Posted by: donmihaihai | November 24, 2007

Apple days

The Wall Street of 1932 was a dismal ghost town. Securities firms declared “apple days” — unpaid vacation days each month that enabled destitute brokers to go out and supplement their income by selling apples on the sidewalk. Apple vendors appeared at the Corner. Downtown real estate was so depressed that building companies defaulted; astute investors who bought their bonds become the future owners of Wall Street. The misery extended everywhere. Riverside Park was lined with Hoovervilles, and sylvan retreats in Central Park looked like ragged hillbilly hollows. On Park Avenue, ten-room apartments that had been occupied by financiers of the twenties now lack tenants. The new, half-occupied Empire State Building was mocked as the “Empty State Building.”

Ron Chernow begins the chapter of “Midget” for “The House of Morgan” by writing Apple days and who is the future owner of Wall Street. It was the beginning of 1930s great depression and not too far back, speculators or thousands of trader and investors have been waiting for an opportunity to buy stocks on just such a break(the 1st crash) as has occurred over the last several weeks. Those that went back after the 1st crash were badly burned and those who sold out in the 1932 were not wise either.

Will there be an Apple days in the future for local dealers? Picturing a time where there are stall and stall of apple with owner wearing shirt and pant and shouting, it is funny. I can smile now but when it happen, no one will be laughing. The nearest to Apple days that I can remember with my short venture in the market is that during 2002/2003 the trading activities was so low that securities firms merged/acquisition, articles and articles on how those dealers are trading among themselves because no one call in to buy stocks. Those who bought stocks back then on let say blue chips become proud owners of some of the big local firm. But how many are buying back then?

Looking out of Singapore during 2002/2003, after badly burned by the burst of technology bubbles, every articles showed that they were looking at DJ, SP and Nasdaq for direction, and these were where most of the investment were made back then on US, tech stock, health care and perhaps Europe. Ok, most made money on these investment, but where were the places to be in? Asia, emerging markets and commodities. Articles in the news were questioning whether we should still invest in STI because STI never progress in 10 yrs or so, which mean those buying STI Index back in early 1990s were not earning money for 10 yrs. How wrong are by looking into rear mirror on the recent past.

What are the recent pasts? Equities of all type and countries and commodities. I won’t be surprise that buying the Indexes at the current level will produce just single digits return for the next 10 yrs and for some crazy markets, the return can be negative. Buying individual stocks is always different as compare to buying funds or Indexes be it doesn’t mean that one cannot get negative return for 3 to 5 yrs, it is always possible despite that some may think defensive and dividend stocks won’t hurt so much.

The market has been declining, some are hurting but many are wondering is it time to go back? Where is the bottom going to be? Have speculators being push out of the market? Will there be a recession soon? So many questions and I don’t have the ans but what is the ans is not that important. What is important is we never notice that mistakes are make because (take from someone) “a man cannot sit quietly on its butt in a room” We want to do something, it is this urge that going to kill us.

Rather than saying market correction, the recent past as diff from the period prior that is becoming more volatile which is good as the chances of finding cheap stock increase as compare to beginning of the year.

As for UT which I do invest in, avoiding all markets which look like having lot of excess and go go fund managers is always a must for me.

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