Do not catch the falling knife

Written on September 15, 2008 – 8:04 am | by Kampung Boy |

Today our beloved KLCI dropped another 12.40 points and the COmposite closes at 1031.63. From a high 1300 to a almost breaking a 1000 level mark.

One might wonder, WOW is this the best time for me to buy equity since it has dropped almost 250 points? Cheap sales ma…

I am sure many of you are stuck with stocks at CI 1100 to 1200 range and looking for opportunity to average down.

My advice to all is not to catch the falling knife at the current moment as you will end up like the picture.

I am pretty sure our good friend KLCI will plunge lower due to some reasons. How much lower? I can’t tell…

Here are some the reasons for a meltdown :-

Political turmoil in Malaysia (916 , UMNO, etc)
Financial crisis in USA (Sub Prime)
Lehman Brothers (declared bankrupt) - Today Lehman tomorrow…?

Many other reasons but this are few of the main reasons. Genting at RM 5.00 is cheap? Tenaga at RM 6.70 is cheap? Will be cheaper once all the dirt comes out from the carpet.

Moral of the story, Do not catch the falling knife! You will get hurt…

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