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ThisPlay
presented by

Corporate metrics, updates, observations and


notes from PCG Intel Team company visits and
reports from the field
September 2, 2015 / 2:45 pm

As luck, or unluck would have it, as a professional, I have lived


through all of the crashes in the markets since 1987, contributing in no
small part to the multiplication of gray hairs over the years.
What I recall though is that while one day crashes all create the same
amount of anxiety, stress, and sometimes psychotic human responses
on the day itself, the longer term conclusion of such furious selloffs are
not the same at all.
Perspective and age does offer me a bit of an advantage in this regard,
whether to look at a flash crash as a glass half empty, or a glass half
full. This current market sell off is of the half full variety, in my
view.
As can be seen in the table of 1-day crashes over the years, there is a
marked difference in the performance of the markets 1 year after a
flash.
A 1-day flash crash triggered more losses a year later when domestic
factorscoup attempts, peso devaluation, impeachment trials
caused the market sell-off.
Conversely , 1-day sell offs triggered by external factors global
financial crises, Russian defaults, Greece, China, 9/11 give way to
higher market values a year later.
While it is hard to predict how global sell-offs behave given the wide
range of cause and effects in our modern and highly interconnected
world, we take note of historical cycles of crashes and rebounds, as
stock market highs and lows have always been similar, and has done so
over the past 300 years.

8200
7200
6200
5200

Series of Coup
attempts
US Stock Market Crash

Global Financial Crisis


Asian Financial Crisis

4200
3200
2200

Japan Asset

Tapering of US
Quantitive Easing
Program

1200
200

John Gatmaytan
*Based from previous closing price
Sources: Bloomberg, International Financing Review, Inquirer, Office of the President

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