You'd Better Believe It
It's well over 14 years ago now, but I had the earliest inkling of something being very wrong in the market place. It's not like I had shares or anything then. It was this simple phenomenon that took place during August 2007. I had been working for the little tyrant in the production company for about 5months when suddenly I started to field a lot of calls by our suppliers demanding payment. At the same time, none of our clients were paying up. Cashflow had dried up all over town, and people rich and poor alike were trapped in this very stodgy illiquidity. We down ourselves smack dab at the cutting edge of the oncoming Global Financial Crisis. We were the canary in the calming of industry, so to speak.
From there, the market which had peaked in July that year started to melt down all the way down to March 2009 when it bottomed out. It was during March 2009 when despair seemed rampant and nothing seemed to be viable that I bought my first shares. Talk about being a contrarian; but then I had a reason to buy what I bought. I bought shares in the rival production company which had been listed and had a monopoly on hotel events around the globe. I did so mostly because I believe in the power of monopolies as well as the enticing price of 1.0 cent per share. A couple of months later it rose to 1.5 cents so I sold and made 50%. That was my first trade.
I think about that now and I just want to run and hide in embarrassment. First of all, even though I thought I had good knowledge of where I was putting my money, I was flying in the face of the market at full tilt. The rest of the market had deemed that company was carrying too much debt to do anything good, monopoly or not. And while 50% is nice, sticking money in penny stocks without knowing how that company intends to dig itself out of their hole is ... well, nuts.
At the same time I did some digging around the internet and to my surprise, I found that there were lots of other people like me who had decided that the bottom of the epic market collapse was a perfectly fine place to start dabbling in the share markets because the only way it could go was up. Honestly, my insanity as it were, was shared by a lot more people than I had anticipated. And that's the funny thing. The insanity of the makes begets more insanity because it draws in more crazy people willing to take a punt.
The world really is crazy enough, but people keep going into there markets equipped with nothing but their life savings and a hunch that it's a good time to buy.
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