Revaluation and Repricing
17 August 2007Back in August 15, Dragon wrote in his DMN the following:
“After all this rain of blood is over, there will be a revaluation and repricing, and nerds will come out with numbers on how the selling has been overdone.”
This was a very funny but true comment and i have that funny feeling that i will probably be one of those nerds who will come out with numbers to show that the selling (when it stops) has been overdone. Due to the recent downturn, people have been wondering where the bottom of this market is and how far can it be from current prices. We have tried to find the bottom using Technical Analysis and charting but for some reason the market has constantly proved us wrong.
One has to think whether this selloff has already been overdone, and i am sure a lot of people wish they had the data or analysis to prove just that. The revaluation and repricing of our stock market and the many issues that make up the exchange are done regularly by market forces. We just cannot remember nor are cautious enough to see the selloff coming because we are too busy watching our stocks increase in price and therefore creating our paper fortunes. Lately i’ve been hearing the many negatives that this market has caused, things from arguments all the way up to bankruptcy in just a span of 3 weeks. Though there are many negatives in this type of market, we must all remember that stock markets eventually bounce back no matter how deep the fall. It has happened before and it will happen again. We should learn to see this recent downturn as an opportunity to buy some of our favorite issues at prices which a few weeks ago we couldn’t have dreamed of. (after the massive selling has stopped of course)
So keep cool, relax, take a vacation. By the time you get back, stocks will be priced much cheaper. Its not yet the end of the world anyway.
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