Thursday, October 16, 2008

KLCI At 27 Months Low Amidst Fear of Recession?!

Please consider this situation:

One day, I wake up from bed and I feel my body temperature is a bit high, my nose fells bit stuck and I don't know whether I am fit to work or not. No urgent assignment in the office today but of course there are deadlines for me to meet.

Then, I managed to get myself ready and get into the car and off to my office. While I'm driving, I have to exercise extra care of myself because my headache is getting worse. Luckily I managed to get to the office.

Still, I feel that I'm not fit to work, so, I have to go to the nearest clinic and see the doctor.

The doctor told me that my temperature is really high and he gave me a day of MC for me to have a good rest.

End of story....but now, lets guess on my next action:

Knowing that I am not healthy and the doctor gave me a day of MC, what will I do?
a. Ask for ambulance to send me home, request a stretcher and act like a truly sick person.
b. Take that MC and rest at home or at the suitable place, so that I can recover faster.
c. Get mad and blame my boss (and maybe resign).
d. Do more stupid things.
e. Be in my office but work with extra caution to avoid my health from deteriorating.

You know the answer.

Now, please help me understand this.
1. When the oil price increased, cost of living is rising, and political instability is higher, KLCI managed to hover around 1,100 to 1,200.

2. When there are problems in the financial market (especially since February or March 2008) after the bailout of Bear Stearns, then followed by the British government's tackling the fear of bank run (Northern Rock depositors withdraw money for fear of bank run), KLCI is still strong.

To relate to the above story, I opine that panic should not be there anymore as the warning has been there long ago. That day (February 2008), it is more sensible for one to decide that it is the time to quit from the stock market if they are afraid of unable to face the downside risk.

So, will you act like a sick person after the doctor verified your unhealthy condition? Or, will you exercise caution when the sign of trouble appears (of course if you missed the first sign, there are a lot more coming after that events)?
So, why panic?

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