding for the past few weeks. The only question is can the rebounds be sustained, meaning they are not dead cat’s bounces or bear traps. Any stock investor would like to know the answer in advance to this million dollar question.

It is not terribly important whether I know the answers in advance (read future) or not, what could be more beneficial to regular readers is that they can get some glimpses of the future in entries on the stock markets. Take for example the March 18, 2008 entry suggesting to readers to ‘buy low, sell high’.

Perhaps, it was coincidence that the Kuala Lumpur Composite Index hit the low of 1,166 points on March 18 after the mild rebound from the 10% plunge witnessed on March 10. From March 18 onwards, the KLCI has slowly but surely recovered to 1,296 points – registered at the close of business on Friday, March 7, and recouped the hundred over points lost in the following trading day’s plunge. Low liner stocks had also slowly climbed up from their lows. Some stocks had already recovered more than 50% from their two-year lows, while others still flounder at the bottom.

To boost the confidence of readers cum investors, I had written a subsequent entry to say that I look forward to a tenfold gain in some stocks, this year, and suggested that they can make 50% or more from their investments in the KLSE even in 2008.

Whether you have bought low to sell high or not, it is your luck not mine. Within a month, some investors, including yours truly, who had bought at the lows would have already made their 50% gain on those particular investments this year.

Over the past week or so, a few stock analysts have emerged from the closet, to say that the KLSE has touched bottom, or commented that the downside will be rather limited.

Seeing the upside, more analysts will slowly crawl out from the woodwork to call for buys and confidently give various tips. Thereafter, every analyst would jump onto the bandwagon to clamor for buys. If that happens, investors would have forgotten about the previous pains and losses to panic buy shares. By then, more often than not, they will buy high to sell higher. From experience, that scenario is a given; with history repeating itself.

The history repeat, one is actually looking for contains a much bigger picture. The signs of it happening have slowly emerged and look particularly encouraging. In a way, like others, I am also waiting for leads.

When the big picture finally emerges, one may write about it, and not before, to avoid plagiarism. Do not worry; one would not leave it too late. Otherwise, how can readers on occasions read today’s news in this blog, a week, weeks, or months in advance? See the big picture!

Meanwhile one waits cheerfully.


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