Black Tuesday -- 27th February 2007

Is "Black Tuesday" is a stand alone stock market crisis?
What's the implication to the overall market?
Will people will shy away from investing in stock market? .... etc....

These questions arise after Black Tuesday which happened on 27th February 2007. It started from Shanghai and Shenzhen stock markets because of the rumour that Chinese regulator would impose a capital gain tax to cold down the soon to be bubble market.

Similar crisis happened in May 2006. While the market lost quite significant wealth in the short period, the market rebound after few months and passing through several new history high, especially in Shanghai, Shenzhen, Ho Chi Minn and Singapore.

While the incidence on Tuesday hurt many investors especially retail investors who bet on margin/loan and those deal with Day Trade and they may shy away from the market for a short period, they tend to forget and return to the market in the shortest period. My friends who gain 2 weeks ago and bet more in the hope that they will gain more but the incidence on Tuesday made their hope disappear. The overconfidence turns to sad mood after losing monies in the market. When you compare the "prediction" of those fund managers, chartists, technical analysts, media and so forth, you will puzzle that their "prediction" could change to reverse side in 2 weeks time. 2 weeks ago, they were overconfidence that the market will surpass new high but now all change direction.

Will people stop speculate/gamble on stocks? Very unlikely.... because

"What I learn from history is people never learn from history." -- Warren Buffett