In bull markets shares are expensive and it is hard to find bargains.
In bear markets due to margin calls, panic and fear; good stocks are also sold down to bargain basement levels.
Example: a person could be holding good quality stocks. But he also dabbles in speculative stocks on the sideline. Suddenly, the market crashes & due to over leveraging or margin calls he is forced to sell both bad stocks and good stocks which he intends to keep.
So good stocks can be sold down as a result. In normal times people keep their gold and heirloom. However, due to unforeseen circumstances when bad times hit "even the most precious gold" is pawned for emergency cash.
Ha! this is the time to buy some real 99.9% real gold.
So how should we invest?
In Bull Run Times We MUST SELL OUR RISING STOCKS INTO STRENGTH.
As the Market goes higher and higher we should turn more and more cautious.
We Must Sell and Reduce Our Overvalued Stocks and Increase Our Cash Position.
Just keep a percentage of winning stocks still with Margin of Safety with potential to grow.
So At The Top We Must Only Be 30% to 50% Invested. And if the Market is Mad we should reduce our holdings even further to only 20% to 30% of the quality stocks. Of Course, We Can still find that occasional overlooked bargains. These we may safely buy some.
Now As The Bull Turns Into A Bear Market When All Things Bad And Good Are Thrown Out Together As A Whole in a time of great confusion we must search for those mispriced bargains. And there are many for the pickings.
At the very Bottom of the Market when people say
"Die lah"
"All is finished".
"Market is totally Doomed & Hopeless!"
YES! AT THE VERY DEPTH OF DEEP DESPAIR & MAXIMUM PESSIMISM WE MUST STEEL OURSELVES AND BUY MORE. LOAD UP MORE AND MORE BARGAIN STOCKS AND BE FULLY INVESTED AT MARKET BOTTOM!
It's like this - In the deepest depth of winter THINK of coming Summer.
And in the Hottest Summer prepares ahead for a Coming Winter.
Haha, just wanted to pump in some positive to stocks investment. Stock investment entry level may just too low make it very unprofessional sort of investment. Not like property normally at least you need to hold for years before gain few hundreds k or millions from your investment. Patience is the key
property investment good in use of leveraging to magnificent your capital and may earn more than stocks.
Haha, then in the end you will find it earn less than what you hold for yrs. No bluff, but maybe your mood song lar, can up down up every day, something for you to do pass your leisure time lol
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
calvintaneng
54,052 posts
Posted by calvintaneng > 2016-01-18 22:41 | Report Abuse
I love bear markets.
In bull markets shares are expensive and it is hard to find bargains.
In bear markets due to margin calls, panic and fear; good stocks are also sold down to bargain basement levels.
Example: a person could be holding good quality stocks. But he also dabbles in speculative stocks on the sideline. Suddenly, the market crashes & due to over leveraging or margin calls he is forced to sell both bad stocks and good stocks which he intends to keep.
So good stocks can be sold down as a result. In normal times people keep their gold and heirloom. However, due to unforeseen circumstances when bad times hit "even the most precious gold" is pawned for emergency cash.
Ha! this is the time to buy some real 99.9% real gold.
So how should we invest?
In Bull Run Times We MUST SELL OUR RISING STOCKS INTO STRENGTH.
As the Market goes higher and higher we should turn more and more cautious.
We Must Sell and Reduce Our Overvalued Stocks and Increase Our Cash Position.
Just keep a percentage of winning stocks still with Margin of Safety with potential to grow.
So At The Top We Must Only Be 30% to 50% Invested. And if the Market is Mad we should reduce our holdings even further to only 20% to 30% of the quality stocks. Of Course, We Can still find that occasional overlooked bargains. These we may safely buy some.
Now As The Bull Turns Into A Bear Market When All Things Bad And Good Are Thrown Out Together As A Whole in a time of great confusion we must search for those mispriced bargains. And there are many for the pickings.
At the very Bottom of the Market when people say
"Die lah"
"All is finished".
"Market is totally Doomed & Hopeless!"
YES! AT THE VERY DEPTH OF DEEP DESPAIR & MAXIMUM PESSIMISM WE MUST STEEL OURSELVES AND BUY MORE. LOAD UP MORE AND MORE BARGAIN STOCKS AND BE FULLY INVESTED AT MARKET BOTTOM!
It's like this - In the deepest depth of winter THINK of coming Summer.
And in the Hottest Summer prepares ahead for a Coming Winter.