Lets be positive with IO, page-10

Hi all,

in light of the vast differing views driven by the obvious chaos sweeping through the market, i suggest a call for calm and rational thinking. Lets explicate a number of Fundamental and Key issues.

1. Panicking wont solve a thing. About a month ago, I raised the point of the Chinese market being in a bubble and it was the general understanding that it was so. Hence, the astute participants ought to have factored such a risk into their valuations and decisions. But truth be told, even the best of us would not have seen such a drastic fall from grace in the IO price. But before you get your panties in knot, IO is not the only commodity getting flayed. Look around gents, its a market wide contagion.

2. The price IO is at is purely sentiment driven. if you have been following the industry and trading long enough, you ought to recognise that the price path IO has been experiencing is not a true reflection of supply demand trade off forces at work.

3. Im not sure how many of you are aware of the market conditions in China. Investors have moved from equities into CFD, Options and futures. A large portion of commodities trading has been made accessible to mom and pops investors. Whilst i dont claim to be the best versed at the myriad of instruments at our disposal, i believe it is fair to say that most of us are far more discerning than the housewives. Now try to understand what the average hairdresser or fish monger would know about these products before jumping in. Now that the ship has a hole, if you were in their shoes, what would be the most cognitively pleasing course of action to take.

4. This isnt a GFC scale meltdown, but likely sends the strongest signal yet of the bull market running out of steam. I have had a flood of reports from the banks urging caution and i quote 'not to catch the falling knife'. To that effect, I have sat through enough bullsh*t and been a participant of the financial industry to know that you dont grow your wealth and secure a future for your family by purely heeding the advice of others. I can understand the urge of many to cash out, having fallen prey to the bias myself many a times in the past, and will continue to fight my instincts. But put it this way, a large number of us have seen our wealth swell by identifying the opportunity at hand post 08.

5. Simply put, when the Chinese market begin its recovery, IO along with the other commodities undoubtedly follow suit. The only question is, but how much and how quickly. The industry is not broken or becoming extinct, it is merely out of balancing. That does not make it a crisis.

Ultimately, whilst we are all entitled to our opinions, some are evidently more helpful than others. There are a large number of users who turn to HC for a good read and even to learn or as a proxy for decision making. Personally, i dont encourage such behaviour, but I sincerely believe in doing what we can to offer up clarity and sharing.

Cheers all.