Signs

I am a great believer in signs, indicators, signals, pointers or whatever you want to call them. By signs I mean bits of data which help us infer or conclude something. These cryptic messages are linked to the event but do not have a direct bearing on the course of the event. The stock markets have been in turmoil for the last few weeks and I have been struggling to search for signs which would indicate some sort of a bottom to the market.
The first sign was a newspaper report about some investor who had bought stocks recently with money he had saved for his sister’s wedding but lost more than 70% of his capital. This loss means he has to postpone his sister’s wedding. It is truly sad story, but highly clichéd as well. Don’t want to criticize the media, as it is not the intent of this article, but they need some imagination. Over the last week I read three similar articles in different newspapers. This leads me to conclude that some sort of bottom is being formed. The greater fool theory states that the value of an asset appreciates till you can find someone else who will buy it at a price higher than yours. In January we ran out of buyers, hence the great run came to a halt. The more I read articles of this nature, the more convinced I will be about my conclusion.
The second sign is the irrationality displayed during this week when stock markets across the globe tumbled 15-20%. The great panic and unprecedented has to be equalized by an equal and opposite force, albeit for a shorter duration. This leads me to believe some sort of a bounce in the markets. Once the irrationality is out of the way we can hope for some stability.
While I continue searching for more signs, would hope you (reading this) look out for some as well, and if you do stumble upon any, inform me.