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Making Money In A Bear Market Situation - Investment - Nairaland

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Making Money In A Bear Market Situation by RYSB: 8:58am On Sep 27, 2008
To the contrary, the bearish trend in the market is not a loss of monetary value as we all have been made to believe. Money has just exchanged hands. Velocity of money states that; Money flows from the point of least knowledge to the point of higher knowledge thereby creating opportunities. The truth is; money is never lost in the capital market, it could only be transferred from one person to another. While some people are dejected and panicking because money is being transferred from them, others are excited because money is being transferred to them.

For the first group of people their prayer is "let this cup pass over us Oh Lord!" However, it is "thank you Lord!" for the second group what an irony of life. The same market the same country, the same economy and the same rule but different results from different players.

The US stock market has experienced market crash or bearish trend more than any stock market in the world. The severity and duration of the bear market of 1907, 1929/1932 1973/1974, 1961/1962, 1969/1970, in the US capital market are to buttress this fact. In addition, after a prolonged bullish trend of 1990's "dot com boom" the US capital market has been bearish since the year 2000 yet people are making billions of dollars daily in the market. It is noteworthy to point out that Warren Buffett, William O' Neil, Jesse Livermore, Benjamin Graham, Charlie Munger, Philip Fisher and Walter Schloss have made so much money in this same market bear or bull. In 2007 alone, Buffett made over $10 billion in a bear market! and is still making more money. He made his wealth substantially by investing in shares of companies in the US stock market.

The legend, Warren Buffett, the richest person in the world by Forbes Magazine 2008 List of world richest persons and their net worth, put the asset value of Buffett at about $68 billion. Interestingly this man turned on an investment of $105,000 into a $20billion plus investment fortune by investing in the stock market. It may further interest you to know that he made the chunk of his money in a bear market that started in the year 2000 and since then Warren Buffett the Oracle of Omaha has never looked back. His net worth has continued to increase in multiple folds whether in a bull or bear. Therefore it could be deduced from the investment life of Buffett that, money is made in the market at all times, Bull or Bear and that bear markets actually presents a life time investment opportunity. If Warren Buffett could achieve this feat then it is much easier to achieve the same feat by simply looking at what he and others in his league did and do the same. That is exactly what I intend to achieve during the course of this write-up. Having established the fact that Bear or Bull, money is made and that bear market is actually a life time opportunity.

The fact is that you can always stay ahead of the market in the aggregate yearly no matter how ravaging the bearish trend may be. Bull or Bear is a win-win situation and you could advance more on your winning streak in a bear market.
As the administrator of the www.reportyourstockbroker.com online forum my Job is to make you money and make sure you dont burn your fingers.
It is important to mention that this article was written before the federal government intervention to stem the tide of bearish trend in the Nigerian capital market. However, as long as the capital market exists bearish and bullish trends shall never cease. Positive intervention is good but let it be clearly stated that it is not targeted at you as an individual investor per se although beneficial, but ultimately it is your knowledge of investments in general and by extension of the capital market that determines your financial report card.
Re: Making Money In A Bear Market Situation by RYSB: 9:56pm On Oct 13, 2008
Good job Keep it up

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