Fear of the Unknown

I was so amazed by the heavy sell down in the market for the past few days. Not only by the economic effects, but more towards the human reaction. I think I've read some statistics somewhere that the total market capitalisation that have been wiped out from the global capital market is more than USD4.5trillion (as at 15th Aug 2007). This figure is at last count, must be at least a few percent higher by today (note: market capitalisation is total number of shares times market price per share. So, in this context, the total value of all listed entities around the world have lost more than USD4.5trillion within days.) (2nd note: 1 trillion is 1,000,000,000,000). This amount can buy out a few times of the total sub-prime loans of the market. So? How to explain this down fall? I would rather call it the "Human Fear of the Unknown".

I have heard many people around me kept selling their holdings over the past few days. Ask them the reason? well, some are selling to limit their loses, others, because fear of the unknown future. They are afraid because they can't see the bottom of this and don't know how bad this may become. The fear to lose more.

Anyway, dear readers, let me share with you some very nice quotes:

"Humans always have fear of an unknown situation -- this is normal. The important thing is what we do about it. If fear is permitted to become a paralyzing thing that interferes with proper action, then it is harmful. The best antidote to fear is to know all we can about a situation." -- John Herschel Glenn, Jr.

Fear makes the wolf bigger than he is. -- German proverb

Nothing in life is to be feared. It is only to be understood. ~Marie Curie

The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is fear of the unknown.’ — H. P. Lovecraft

Fear is one very interesting human behavior. It leads people to make decision that they will not do during normal circumstances. This might be another interesting topic that worth further studies. Anyway, in my humble opinion, the current situation might get worse and take time to recover, but am quite confident that it will NOT go into a heavy recession from this sub prime crisis. So, it is certainly an exciting time to start accumulating undervalued stocks that have undergone some major sell-offs. Good thing is, even our great Warren Buffett has been reported to have start accumulating stocks in some Banking and Insurance stocks lately. Imagine, it's like a major discounts promotion at the shopping mall out there. Funny thing is, the stock market presents a totally opposite scenario, where people actually run away from discounts promotions. Fear, can be friends.

Happy shopping!!