Market Review and Trends
Bull Market Baloney and Bear Market Valuations
By Musicwhiz  •  June 10, 2008
By: musicwhiz Strange title eh ? At the risk of sounding silly, the title is supposed to represent my posting on the valuations inherently found within a bull market, versus a bear market. Interestingly, as we have observed currently, the bear market is not even fresh into a year (12 months), yet people seem to be complaining that it's "too long" and everyone is hoping against hope that the bear market will end soon and signal the start of the new bull. From a personal standpoint, I do not advocate either bull or bear as I focus on companies and the external factors which affect my companies' performance. Still, a bear market always makes it all the more attractive to search for bargains amongst the companies listed on SGX due to the low accorded valuations by Mr. Market. A quick scan I did this weekend turned up many companies (many of them China ones) which were trading at single-digit PER, despite decent prospects for growth. Just 8-10 months ago around August to Oct 2007, the same companies were trading at 20-30x PER. Which brings us back to the topic above - bull markets produce a lot of baloney (nonsense) because everyone bids up the prices of companies to absurd levels, bringing about ridiculous expectations which results in wanton speculation and excessive over-valuation. Of course, the term "irrational exuberance" (coined by Alan Greenspan himself) comes to mind but this term is so oft used it is becoming a cliche in itself. Read more...
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By Musicwhiz
Musicwhiz who is in his 30s is educated in accounting and works in the investment line (but not in a bank, financial institution, brokerage or fund house). He has a have a full-time job and investing is his side-line as well as passion. Musicwhiz is a value investor and his technique is derived from the teachings of Warren Buffett, Benjamin Graham and Phil Fisher. He incorporate all aspects of their investing style, and modify his value investing style to the Singapore market.

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