Stocks report: The bubble gets bigger

The situation on the overall market began to resemble the speculative bubble period in 1994. The reaction of the market to new share issues is positive, a rare occurrence in "neutral" periods. The third strong bull market in the history of WSE is taking place six years after the last bubble and 12 years after the first.

History is repeating itself and the outcome will also repeat itself. After the bubble bursts, the bear market could last for three to four years. The buy and hold strategy never worked in Poland before, and my guess is that it won't in the near future. The reason for that is the "trader" approach to the Polish stock market which many investors take. That means that they are willing to buy the stock and sell it in case it gives a certain profit or the situation changes dramatically. The reasons for the last two bubbles bursting were the Russian crisis and the very big sell-off on the Nasdaq. The probable reasons for the third bubble to burst can be a large fall in commodity prices, political events in Poland or a crisis in a country in the region.

Adam Łaganowski,

WGI Dom Maklerski