Ouch ouch ouch!
Last Friday afternoon, I really should have pressed the sell button on my share portfolio.
After one week (so far) of blood letting in the share market, I am down over $30G!
It looks like Coronavirus is the black swan event which we all expected but which none of us were prepared to anticipate.
Now, we can watch and learn an object lesson in what really motivates the share market, as we watch the falls continuing.
There are two motive forces driving the share market. One is Greed, which pushes it up, and the other is Fear. Or, if you are to look more closely at Greed, and define it in the way which millennials would describe it, as the Fear Of Missing Out, there is only Fear.
And now Coronavirus driven Fear, based on the great reliance on China as a key component of the global economy, is causing the markets to fall.
Having resisted the temptation to push the sell button a week ago, I am now left with little choice but to ride out this market fall to the bottom, whenever and wherever that happens to be. This will be an ‘interesting’ experience for me. I knew nothing about shares when the 1987 crash happened, had only a negligible share portfolio in the late 1990s when the Asian financial crisis happened and then tech wreck around Easter 2000, and only about a third of what I currently have invested when GFC hit 12 years ago.
With Coronavirus in the mix, this does remind me very much of Edgar Alan Poe’s Masque of the Red Death – you can ignore the reality around you for as long as you can, and continue to party hard, right up until the Grim Reaper’s representative shows up on the dance floor….