SOMETIMES YOU GET it right and sometimes you get it wrong. A few months ago, with the Hang Seng Index near 11,000, I wrote in this column that I thought the market was cheap and I was jumping in to buy some more stock.
Well, I do not rue having bought Hang Seng Bank. With a dividend yield near 5 per cent when I bought that one, I am quite happy to sit on it for a while and collect more income than I could get from almost any other reasonably secure investment in Hong Kong dollars.
But yes, this is one timing call that I cannot clap myself on the back for getting right. I say the market is cheap and will bounce again but there can be no guarantee that it will not get cheaper before it bounces and that the bounce will not take longer to come around than I thought it would. This call has clearly gone against me recently. Retired stockbrokers are obviously no better than working ones at stock picking.
One thing I will not do, however, is say that the cause of the market's weakness lies only in the present slow pace of Hong Kong's economic activity. Nor will I attribute it only to the most recent bout of peg worries or a continuing decline in property prices or anything that has to do with Hong Kong alone.
Look at the performance of the index since the beginning of 2000. As the first chart shows, it started the year at 17,369, tried to keep itself up for nine more months, and from then on the trend has been fairly steadily down to yesterday's close of 9,712. It represents a lamentable performance for share prices, no doubt about it.
But we do not live on a separate planet from the rest of the world. Other Asian stock markets have generally also done badly and even share prices in the United States have tumbled with the collapse of the Internet boom in early 2000. How badly have we done relative to others?
