By Pooky, this blog economics journalist
I need to first make a disclosure, and that is I hold no shares in this particular stupid stock market-mainly because I am part of the real sector of the economy, in that all my excess money goes into fashion merchandising.
CLSA, the best stock broker in the world, recently put the prospect of this stupid stock market all on the shoulder of the local retail players. “Avoid it, but if the locals start to buy, it is a great opportunity,”said CLSA. Well since then, the locals have gone completely mad, and went in against all odd and bought like mad, and so this stupid stock market is up by about 60% now.
Well, logically, in a country with few sophisticated local investors who trade mostly on irrationality, the key question to ask is what drive them. Well in the country that this stupid stock market is located, the government is all hell bent on jacking up the stock market, spinning everything into extreme good news. Then there are the medis, most of them are controlled by this hyped up government and play the stock market like it is crack. So in this country, hype is at maximum.
So all it takes is really that little push from the only group of people who have an image of objectivity. Well, get this, this stock market advertise everyday-like many many times a day, that one can benefit in any market condition, up or down-through the stock market and through the futures market.
So the stage is set for volatility, right, that is driven by madness.
Well the bottom line question is so then, what drives these group of people who drive these investors to beyond the edge. The answer obviously is their self interest. In this country, this group of people have little other way of making money other than commission on the buy and sell of stocks. The other is their massive investment, belonging to themselves, n the stock market.
If that is “Not” a recipe for a total lack of objectivity, what is? And so one can pretty much guess the direction of this stupid stock market, by two thing. They are first, how much commission can these folks make the most from the stock market. And second, their investment portfolio.
So you can see why the not so stupid regulators of this stupid stock market, is trying to change the game-by first liberalizing the commission and opening up these folks investment portfolio for the public to see.
So good luck al. Hope you make your millions and come to my fashionable stores to buy some stuff, if you have benefited from this little report. I never will invest in the stock market, however, because being a journalist with Reuters standard, even as a blogger, the best of rules like at Reuters says journalist can not play the stock market.
My bottom-line advice, however, is to always invest on fundamentals, because that is how Warren Buffet became the richest guy on the planet, from starting with nothing-some 40 years ago. And that is all it taks really to be the richest guy in the world. If fundamentals confuses you, Buffet says, “The boring a the story is, the more money I put into it.”
So just time yourself. Grab a bunch of fundamental report and read it. Which ever one put you to sleep first, put your money into it.
Again, all it takes is 40 years and fundamentals-and a lot of sleep.