Speed: The power of market forces

Speed's energy is infectious
I enjoy watching Speed music videos because the four girls, Hiroko, Eriko, Takako and Hitoe were typically featured in very energetic dance moves orchestrated to their (mostly) high energy tunes. The two lead singers Hiroko and Eriko were and are very competent singers who could perform live to the energetic dance routines while carrying the tune. Most impressive!

Kinetic energy in stock markets
Their energy reminds me of the raw power of market forces that has been unleashed in global financial markets resulting in the STI being beaten again down even as the bears successfully win another day on the NYSE. My portfolio has also taken a severe beating and essentially I have turned into a long-term investor as liquidating my portfolio under such circumstances would not help me very much. It is fortunate that I have holding power and hence am able to ride this market crash well enough under the circumstances. But it has been a humbling experience to see the raw power of pessimism and reaction to negative news arising from new disclosures of the extent of subprime problems permeating onto the shores of all markets in asia.

The market moves downwards demonstrate how when the fear, doubt and uncertainty translates into real doubt, real fear and real certainty in real selling down the stocks resulting is such a depressed stock market even when locally our fundamentals remain strong with the Integrated Resort and Formula One races coupled with positive economic outlook being factors that the Singapore market has conveniently chosen to ignore: or at least the foreign fund managers punishing the market has chosen to ignore them.

Turn adversity into a positive energy by learning from it
The only sliver of a silver lining that arises from this meltdown has been to acknowledge the power of market forces to move up and down very quickly in a short span of time when the market conditions are right. Investor sentiment can turn so very quickly in a blink of any eye when bad news from subprime fed with fear, doubt and uncertainty about the nature and extent can sweep through not just the US but global markets to result in the bears winning the days and weeks. It has also exposed my own lack of effective knowledge and strategies to counter such moves by using different types of instruments to hedge or to mitigate the hit on my portfolio.

Learning from Speed
I take comfort from being buffeted by the stock market perfect storm through learning more about myself, my limitations as well as my own emotions even as market forces pummel and send the STI moving one way or another. I take comfort in listening to Speed and letting their infectious energy jazz up my day and to dwell on the positive and not on the negatives. For tomorrow is another day and if you hold steady to the fundamental principles of investing, i.e. to invest only money you can afford to lose, have holding power and have a clear investment objective, those will help you ride out the storm.

Be well and prosper.