The GloomOur newsroom was abuzz with news of the meltdown in the global stock markets last week. The ticker team had its hands full updating stock market movement across continents and time zones.
The massive slide on the Dow Jones Industrial Average on the NYSE sending Asian and European markets into record intra-day lows.
No one is immune...except for stocks in insulated Iran ( that is another story).
The domino is triggered by fear...fear of the US economy slipping into a recession, taking the world economy with it.
This fear sees no reason. Even a synchronized substantial cut in key interest rates by major central banks fails to sooth frayed nerves.
No amount of assuring noises from central bankers, finance ministers and even the US president seems to be working.
No bailout plan is big enough to counter the flight of capital out of the global stock markets.
Enter The Contrarian
So what will help the markets overcome fear ? Like always greed will.
Only greed can make investors see reason.
The instinct in a trader to look for "value" will turn the tide... and soon.
It is alright to say " We still have not hit the bottom"
At some level every stock looks attractive and many of the bellwethers world wide will soon reach that level.
The turn around will start with a few contrarians beginning the cherry pick.
The opportunity would be too big for others in the sidelines to miss. Valuations will make sitting on cash...feel stupid.
Cyclical Markets
And then others will follow ...the domino will be triggered in the opposite direction.
Perhaps from the most attractive markets in emerging Asia to Europe and eventually into the largest economy in the world.
So here is waiting for the market forces to come to play...and the lifting of gloom in the weeks and months ahead.
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