Abaci's Common Sense Investing

Only 2 days ago I said the market had not reached the stage where one could 'buy all he wanted and all he could', well after today I'd say we're really close, if not there yet.

The recent fall is liquidity driven, or is it? All the central banks have pledged to provide as much capital as it could but the markets are still falling. Is it the sub-prime mortgage problem? But the U.S. market, which is supposedly to be most affected, has fallen by a much lesser extent than other markets. Have the fundamentals changed? It might if the markets continue to behave this way for a while, but right now at this part of the world China is still going too strong and stocks are still good hedge against inflation (caused by excess money supply).

So what's the real cause for the fall? No one quite knows and that's scary, and scare causes panic, and panic costs money.

If one can assure himself that this is a confidence issue, that he should have no problem convincing himself buying into this dip, because emotion is like weather and can change in no time; on the other hand we have failed to accurately predict the weather for as long as human history went back. So if you must fish at the absolute bottom then now is a good time to test your skills.

To me, many stocks at today's level have already provided enough safety for investment purpose. If you are not forced to sell because of margin calls, then you should have no problem weathering the storm and come up ahead.