Wednesday July 25, 2007

Welcome to Drop World

Dow Jones drops 200 points, Canadian TSX drops 400 points (!),
S&P500 drops 50 points, Japan Nikkei drops 211 points,
New York NYMEX crude oil drops $2, gold drops $6.

- Welcome to Drop World.

When Biow said she wanted to sign up for a DBS Vickers Online account, just like mine, and wanted to get into the stock market, and wanted to make her money "grow fast", alarm bells went off in my head. I told her once she goes into the market, it will crash. That she is the ultimate contra market indicator. That her entry into the market will cause the entire global stock and asset markets to simultaneously crash, single-handedly wiping out trillions of dollars in equity.

Ok, so maybe I exaggerate. A little.

Well, guess what. Biow managed to buy her first shares sometime yesterday night (mid-afternoon, actually, New York time). Today, she told me that her buy order got filled. She said to me, "beware and be warned!"

I could draw parallels to what is happening in China, and to what happened just prior to the start of the (First) Great Depression, with the October 1929 stock market crash. When newbies start signing up for bokerage accounts and enter the markets in droves, that is when contrarians start to get worried. And I count myself a friend and member of the contrarian community.

Be afraid. Be very afraid. :)

See also :

1. biow the market indicator
2. Chinese investors flood overheated stock market
3. Bank queues in China

(2007-07-25 10:40:47 SGT) [Biz] Permalink

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