Buying to the sound of cannons

Perhaps the most crucial elements of any capital market, especially an emerging market, are confidence and liquidity. During the devastating days of the conflict between Hizbullah and Israel, both took direct hits. Shortly after the start of the conflict, the Beirut Stock Exchange decided to close. This closure, though guided by pure reasoning was a mistake or at least the length of the closure was unwarranted Despite the gravity of the situation, it ought to have been the BSE’s priority to maintain a semblance of normalcy and, more importantly, allow buyers and sellers to transact. This is especially true given that the largest stocks continued to trade in London as GDRs and sent a dangerous signal about the depth and liquidity of the Beirut market. Sell to violins, buy to cannons There is an adage in markets: sell to the sounds of violins, and buy to the sound of cannons.