Stop! There's no such thing as bottom

There is no such thing as bottom. In March, many respectable analysts told us that the stock market had touched a significant bottom. Now, where is the bottom?

I think it is very unwise to fish for the bottom. The truth is you never know where it is same as you never know where the peak is! Who really knew that our Hang Seng Index reached the peak when it touched 32,000 last year? Some famous players in the Hong Kong Stock Casino predicted that the HS Index would reach 40,000 within a short time and many innocent (ignorant) gamblers followed the prediction and put down huge bets. Now, they are losing and put the blame on others. You see you never know where the peak is same as you never know where the bottom is!

Remember the warning given by our richest man in Asia, Mr. Li Ka Shing, that the stocks in Mainland China were extremely overvalued or over-priced? Did those innocent gamblers listen to him? No! So don't put the blame on the others.

The Hong Kong Stock Casino is a crazy venue. While we all know that Mr. Li Ka Shing has been buying back shares in Cheung Kong (1) which is a very positive sign to support the stock price, the gamblers just ignore it. If you look at the P/E and prospect of Cheung Kong, then you should know it is unwise to ignore such buyback by Mr. Li. Instead, gamblers still stick to stocks like the Hong Kong Stock Casino, which is priced at very high P/E, despite the warnings and downgrades given by a number of analysts. See it looks we are in a mad mad mad casino. No wonder why the Hong Kong Stock Casino is not too attractive to overseas companies and except Mainland Chinese companies, we can find very limited listings of non-Hong Kong or foreign companies or businesses in Hong Kong.

I suggest that we all go back to the basics and fundamentals of investment. Look at the business and determine its value, then mark a margin of safety and see which is the entry point that your conditions can afford. Never be ruled by speculators, the big crocodiles in Wall Street, the herd running in the hill and be brave to stand out from the crowd.