Sell NOW

Yet another Dramatic Day.

First, the Australian Market rebounded by 5.6%, after the Prime Minister appearing on national TV the night before, assuring ALL bank deposits will be guaranteed for 3 years. (For a moment , I thought we were in WWII!)

Then, HK had a Massive Rise of over 10%!

Followed by the European major markets rose by over 5% after Rescue Packages announced by the UK, Germany, Spain, Swiss..... and 3 European Banks' strong stance.

(And days before the G7, G20 etc. Joint Declarations to use whatever means to protect the financial system)

But, all these does not change one thing,

The CRASH is coming.

What have been done by all these Governments & Central Banks only trying to achieve one thing,

Buy More Time - hoping the Crisis will go away.

The Crisis will NOT go away.

And they could only buy a week time - the most.

Of course, there will be Rebounds. Strong Rebounds.

But, let's do Not forget some Facts,

In US, more people are having their telephone/Internet disconnected(AT & T CEO stated it this Jan) and now many are cutting back on electricity - using candles at home;

In US, more and more businesses are closing down as they could not get loan/cheaper loan to just carry on day-to-day operations;

In US, about 1 million home being re-possessed every month and there are a total of about 17 million homes currently unoccupied (= 3 times of ALL homes in Australia);

Then, look at the following Possible scenarios,

Funds have to face Massive Redemption as investors lose faith?

It is now retail shares, car manufacturer shares etc. being dumped at - how much more money does any government have left to buy these shares like they did for banking shares?

Pre-programmed Computer Sale Orders triggered off the CRASH?

An assassination of President Hopeful, Obama?

The Only Strategy for those having Cash - WAIT.
Do NOT rush to buy - just look at the price of Morgan Stanley.
The Chinese State Investment bought at US$50 last Dec thought they got a Bargain.
The Japanese Giant Bank bought at US$30 in this Sept thought they got a Bargain.
But, Morgan Stanley dropped to less than US$10 last Friday!

Same to Goldman Sach.
After Warren Buffett had bought it, its price dropped by another (over) 35% last week.

We saw the most volatile week in Wall ST 112-year history AND the week suffering the Most Loss last week. In theory, 20% drop within a year means the market has entered "Bear" - it happened WITHIN ONE WEEK , most if not all major markets dropped more than 20% last week!

The Only Tragedy for those having 30% Loss - Cut Loss.
Sell everytime when there is a Rebound.
Let's do the maths here.
Assuming you bought the share at $100, now only at $70 = a loss of 30%.
Sell now, keep $70.
The share in my view is to drop by at least 50%, that is, $35.
Now, use your $70 to buy back the same share.
Instead of having 1 share, you now have 2 shares.

Remember, investing is NOT necessary about,

"How Much you have spent in buying the shares"

But, could be more about,

"How MANY shares one owns at the end of the day."
(i.e. MORE shares with the SAME amount of money)

Cheers
Fate
Change your Thinking = Change Your Fate