With every passing week, investors are feeling increasingly encouraged that no new disaster bad news worth worrying them again. The stock market has started to recover this week after Investors are throwing caution to the wind.
I realized that increasingly high number of people searching for high yield defensive stock aka blue chip when the search engine keyword ‘dividend’ hit a new high. I believe these are long term passive investors who intend to bottom fish.
While bottom fishing is thrilling and exciting, bargaining at a valuation even lower then what market guru WB get is even more self-fulfilling, but I still believe Cash Is King at this moment.
The Federal Reserve's 50 basis point interest cut is a clear sign the American economy is in danger of crashing. The measures to counter the financial crisis may or may not work. The risk of down side is still very huge with a pending full recession in 2009.
What’s more? I realized that a lot of people still very cash rich and eager to have a bit of the ‘bargain’ now. This puzzle me as there should be cash strapped, out of job, negative asset, bad credit card loan, default mortgage, pay cut etc in a recession. Apparently the full blow of US sub-prime tsunami has not hit Singapore shoreline yet.
I am not aware of what is the story in today's Edge, however, it is good to highlight the risk for investing in emerging markets when the 'perceived value bargain' flooded the market.
Patient get pay. Bottom fishing, may end up with a snake!
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