The Oscar Gruss Israeli office manager, Jonathan Halef, said "The most important thing in financial markets, particularly in times of crisis, is sufficient liquidity. A stop to trading cuts off the liquidity.
"It is clear to all that the US economy is undergoing an unprecedented boom, and in the medium and long term, stocks will again rise. Past experience, including the October ’87 Black Monday, shows that such days are an excellent opportunity to make purchases. The idea is to buy stock of good companies, that report good and stable results, yet were previously too expensive."
There are now purchase opportunities among good Israeli stocks as well. If shares such as those of ECI reach $20, it is obviously worthwhile purchasing them. Those who noted trading volume yesterday, saw that the share fell to $28 on a low volume of 740,000 shares. Galit too, whose share fell $4, did that on a low volume of 190,000 shares. In the NASDAQ double entry method, this ,of course, means half the volume.
"Low volumes show that someone panicked and quickly got rid of the merchandise. It could be one fund or one portfolio manager, who needed liquidity and threw the merchandise into the market. There is enough smart money and clever investors who know how to let a share fall before picking it up cheap.
"The Hong Kong crash, of course, is only an excuse for the US drops, and what takes place in the US market will affect stock exchanges in the rest of the world. It is as if the US is saying to investors in Europe and the Far East - ‘Did you think you could scare us? We’ll show you what a real crash is like.’