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Stop Selling And Find The Floor

When you listen to the news and read the various reports on the financial crisis, the market's crash it is always intertwined with the problems in the economy. However, the two do not have as close a link as the media always report.

The economy is a slow moving beast with impacts both good and bad taking time to filter through. The economy has more to do with Main Street issues than those of Wall Street. The markets are speculative, where investors and traders swing money in and out of shares to try and make money on the volatility. Indeed a broker friend of mine was smiling happily with the increased commission their firm hade made over the last few months. And the trading arm, I enquired and got the same response, with traders really earning their money jobbing positions and making money on increased spreads.

Where there is a real coming together of markets and economies is through the investment in shares for pensions or as collateral against loans. This does have an economic impact but still takes time to get to the high street or the individual.

As governments pile tax payers money into banks what would happen if no one sold? No investor, no fund, actually no one sold! The traders would be forced to make a market that would find the floor and then they would have to find the price to which investors would deal. No deals and the brokers and traders, would not make any money!

It's a risky strategy, but is this any less risky as panic selling which only increases commissions for the middle man.

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Gary Wright

Gary Wright

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BISS Research

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19 Sep 2007

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London

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