18 Work on what has been spoiled

Two months after selling down many of my shareholdings in the stock market because of the Yi’s prior warning, with Hexagram 18 Ku / Work on what has been spoiled, the inevitable happened. The stock market is facing a mini crisis and backlash because a few top banks (two foreign, one US, the other British) are pulling credit lines because they were hurt by financing a few rogue traders whose shares were way overvalued. When one astute stockbroker first withdrew the credit line, one particular share tumbled like a deck of cards falling 90% in a matter of days with a market value of 1.3 billion wiped off. Even when the share is hovering at 10% of its previous market valuation, only the brave dare rush in to buy. (There are too many uncertainties relating to the company and its owners.)

The question remains that many investors saw the share overvalued, how could the banks (especially the foreign ones) not seen the same then? As usual the authorities came out enforce talking about what could have been done, a bit too little and a bit too late, leaving the small investors and the owners of public listed companies licking their wounds and/or scurrying for financing elsewhere. Many of whom are facing margin calls and forced selling activities by their financiers. (Already 30 to 40 billion in value have been wiped off in May from the stock market capitalization.) These actions have further dampened the share prices and the confidence of both the investing public and foreign fund managers. Until the government authorities come to their senses on how to resolve the current fiasco it appears the stock market will take quite a while to recover.

After the reduction of shareholdings early March, one is keeping still in line with what the Yi advised. Even though some of the shares one sold two months ago have fallen 50% to 70% in value. (Refer to 'Spoiled by the mother' and Hexagram 18 changing to Hexagram 52 Ken / Keeping Still.) Got to save the bullets to fight another day! And allow time for the authorities, the top banks and the stockbrokers to work on what has been spoiled?