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Emotions and desires do not protect stock markets .
Objectively .
Published in Alriyadh on 12 - 02 - 2011

When the economic and financial crisis happened , then the first solutions come quickly , and be in total emotional and do not been built on rational , scientific or enough aware of the surrounding circumstances .
I remember during the crisis of the Saudi stock market and the collapse of February 2006 and the announcement of many analysts and companies manager in one voice " do not sell " as if it will stop the bleeding and decrement of the prices , but what happened later ? , the continuation of collapsing and decrement remain with various percentages , but the lowest was 50 % at that time , and little few of the companies that had been returned back to its prices level now which are less than one hand fingers , and some companies remained losing about 80 % of its value today , and some companies stopped on fair , good and acceptable prices , so , what is controlling the market solidarity as whole and the stock market ? , is it the meriting price of the stock , of speculators ? , or daily sell and purchase ? , or other forces ? a wide and big question need a huge quantity of detailing , I will summarize what I can say here .
Markets could recede sharply , and lose values could reach 90 % , or 80 % , we suppose that most of the market companies , the question is : which is the company or companies that can recover its power very quickly , and stabilize on its acceptable and reasonable values ? will return only to the companies with good profitability , growth and management , three basic variables which are imposing the power of any stock or even market at all , but the bad thing which we see , that we find companies that its prices are not reasonable , that being receded and then corrected with the market correction , but its prices did not return as before , many of dealers think that it should return to its previous values , this is not correct , and very emotional speech at all , we should not compare or connect between the personal desire or how much you bought the stock , to return to its previous price , did you asked about its meriting and actual value , and where its price now ? , we have to agree that the recessions in the markets " any markets " are creating great opportunities for purchasing and investment ( even sell and repurchasing according to a specific time ) but with which companies ? this is the important question , first we have to know the fair and meriting price financially for any company that you desire to buy its stocks , who are the " board of directors " and the company management and their policy , growth , profit , distribution policy , stockholders rights and its growth , where the sector is stopping , when reading and analyzing these indicators , and found that the stock price " whatsoever " is meeting with the terms of investment purchasing, that it decreased less than its fair value , and it is a big opportunity , here the decision - of the wise and rational investor , who had a wide range view – comes , and he realize in that it is the time to be full of fear and to be terrified of the reasons of recession and decrement of the market and other markets , but it is a " calculated " and assessed risk , and should be courage and full of boldness to take the decision , otherwise how could be some rich whose their wealth in the financial markets and other going out from the back doors full of debts .
At the end I reach to the market that are supported by the key players, more than that is emotional and temporary and you can rely on it , the market do not protect the calls , appeal and desires in the same level of the power hidden in the market itself and its attraction of the investors who are existing and do not being absent at the time of golden opportunities , but they are few . Adam Smith believe with hidden hands in the economy , and believe that those hands in the stock markets in the hands of manufacturers and investors not others .


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