This is the Opportunity
March 1st 2007 01:15
John Howard is right; that the fundamentals of the Australian economy are remarkably strong and there is no need for any panic. Tuesday's global market meltdown, as a result of a 9% plunge in the Shanghai Composite Index, wiped out more than half a trilion dollars of US equities.
It was both an overreaction and a blessing in disguise as the fundamentals of the Chinese economy is fully intact and robust, and the plunge was nothing more than an overreaction by its army of retail investors reacting to threats by the Chinese government to clamp down the over-heated stock bubble. The overreaction became a much needed correction, albeit in a rather quick and potent way.
As reported in Melbourne's broadsheet, The Age, Prime Value Asset Management chief investment officer Han Lee in the report "World sharemarkets plunge" said "Sometimes things happen not for rational reasons. People are very nervous."
Last week, a Malaysian Chinese-language daily, Oriental Daily News, Executive-in-Chief Ko Kek Hock said in reaction to the local bull run there,"When everybody is rushing into the market, it's time to exit; when everyone is rushing out, it's time to enter."
So the warning was already there. But despair not as it is bargain time now.
It was both an overreaction and a blessing in disguise as the fundamentals of the Chinese economy is fully intact and robust, and the plunge was nothing more than an overreaction by its army of retail investors reacting to threats by the Chinese government to clamp down the over-heated stock bubble. The overreaction became a much needed correction, albeit in a rather quick and potent way.
As reported in Melbourne's broadsheet, The Age, Prime Value Asset Management chief investment officer Han Lee in the report "World sharemarkets plunge" said "Sometimes things happen not for rational reasons. People are very nervous."
Last week, a Malaysian Chinese-language daily, Oriental Daily News, Executive-in-Chief Ko Kek Hock said in reaction to the local bull run there,"When everybody is rushing into the market, it's time to exit; when everyone is rushing out, it's time to enter."
So the warning was already there. But despair not as it is bargain time now.
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