We are witnessing history

The current financial crisis is probably a once-in-a-lifetime type of event. And I feel awed to be in the middle of it.

After losing eight straight days, the stock market rocketed on Monday (yesterday) with all major indexes ending up more than 11%. Stocks around the world rose in double digit percentages yesterday, after central banks and governments around the world vowed to provide "unlimited" liquidity for troubled financial institutions. England led the pack by first nationalizing some of its major banks. European countries were all offering deposit insurance for bank deposits, in an attempt to preempt potential bank run.

International stock markets had nice follow-through upon yesterday's huge gain. Stocks around the world ended higher on Tuesday. US equities started off on a high note today, up around 3% in early trading. Treasury Department announced a plan to immediate inject $250B into nine major US financial banks (sure, Goldman is included, along with Morgan Stanley, Merrill Lynch, BoA, Citi, JPMChase, Well Fargo, Bank of NY Mellon, and State Street). But the early gain slowly fizzled, with the market ending slightly down.

I think the road ahead will still be rocky. Hedge funds are stocking cash preparing for a rush of investor redemption. That is why when stocks were moving lower, oil and gold were also moving lower. The only plausible explanation is that hedge funds are unwinding their long oil and gold positions to build up cash cushion for potential redemption. This can last for a quarter.

But the stocks are cheap. There are plenty of opportunities to find high quality names trading at depressed valuation.

This is probably also a once-in-a-lifetime opportunity to buy stocks extremely cheap.