some food for thought

The reality on the ground. My friend works in a electronics corporation which has a subsidary company in China. According to him, that company in China retrenched 300 workers at the end of 2008. In February 2009, they employed 500 new workers because of new orders. Now, all the orders have already been met and this company is now in a unenviable position. Whether to keep or retrench these new workers since no new orders are coming.

At the time of the Tech bubble, the housing market was on the uptrend. Greenspan cut short-term rates from 6.5% to 1.75% within a year.The negative wealth effect coming from the bursting of the IT bubble in the stock market was largely offset by the positive wealth effect coming from the housing market. Since nothing responds more to interest rate cuts than in the housing market, Greenspan's strategy was indeed brilliant.

Unfortunately, he became overconfident n failed to burst the housing bubble before it was too late. With an important sector already hit, what else could offset the negative wealth effects?

The real recovery will probably come when the housing market recovers. Every nation will be now trying to export its way out of the recession. Since one nation's surplus is another nation's deficit, we will have to export to planet Venus.

Krugman indicated a few ways that could lead to a real recovery. The emergence of a major technological innovation that match the IT revolution of the 1990s. Government moves on climate change.

I think they should make laws to ban petrol cars in 5 years time. If this happens, corporations will scramble to built new cars powered by other means. It means that corporations will make big investments to achieve this such as building new plants, employing the best brains ......

This post has been edited by Oracles99: May 29 2009, 10:32 PM

[quote=omores,Jun 4 2009, 08:35 PM]
The wonderful thing abt long term holding.
I'll list down the all stocks which I've bot and sold previously as a lesson to all short term traders. As you know, I was up 30% on my holdings when my strategy was to play long term. But then I got goaded to short term gains, seeing how LYN people can make 20% in 2 days from this and that stock. I stupidly changed my strategy to follow in early May. In the end I lost money in May.


It can go either way. I bought 17 lots of Maxis during the Iraq War at an average price of RM4.83. I sold all at RM6-90. If I had held it till the day it went private, I would have made a lot.

I bought 10 lots of Unisem shares during the tech bubble at RM6.35, Sold at RM9-60. If I had held it until now, I would have regreted.

Actually, there is nothing to regret. If you want to make good money you will have to stake all your money in one cycle. Today Lady Luck may be on your side. Tomorrow she may not be on your side.

This is my experience. To date I have not lost any money.

This post has been edited by Oracles99: Jun 4 2009, 11:54 PM