Hi InSook,
Good post, and now we move to change the device a bit ...
While we were and are on NASDAQ 2200 cruise, we are within sight of cruise ship Nikkei 12000, formerly Nikkei 40000. The events I had described in my earlier post did not happen on NASDAQ 2200 yet, but had on Nikkei 12000. The disease, after its 150 course, has been diagnosed as Ebola.
Now, doctor, we on NASDAQ 2200 do not know if the disease on our ship is the same as that on Nikkei 40000, or something more potent but less lingering, or simply a flu. However we may feel to be "responsible" and close to the ill patients, including ORCL, is it time to put our kids on that last departing launch?
Back to normal language. I suspect that folks hold differing views on the correct course of action because there is no one correct course of action, at the margin.
If one's portfolio is 50 times one's annual average active work income, a full retreat from the equity market may be good advise, as every 10% loss will take a more than 10 years to recover from active income less cost (assuming ones savings rate is 50% of income).
If one's portfolio is 1 times one's annual active income, a retreat from the equity market may not be necessary, as every 10% loss can be offset by a few months of active income derived savings; unless of course one's savings rate is close to 0%.
Simply a matter of upside vs downside, probabilities, recoverability, and preference for risk. For many, the upside is simply not worth the risk, when there are so many other ways of making the same absolute/relative return.
<<Fyi, economy in US is not that bad as you might think>>
I follow the US economy quite closely. The sharpness of turn, rapidity of anticipatory equity/employment plunge, frenzied corrective FED action, and massive complacency all broke historic records. We are only beginning.
I hope you are right and I am wrong, because you and I both will be richer because of it. If you are wrong, I would still be OK. If you are OK if proven wrong, you are allocated and positioned correctly, otherwise, you may be taking on a risk not justified by the possible upside.
Central Bankers are human, and have made lots of exceeeding costly mistakes throughout history. AG may turn out to be the worst of the lot.
<<How is it in HK?>>
HK folks are gamblers, but cushioned by high savings rate, and helped by instinct of running for cover.
Our governor (Chief Executive Office these days) doesn't do much, as he should not. Government should be small, handsoff, and stay out of the way. I suspect most HKers would register as Tories or Republicans given a choice.
<<Amy Tang's books and she thinks that's how Chinese are>>
Not familiar with her work. Trinidadian Chinese are the best, of course, followed by my relatives in US, Canada, Russia, Britain, New Zealand, Taiwan, Singapore, Malaysia, and South Africa.
Chugs, Jay |
