Like the title says, simply put – today could have ended much worse compared to the closing numbers that are streaming across tickers worldwide.

Last night started off with a major sell-off in Asian markets..it was primarily a sign that confidence in the global markets is wained to even new lows and that was being increased with the OPEC decision to cut production by 1.5M barrel/day

Everyone for the most part expected oil prices to jump with the reduced supply. But this did not happen. Why? Its simple, with the major drop in global production, the slow down in economies is LARGER than expected. Even with such low supplies on the market, demand it still low and only going to get lower. Hence, oil prices on the markets showed drops.

Now going back to the Asian markets, last night they dropped 10%…that is a huge drop and American markets were setup for the same results. By 8:31am this morning, 59mins before market open, there was talks that trading could get halted if the markets “crashed”. It was expected that today would be the worst open in the history of the markets and there was huge sell offs on the per-markets.

I saw RIMM down to $40/share, AAPL down to around $89/share…GE was down…everything you can think of was down…and people were dumping for whatever price they could get….classic textbook panic selling.

Once the markets opened, the drop in the markets was large, but as we can see over the course of the day the markets did rebound a bit as capitalists got in to get in on the bargain share prices. I was luck to pick up RIMM for $41 and then dropped it for $45 later in the day and the same thing with AAPL..I got it at the opening low and sold for a $4 profit.

They way I saw it, people will always panic on small bad news. Yes there is volatility in the markets, but you need to play with a clear head. Just because somebody screams the sky is falling, you dont start running around like a chicken without its head…any rational person needs to assess the situation before making a move. This is why, when I talk to investors, I ALWAYS recommend NOT to sell before the regular market opens. Dont buy on spikes after earnings pop share prices, dont sell a stock like people did today before the market opens..your getting ripped off…this is your money and I’m sure emotions do get in the way, but you need to take a deep breath and relax.

This year to date has been excellent for myself and a few others that took my advice this time last year. When the Canadian dollar was above the price of the American dollar, I told everyone to buy as much American currency as possible and just let it sit in an appropriate account. Many people did and some of us purchased $10 – 15,000 USD for a rate of .99-.91 depending on how you timed it. Now the time has come to push that back into Canadian currency for a profit of anywhere from 25-35%. You can do the math on this one.

This was the best investment strategy for anyone that does not know how to hedge a currency. Although some might argue that the rate might get better as the Canadian dollar gets weaker, but I would not let greed get in the way. Compared to the 4% return that a bank would offer, I managed to give you a healthy return.

Kudos to us that stuck it out and followed the cyclical pattern that I was referring to.

Many times I have referred to the stock market as a cycle. Although the media might make this a monster for their own ratings purpose, looking back at history, we have seen times like this where the markets have cracked and panic has erupted.

Your money will be safe as long as you dont panic. Just like in any instance, panic always results in further misery and irrational choices.

For the upcoming week, I am long on my holdings that I picked up at the close. I got some heavy weights such as GE, Wal-Mart, and McDonalds. If these dont go up in the sort term, they are long term beauties as in slow economic times people will shop at “cheaper places” and eat and more value places..hence the picks.

If anyone has something they want me to specifically talk about, you are always welcome to email: question@bullsbattlebears.com

-Aman, MBA

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