Added to Microsoft at US$150,3 and Singapore’s DBS Bank at US$59,9 yesterday.

This crash appears more in parallel to the 1973/74 crash than the 2008 one given that this is not being caused by a credit crisis but the compound effect of uncertainty with respect to a health virus, doubled with an oil price shock (this time on the downside).

Given how interconnected things are, I expect stock markets will recover much faster than that in the 1970s crash.

I have set buy prices for a number of my holdings but the stock market has to go down much more than where we are today for most of them to be executed.

As Warren Buffett said, people should not be in the stock market if they can not stomach their holdings declining 30%, 40% or even 50%. It does require a certain temperament to look at things analytically and objectively without emotions getting in the way, which is difficult for a lot of people.

One of the reasons for the significant decline in the stock markets, is Saudi Arabia’s action to implode the oil price which also has a knock on effect to banks with respect to the risk of their loans to oil related businesses and economies.

I do not believe that Saudi Arabia’s action is sustainable as their economy and foreign reserves will decline rapidly within a couple of years as they need oil to be at US$70 just to meet their country’s budget.

The 2020 cost, all in to produce a barrel of oil outside the Middle East is generally between $40 to $50.

The Middle East like Russia, due to lack of diversification in their economies, need oil at prices not at what it costs them to produce but what they need it to generate, given their societies’ cost structure.

If they reduced their societies’ cost structure instead by slashing benefits and services to their populations to maintain oil below US$50 to US$60, they would put at peril their own personal survival as leaders of their respective countries. That is why I view the current scenario being played out, a very short one with prices eventually rebounding by the end of next year, if not earlier.

I am used to my stock portfolio declining in any one year – in 2008 when I founded globalstockinvestingtoday.com, the portfolio declined by 33% that year and by 40% in March 2009, only to rebound by 89% by the end of 2009.

My stock portfolio page has been updated.