The second-largest economy in the world closed shop on Thursday for a week to celebrate the Chinese New Year. It is new year that heralds, among other things, the Year of the Rat.
Chinese astrology is, by all accounts, based on a mixture of philosophy and astronomy that has evolved over the last 3 000 years.
Twelve animals combine with five elements to define each year in a 60-year cycle. This lunar year is the Year of the Rat, which combines with the earth element to be more accurately known as the Brown Earth-Rat Year.
Astrological analyses
Over the years, I have heard of many different ways of interpreting or predicting the market, but this week I stumbled on a bizarre and rather novel approach in an article, given to me by a colleague, that was sourced from Bloomberg.com.
Tony Tan, a stockbroker turned Chinese astrologer, made money for his clients by advising them that Asian equity markets would turn in "peak performances" in the Year of the Pig.
As it turned out, the benchmarks in 11 of the region's 14 largest stock markets, including China, Hong Kong and Singapore, reached all-time highs in the Year of the Pig, 2007.
Tan is predicting losses in the Year of the Rat, which began this week, and, he says that, "just like a rat, investors will have to be nimble this year".
He expects markets to bottom out in April, a dangerous month for stocks, and he feels that they may rebound in the second half, but without setting new highs.
Presumably in support of this thesis, our Mr Tan notes that the last Earth-Rat Year was in 1948 and found China engulfed in a bitter civil war and Japan recovering from its bitter Second World War defeat.
Clearly not a time when stock markets were surging to new highs.
In a survey held in South Korea recently, 60 percent of respondents said that they had consulted an astrologer for the Lunar New Year or planned to do so. So, it seems that a strong culture of consulting astrologers exists in Asia.
As this region is becoming ever more important in our lives, it behoves us to become better acquainted with its customs and cultures.
More traditional analyses
There are, of course, many other ways of looking at markets.
We have fundamental analysis, which offers a method of evaluating a company through measuring its intrinsic value by examining related economic, financial and other qualitative and quantitative factors.
Quantitative analysis is a technique that seeks to understand a market's behaviour using complex mathematical and statistical modelling.
Then, you get stock-picking strategies. These are designed to test the value-versus-growth methodology.
There are also the good, old-fashioned income investors who are simply looking for a secure and steady stream of income. This system is probably the most straightforward stock-picking strategy available.
Contrarian investing would be considered by many people to be a "fly-by-the-seat-of-your pants" method of investing where the investor seeks to profit by investing in a way that runs counter to the conventional wisdom. Unlike the herd-mentality investor, the contrarian believes that crowd behaviour can lead to exploitable mispricings in stock markets.
Simply stated, the view would be that widespread pessimism about a share can drive a price so low that it overstates the company's risk and understates its profitability prospects.
The contrarian will identify and purchase shares in distressed companies with a view to selling when they recover and ending up with above-average gains.
By the same token, widespread optimism can result in unjustifiably high valuations that will eventually lead to a drop if the high expectations do not pan out - I suppose the run-up in the information technology shares and the eventual "dot.bomb" collapse of late 2001 is a fine example of this.
You also get technical analysis and the boffin who likes to be referred to as a technician. He/she pores over graphs looking for resistance and support levels and tries to predict future behaviour, to some extent by studying past experience.
There are clearly hundreds of indicators and chart patterns to use and I have yet to find one that is infallible and which will allow me to retire in the style that I would like to grow accustomed to.
Then you get the speculators, the villains of the stock market whom nobody should emulate. Gambling should be the preserve of the casino. Nick Leeson, who brought Barings Bank to its knees, and, more recently, Jerome Kerviel, who gave Société Générale a nasty shock late last month, could be classified in this group of unfortunate miscreants.
All this probably goes to show is that we have yet to discover an accurate method of predicting the market, but investing can be fun and profitable all the same.
Homework is key
As usual, our advice remains consistent and that is that the stock market is one of the best investment avenues for the long-term investor.
It is vital that you have done your basic homework, assessed your risk profile and determined your objectives sensibly. Forget the "pie-in-the-sky" stuff you read about or hear from boastful friends.
Select good blue-chip companies that will give you capital and income growth, and that are involved in activities that you understand. Then it will not really matter what way the market is moving in the short term, as you are in it for the long haul and will be well rewarded.