Sunday, March 29, 2009

Phllip Capital Market Watch

Here is the summary of the video:

1. The market follows the human psychology. It has the following stages
  • Shock - 2007, people did not realize that banks have certain models that were very very risky,like the CDOs and stuff
  • Denial - 2007 ended up as people brush away the risks
  • Anger - Now people are angry with all the bail out $$ that comes from the tax payers, and all the $$ that the executives from failing companies get
  • Bargain- That is what is happening now..FEDs try to get people to buy stuff by setting up all the bail out plans, the fund that is combine with the private investors
  • Depression/Acceptance -Video did not say anything about it. But i feel that, it is the time when people really feel like that the market has no hope and stop investing in anything and lost their interest in investments in general
2. They believe the rally will continue..however it will still drop in the near future too.

3. Go long on 30year treasury bonds and silver ( because the FEDs are going to buy into them in the next 6 mths.

In my opinion, just buy commodities that are based in USD, like the metals. This is because, with all the bail out and stuff..USD will bound to drop.
Reason being, the real value of the commodity will still remain, but since the USD is worth less now, you need more USD to buy the same amount of commodity. Hence you gain the so called 'inflated' amount.