Investing Made Simple by Uncle8888 (11)

Read? Investing Made Simple by Uncle8888 (10)

Low tide, calm water and big fish?

It was low tide and the sea water is very calm. Uncle8888 has stopped fishing and was staring towards the sea and day-dreaming. Suddenly, someone shouted very loud that he caught a big fish. Really ah? Low tide and calm water and he caught a big fish?

When Uncle8888 looked at the big fish and thought that it was probably a sick or dying big fish. He advised the man to exercise caution and decided whether he was taking any risk to consume it. The man disagreed and said: "Wow, look at big chunk of flesh and so shiok!"

Naturally, high tide will bring in big fish from deeper to shadow water to look for food; and the big fish will follow the next tide cycle to swim back to the deeper water when the tide is going down. When the tide is really low and the water is very calm, big fish are naturally back to where they come from.

What is common sense to a seasoned fisherman may not be common sense to many others.

Read? A matter of common sense

High Yield, Higher Market?

When the stock market climbs higher, stock prices are going up and yield are coming down and that is normal market behaviour as new buyers are willing to step up their buying for lower yield and possible capital appreciation. Lower yield and higher market is expected.

When the stock market keeps climbing higher and the yield still remain high; then we will have a high yield, higher market. Hmmm...  Why are the new buyers not willing to step up their buying and still insist on buying on premium yield?

Back to the moral of the story. "What is common sense to a seasoned fisherman may not be common sense to many others." - Createwealth8888

Read? Use Your Common Sense In Investing?