Stock market shakes the world. Markets for the week ending 10-Oct

Markets:

This week in numbers:

London -21.1%

Tokyo -24.3%

New York -22.9%

Brazil -22.5%

Russia -21.12%

India -19.3%

Shanghai -12.78%

As the market is facing redemptions and selling their liquid assets to raise cash, prime brokers are predicting as much as $1000-2000 bn could be withdrawn from the industry by early 2009.

Scenario

200 largest privately sponsored UK final salary pension schemes which accounts for more than half of all UK pension funds, are estimated to have lost 45b since end Aug and employers might be forced to invest more to make up funding levels.

History's lessons

On friday morning's trading, S&P500's fall for the decade was almost identical to its fall for the decade on the same date in 1938. Investors are likely to refrain and withdraw from the markets, however, I subscribe that basic balance sheet methods such as measures based on cash flow multiples and dividend yield which can work out how much a stock is worth if the worst came to the worst, should leave investors with a margin of safety and help set out a clear path to proceed with picking out some attractive bargains. Good Luck!