I had a chat with a friend recently and we had different approach when come to buy decision. I prefer to buy when it appears to be undervalued and buying as it gets lower. He preferred to ride on momentum - will only buy when the stocks start to move up.
I am no expert in economics and definitely not in any position to predict or forecast the potential impact of trade war between US and the rest of the world.
If stock market is an accurate barometer, it seems that US stocks are on the rise and most other stock markets are falling, so US companies are the winners? When goods sold by other countries are more expensive, US products will become more competitive and able to increase their market share? Consumers will be at the losing end disregard who win the war, and companies exporting to US will be the sure losers and inflation is inevitable? When I read economists/analysts/academician analysis of trade war, all of them sound logical and make sense. All the major events happened also make sense when we analysed them after, not before they took place.
The trade war talks has caused the stock market, especially HK market to correct to a level that looks attractive now.
I dont know when will the crash come and dont know how trade war will turn out to be, if there is anything to learn from the past or from successful investors, the time to find bargain is:-
1. the companies appeared undervalued from financial metrics (on condition they are well managed companies with good products or services )
2. when others are not buying but selling heavily (when market is in fear mode).
How I wish there is a way to find out when is the bottom. Since I do not have that super power, I will always keep some reserve - in case there is panic sales. Even the market looks low now, there is always a chance that it can get much lower.
No comments:
Post a Comment