The market remains very volatile. Until this volatility settles to a more reasonable level, it is extremely difficult for the market to find a bottom.
The global financial crisis and meltdown have resulted in fundamental damage to worldwide businesses and economies. Some businesses will be badly hurt and some slightly. However, a few will actually be benefitting from this crisis.
How to value these companies' businesses today? This will be difficult. The earnings for the next few quarters will need to be tracked. Past earnings are historical and due to fundamental changes in the businesses of various companies, assessing the value of these companies based on historical earnings will be unwise.
However, some companies can be anticipated to do not too badly. These are traditionally in the defensive sectors of food and beverages, gambling, healthcare and utilities.
For other companies, particularly in the industrial, plantations, tradings, construction, and housing sectors, the future earnings will be difficult to project with any degree of certainty at present. Yes, some of these companies might have been oversold in the general negative sentiment of the present market but one can only be very certain of this when the results of the next few quarters are known.
In fact, the Singapore Stock Market is now below that of the time when SARS struck in 2003. Whether it will rebound quickly after the present crisis will not be so easy to fortell. The present issues are quite different. Moreover, the financial meltdown is worldwide.
In any crisis, there will be opportunities. As this crisis continues, unfolds and deepens, more opportunities will surface. Presently, the crisis still shows little sign of abating.
Have we got over the worst yet? Will the volatilities in the market abate soon?
Well, if you do know the answers, please share here. Meanwhile, my view is there are plenty of opportunities available and you do have the time to pick the cherry/cherries at leisure, now and/or later.
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