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Exciting times

October 24, 2008

As I type this, the Straits Times Index is about to sink below 1600. KL Composite has dropped to 855. A lot of people are having cold sweat. The downtrend has been steady and continuous so this isn’t your usual weekly market correction thing in action.

I’ve pulled out whatever little money I had in the market years ago so I can breathe easy but the people I deal with have not. Unfortunately we’re all collectively connected like a ship to anchor.

I’ve always had a hunch that we’re entering a new era in more ways than one. Its as if the reset button had been pushed. Financially and socially the winds have changed. These two feed off each other anyway so if one changes, so will the other.

While the people I know have got worried looks on their faces, I on the other hand am quite excited. Its like entering uncharted waters, where the old rules are about to be overwritten. Nobody likes change. I understand that, especially when they’ve got money to lose but I’m not sure if anyone’s gonna be able to outrun this one.

So rather than groaning and grumbling, I tell my friends to hope for the best but expect the worst. Its time for plan B or plan C. Whatever plan it is, just focus on one thing in my opinion. Debt elimination. And certainly not acquiring new debt.

Forget about acquisition for the moment. No borrowing for anything – new car or house. Rent if you must. Stow away that credit card. Cut your losses. Walk away from deals that have no payoff guarantee. Cash is king, so hoard your cash until the storm blows over.

I’ve got ppl asking me to buy cheap assets but they can’t tell me how deep is the well we’re plunging in. What’s cheap based on yesterday’s valuation technique may be insanely overpriced in the new reality so I’ll wait, thank you very much.

I’m not a father but now I understand what it feels like to wait for a baby to arrive. You know its presents a brand new reality. And you just hope it’ll be more joyous than the current one.

6 Comments leave one →
  1. October 25, 2008 12:00 am

    I got hit pretty badly. Was a mistake for not pulling out, guess greed took over me few months ago when my gut feel was telling me to get out. =_= Too late now, and it’s too much of a damage done. I will just have to wait it out while trying to earn some side income.

    I think you’ve learnt a valuable lesson which could be well worth the price. On the positive side, you’ve still got your job and property. That’s more than what some are left with. So chin up, everything that goes down must come up.

  2. October 28, 2008 10:47 am

    Yeap. Trying hard to earn more side income to prepare myself for stock’s sales carnival. πŸ˜€

    Still interested in bargain-hunting eh. That’s the spirit. πŸ™‚

  3. October 29, 2008 10:07 am

    Yea, I’m already too deep into the ground, maybe dig more and I can find gold.

    Ooh, make sure you leave a lifeline so you can find your way up again. πŸ™‚

  4. October 29, 2008 10:18 am

    Nothing new here, not sure what you’re referring to as ‘new era’. The market has up and down cycles every decade or so (the last being in ’97, before that in ’89 it’s about time for another one.)

    It’s always prophesized as ‘this the worst since… end of the world as we know it … blah blah blah’ when we’re in the middle of it, but it’s not – it’s boringly normal. The world isn’t going to end.

    As with all cycles some tycoons will become beggars and some beggars will become tycoons – it’s just who manages to catch the wave.

    Oh, the new era? I had in mind the record US national debt to finally do something it has never done in history – perform a hard-reset on the system that will burst every Wall Street bubble. It’ll be bloody – I’m talking total rewrite of every regulation that had permitted these bubbles to form in the first place, even a re-issuance of currency which will bomb every US-dollar pegged economy out there. The US will become a banana republic. Social unrest could follow. It won’t be the end of the world but definitely the end of business as usual. But…. maybe I’m just dreaming.

  5. October 29, 2008 11:22 am

    Every high stake trading that’s done these seems like gambling. I’ve never been a gambler, so I’ll leave the monkey trading to those risk takers and high-flyers.
    I’ll just keep it simple with both feet on the ground and manage with whatever I’ve got.

    The brokers used to say no pain no gain. For some reason I don’t see them saying that these days. Maybe its changed to all pain no gain? πŸ™‚

  6. tinytapir permalink
    October 29, 2008 2:50 pm

    well, remember how it was said that the ’97 crash would re-wire the way south east asian countries work?

    It didn’t really change the underlying problems much.

    The reality of it, I think, is that most of the way the business world operates isn’t based on sound economics, it’s more like a teetering house of cards, just a question when which card decides to fall.

    With the human population the way it is, we’re all living on borrowed time really. Don’t forget that the standard of living we’re currently used to was unheard of 50 years ago, so perhaps it’s not a ‘new’ era so much as a reversion back to the ‘older’ era.

    Good point. History moves in cycles and so does the economy.

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