Thursday, August 16, 2007
Panic Selling - Good Time to Buy ?
The gobal market is selling. First the subprime mortage market, next the greedy hedge funds, now credit market debt and the investment banks ...
As I pointed out in April, credit disaster is modelled by the heat difussion equation. By the nature of the equation, it will spread. I believe, eventually, the credit market can absorb defaults as a business cost.
The correction can be a good time to buy so long as the the disaster does not affect the growth. But, when will be the bottom? The safe way would be - buy after the market confirm a retest of the recent low.
In this disaster, some hedge funds ran into trouble. A number of hedge funds were "surprised" to know that they had sub prime exposure in their investments. Nothing is safe.
As I pointed out in April, credit disaster is modelled by the heat difussion equation. By the nature of the equation, it will spread. I believe, eventually, the credit market can absorb defaults as a business cost.
The correction can be a good time to buy so long as the the disaster does not affect the growth. But, when will be the bottom? The safe way would be - buy after the market confirm a retest of the recent low.
In this disaster, some hedge funds ran into trouble. A number of hedge funds were "surprised" to know that they had sub prime exposure in their investments. Nothing is safe.
# posted by Lobo @ 4:08 AM 
