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Goodbye to GFC but not to the lessons

Discussion in 'Investing Strategies' started by wdongli, 10th Mar, 2011.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
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    Location:
    Perth
    What did you do and believe before, during, and after the crashing, if we could remember and review regularly, would give us the valuable lessons. The events of the market shows:

    1. DOW didn't crash down to 3,000 as people predicted and accepted by the crowd.

    2. The global financial system didn't collapse onto the ground, and the bailout didn't bankrupt US but nearly beaten Euro down to its knee.

    3. Australia economies shows its best in the GFC and after, but its market still is in the tailwind of the GFC. People just could not accept the fact that Australia could keep to be good and people try to find what wrong. However most of these guys missed the V-shape recovery and they could not see if not another global crash of the financial system, the conservative risk management of Australia government and central bank. The market need the worries to get the energy to break the mental barriers to go forward.

    4. Euro would stand up rather than collapse as people expected.

    5. People in Australia market are hoping and expecting China collapses and Australia market collapses, which is a mental model to copy what happened in US and EU market crash, to somewhere there have not crash in GFC. Do you think it is a right model? It is ridiculous that your house is not on fire but the people price your house much less than the burnt terribly houses, isn't it? Market is a machine to generate the irrational minds always!

    6. Aussie market players are very confused now. Following DOW, they worries China. Following China they worries US and EU. Following the trend of the Global economies, they worries the natural disasters, the minority of the government, and they worries always until they find they could not worry any more since all of the worries are self-annoyed. Before GFC, the Aussie market players cheered for everything for the false-economy-decoupling-from-US at wrong time. Now I do feel they worry too much they should not! Do we know herd effect? Market likes to be crazy at the same time and the same ideas with the fallibility and fallibility always more popular than the truth.

    7. Too many bought too high and hold the overpriced things for the belief of buying and holding forever and then when the price regressed back to the value or lower than value, these buying and holding guys burnt their hard-earned money on the fire. Too many sold at Jan-Feb-Mar 2009, the time no one should sold!

    Have you cried for the sky falling down? Have you predicted worse in the darkest time? What lessons could you get from what happened in the last two years since March 2009? Who is the man to make what happened to you in GFC and after? What's the vital few of the critical thinking for us as the market players? Do you know or have the the vital few in mind? In my point of views, The most important thing, which is vital few to us, is to replay the events from the starting of GFC, get the lessons, and get the mind with the strategic thinking for the future market Valley of Death: using the least force to get the best profit!

    More thought wdongli - Member Blogs
     
    Last edited by a moderator: 10th Mar, 2011