Thursday 22 March 2012

Interesting thoughts on Post-Bubble performance of stocks

Interesting thoughts on Post-Bubble performance of stocks

The long-term price movement of hindsight-driven bluest-of-blue-chip stocks in a post-bubble scenario is most interesting.

Take a look at this one:

I'm sure that we ought to learn a very careful lesson from the above when it comes to booking profits (our cutting losses) at the end of any major bull run.

According to experts, we're just entering the next major bull run which is likely to last a few years, or till it reaches index PE Ratio of 25 and beyond. While we ought to enjoy the bull run by accumulating blue chip companies, we should constantly remind ourselves of the importance of what happens to stocks after the bubble eventually bursts!

Regards,

N


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