Euro crisis, Korean War and China's interest hike

[arthur]

If you are thinking I would be writing how I think the market would behave forward in next few months, you are going to be disappointed.
This post is on my observation around me and on myself in times of uncertainity.

Warren Buffett once said: A rising tide lifts all boats.
Conversely a low tide would expose those boats which are inadequately prepared.

In times of uncertainity, I realise lesser investment threads came out in alot of forums. No more buy this REITs or that SIA bonds!
Its actually interesting to see these phenomenas happening repeatedly.
However, its also kinda sad to know newbies' $$ are being taken away from them to experienced investors or short sellers.

One thing I observe myself is that at times like this, I would almost always take out Ben Graham's Security Analysis and relook Chp 8 and Chp 20 (2003 ver. Intelligent Investor).

Perhaps this is akin to reading the Sutra for encouragement where dark moments in life appeared.

Any interesting things to add?

[brattzz]

i can only say, accumulate cash, wait for right time to BUY BUY BUY!!

[Musicwhiz]

Warren Buffett once said: A rising tide lifts all boats.
Conversely a low tide would expose those boats which are inadequately prepared.

Any interesting things to add?

I agree with your points above - a rising tide indeed lifts all boats. This thus makes it much harder to judge what constitutes a good and sound investment versus a speculative one. Nevertheless, the same rigorous research process and filtering criteria should be applied in order to ensure one's downside is protected and that a margin of safety is present.

Uncertainty is, frankly, the friend of the rational buyer of shares in sound companies (yeah I know this sounds cliched!). When prices are marked down by Mr. Market because of undue pessimism, this offers the best opportunity to increase our stake for the long-term.

[lonewolf]

I was having dinner with a fren who worked in the foreign bank and it interesting to get a different prospective of the issues we will be gripping with in the coming months (into 2011).

We both agree that the Korea situation is uncertain but that if a war does break out, it will certainly put a damper on the recovery.

He viewed the Euro crisis as a more problematic issue because of the major banks' exposure to the Euro govt bond. So a default may triggered another Lehman-like financial crisis.

I viewed the rapid devaluation of the US currency as more problematic as the potential towards protectionism and currency instability is going to affect the way world commerce operates.

Who is right?? Only time will tell and I agree with brattzz that this is the time to accumulate cash.

[Musicwhiz]

I guess the effects of such politics and economics are very tough to predict - even economists get it wrong most of the time! Let's just see how things pan out.

The important thing is to be ALWAYS accumulating cash (through savings, rental, dividends etc) so that one builds up buffer for emergencies and opportunities. I think this is important regardless of the state of the economy or level of the stock market indices.

[SLC81]

GOLD should be an option that we should not disregard, you can buy Gold ITF with cash or 10% of CPF allowed for gold investment. It is not a secret that FED has been printing out lot of money and i think China won't sit there and do nothing and it is matter of time for the rest of the world to follow

[Musicwhiz]

GOLD should be an option that we should not disregard, you can buy Gold ITF with cash or 10% of CPF allowed for gold investment. It is not a secret that FED has been printing out lot of money and i think China won't sit there and do nothing and it is matter of time for the rest of the world to follow

I hold the view that hold is over-hyped, and since it does not generate cash flows, it would not qualify as an investment in my eyes.

Then again, to each his own, just giving my views.