Watch that divergence

I have posted some data of things are getting better but financial markets are struggling to digest the implications because the degree of shocked was too severe. Most have not recovered from that shocked. The insiders are selling as fast as they can, for the fear the worst is yet to come. If you look at the speed and magnitude of decline in the first quarter, it was unbelievable fast and deep. When things are getting better for 2 - 3 months, they are just too skeptical that the worst is behind them. Shall we call this post-traumatic stress disorder ? Just like the Vietnam veterans struggling to return to civilian life ? Having bad dreams and screaming in the middle of the night? Those big boys forced to sell everything they have got between October 08 - March 09 will need to take a lot of time to heal. It will take at least one generation of new blood to have enough guts(balls) to leverage up in a big way again.

While the US consumer confidence index was creeping up but only 1% believe the recession is almost over, 5% thinks it will end within 6 months and 94% believe it will last a lot longer.

Many of you know that I talk a lot of big picture stuffs but I rarely use it to buy stocks. What I typically do is getting excited when the share price starts to decline, I will continue to watch and watch till it comes down to a point I feel it is cheap enough(even though) it can go down further. I will just keep watching that divergence till it is attractive to buy.

I am aware that the market is going to be volatile for a while, that is the reason I am still hiding behind good dividend stocks and keeping cash. Now you know why I am hiding behind Tanjong, defensive sector tends to do well in volatile times. If you have bought Nestle or BJ Toto pre-Lehman collapsed, chances you are still making money.