Is Recent Crisis Differs From 2008?

I'm so sorry. I supposed to write something on Monday or Tuesday evening. But I was rushing for a tender and I did not sleep for 2 days. I have totally no chance to update this blog for the past 10 days. That's make me think of my financial freedom plan.

So have you find out what is wrong with the market for the past 5 to 6 trading days? I found the article below written by Francesco Guerrera from the Internet and would like to share with you.

There are three fundamental differences between the financial crisis of three years ago and today's events.

Starting from the most obvious: The two crises had completely different origins.

The older one spread from the bottom up. It began among over-optimistic home buyers, rose through the Wall Street securitization machine, with more than a little help from credit-rating firms, and ended up infecting the global economy. It was the financial sector's breakdown that caused the recession.

The current predicament, by contrast, is a top-down affair. Governments around the world, unable to stimulate their economies and get their houses in order, have gradually lost the trust of the business and financial communities.

That, in turn, has caused a sharp reduction in private sector spending and investing, causing a vicious circle that leads to high unemployment and sluggish growth. Markets and banks, in this case, are victims, not perpetrators.

The second difference is perhaps the most important: Financial companies and households had feasted on cheap credit in the run-up to 2007-2008. 

When the bubble burst, the resulting crash diet of deleveraging caused a massive recessionary shock. This time around, the problem is the opposite. The economic doldrums are prompting companies and individuals to stash their cash away and steer clear of debt, resulting in anemic consumption and investment growth.

The final distinction is a direct consequence of the first two. Given its genesis, the 2008 financial catastrophe had a simple, if painful, solution: Governments had to step in to provide liquidity in droves through low interest rates, bank bailouts and injections of cash into the economy.

As Warren Buffett once wrote to his shareholders, "we have usually made our best purchases when apprehensions about some macro event were at a peak".

So have you managed to collect some discounted stocks for the past 5 days? Or you are waiting for a better entry point to enter? Or you are listening those experts not to catch a falling knife? 

Whatever it is, I hope you did not panic and sell of your shares, because perhaps it is just a downgrade of US credit rating, but not another 2008 crisis. 

Anyway, The stock market has been go up for so long, I've awaited for so long for it to come down. On the other hand, I've took profit and sold CEPAT and UCHITEC 10 days ago in order to provide some cash flows for me to do some share swapping. So I decided to take the risk to buy some on past Monday morning.

Since I don't have time to monitor the market, I can only issue a buying price for those counters I think it is cheap for me. Who know, they are all matched within 1 hour. To be honest, I've hit a very bad entry time, where there were a lot more discounts on Monday noon and Tuesday morning. Anyway, what is done, is already done. I can only learn from my mistake.

Everyone can predict the market movement, but not everyone can be correct every time. So we will see our stock market's fate next week. Most of the Q2 result coming out very soon, we will see.

All the best, folks!

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