Yesterday, DOW plunged 998 points in a matter of half an hour. What a fear? Market is telling us that problems in Greece, Spain, Portugal and Ireland will cause the global economy to collapse within weeks or even days. The whole world will once again enter into a recession worse than the 2008 global financial crisis. Do you believe this? I don't. Why? This is because these countries are not big enough in terms of the economic impact. Nevertheless, market is always irrational and nobody can control the market that builds its fear from thousands and thousands of investors.
At this moment, VIX is shooting up really fast. As noted in my posting one month ago, there was too much complacency in the market then. Now, there is too much fear. No matter what happens, we should always stay rational. Always remember what Warren Buffet says - Be greedy when the market is fearful and be fearful when the market is greedy.
Now, the market is entering into a panic mode. Soon, we can do some serious fishing.
No comments:
Post a Comment