Review of predictions in 2007

In the Shou Gua of the Zhouyi, the ancients taught us to look at the past to predict the future (October 18 entry).

By using the Yi charts, gleaning from past events, and Yi prognostications, one can predict how stock markets will perform with certain accuracy. Perhaps readers may think that my prediction on the global stock markets plunge in early January 2008 was pure coincidence? Before the expected onslaught, one mentioned it will look particularly horrible.

Probably they also think the same of my earlier 'notable' predictions in 2007:

The KLSE Bull Run in 2007 ( February 11);

The expected plunge in late February/early March (February 24 /March 2);

China stock markets will continue to rise notwithstanding the May warnings of the ‘bubble bursting’ by world renowned personalities – Alan Greenspan, Li Ka Shing and Lee Shau Kee (May 27);

To prepare for the worst case scenario in August (July/August);

Natural disasters, chaos and unemployment in September (September);

‘Cash is king’ from September onwards (September 16);

Not to stand in the middle of the mountain in October coupled with a warning not to invest in the Chinese stock markets including Hong Kong (October 2 and 13);

and in the November 24th entry on 'wishful thinking', my predictions that the Chinese stock markets including Hong Kong will soon enter bear markets, and that the overall loss provisions of CDOs and subprime mortgages predicted by the US Federal Reserve, the OECD, and others may not be prudent enough. (Also read ‘Another sleight of hand’ entry on October 10 about the actions of bankers if interested.)

The review:

Most of the predictions have come true. Of course certain predicted events like the expected enormous write downs of mortgages, CDOs and SIVs, and the possible collapse of banks will take time to unfold.

The KLSE indeed had a bull run in 2007, although not a super bull as predicted because of the fizzling out of investors’ confidence by August.

The plunge in late February/ early March cost KLSE traders dearly. Quite a number lost the money they made in 2006 and the very unlucky or the greedy lost their capital too.

China stock markets rose by almost another hundred percent after the May warnings proffered by the prominent personalities.

The August global stock market plunge was caused by Bear Stearns blaming the worst credit crunch ever faced for their hedge funds failure instead of trying to pacify investors at their conference. In the 2007 annual hexagram given by the Yi, during the year a wanderer would come to steal my cow. Bear Stearns turned out to be the main culprit.

The Yi gave an omen through Hexagram 3 Tun which depicted ‘Chaos and Unemployment’ coupled with a prior warning of natural disasters in September. Indonesia and several countries were affected by earthquakes and typhoons. China, Vietnam and the northeastern states of peninsular Malaysia suffered heavy flooding and damages to housing. With an unchanging hexagram, the timing on the ‘big earthquake’ was definitely out. It proved too difficult for this Yi student to accurately predict its timing.

Those who followed my suggestions to dispose of stocks in September and to keep cash like me may realize they did not have to suffer further stock losses in the last quarter of the year. In times of chaos and unemployment, cash is king.

While the KLSE and Chinese stock markets reached its record highs in October, thereafter they started to drift lower with mini plunges. The mountain had imploded and those standing in the middle of it suffered the consequences by losing loads of their money.

The Shanghai stock market entered into a bear market by mid December after its index went below 4,899 points. Many second and third liners in the KLSE reached its 52 weeks low that month.

The Hong Kong stock market entered into a bear market this week when the Hang Seng Index breached 25,566 points, 20% below its high reached end October 2007. The expected chaos and unemployment is still unfolding in the US and Europe. The loss provisions by global and investment banks, and other financial institutions in the US have already surpassed the US Fed chairman’s prediction of a ballpark figure of $ 100 billion, and counting.

Of course critics or skeptics will still argue that all the predictions which came true were mere coincidences or that I was just lucky. Was it really? Many a Yi aficionado with divination practice may differ with them.

In sharing my insights and experiences with Yi fellows, I suggested on various occasions that there is no necessity to use Yi derivatives to predict the timing of future events and/or omens. Perhaps they can see why since no derivatives were used. Regular readers over the past few years may realized it was not due to luck that most of the Yi related predictions turned out to be correct. However, since I am not a ShenXian and unlike 2006, cannot make the general public rich, last year’s predictions can at times help to minimize your losses and help investors preserve capital to enable them to fight for another day. All this to me is Fellowship with Men – the resultant hexagram of Innocence, my annual hexagram for 2007.

Therefore knowing 'one or two' about the Yi can result in something like this.