heartsong

Thursday, March 01, 2007

Do You Need Dutch Courage?

So the market failed to rebound today. Contagion,they say. Hogwash!

There was quite an animated opening at 9 a.m. but half an hour later, the bulls lost "their balls" and vamoosed. The bears are now having a gala time, feasting on the misfortunes of the poor retail players.

This just reminded me of the cartoon movie, "An American Tale". When the emigrants traveled by ship from Russia to America, they had much safer quarters on the upper hold of the ship. The mice, on the other hand, embarked via the ship's portholes and had to sleep in the underbelly of the ship's hold where they suffered damp conditions and were oftentimes awash with sea water when the ship weathers a storm.

The humans disembarked on Ellis Island for processing while the mice had to make their way out of the portholes of the ship and look for new quarters in the sewerage system of New York.

The humans in this case are akin to the fund managers while the miserable mice are the retail players. Retailers have to take more risks as they lack capital.They seldom get a good deal. They cannot average down as much as they want or take advantage of market dips. They only pray to ride on a long-term ever-rising giant wave of a bull run. It has not happened. Since mid-December 2006, only fund managers were ramping up the market. Retailers only came in significant numbers before Chinese New Year and before you know it, they are damned!

It looks like they would have to hold on the their much depreciated shares until another good day dawns.

As we can see, the blue-chips are recovering quite fast this morning except for bellweather Maybank. The second liners are doing okay and the penny stocks do see some amount of biting and chewing at the current bargain level. The market will surely rebound when Maybank "lompat"! So watch out for this indicator of indicators.

Knowing this, do you now have the courage to come in or do you need a swill of blended whiskey to give you Dutch courage?