A Mystery called Stock Market


Ok so all the stock market experts, if they were to read this post, would trash it as pure nonsense but I for one is completely mystefied by the whole stock market…

When the index is moving up in spite of the downturn in Asian markets and Dow Jones and et al, I see lot of excitement about the robustness of the Indian economy and how Indian market would lead the charge – no connection with the world markets…

The next day index drops, alongwith the global markets and all analysts on all the channels link the slide to the downturn of the global markets..

Third scenario – global markets going up…. and Indian market going down… and the analysts are back on the channels stating some vague industry statistic or a certain stock which is responsible for this..

I for one would like to know… are the fortunes of our markets tied to the global markets or not!

Does anyone really have a clue??

Now comes the hilarious stuff…

Experts recommend buying and selling stocks, again on various TV channels (wonder how these channels decide on these experts)… there recos are completely warped… I have tracked a few times… the stock these experts ask you to buy…on that particular day.. there is nothing spectacular about that stock.. or even later on… It does not even figure in the top performers for a few days… So either the experts are trying to peddle the stocks which they have bought…. or the public ain’t buying there argument…

And then there is this thing about NIFTY. NIFTY has support at X price and resistance at Y price. So if NIFTY crosses a certain barrier, than it can reach ( a figure is quoted) but if it goes down below a certain figure then it can find support at (another figure mentioned). And all this is spouted in the same sentence!! Now if you are an expert, you should have a clue which way it is going to move and put money where your mouth is! But then I guess, they are hedging their bets… These guys are no better or worse than astrologers or weather guys..

And while all this is happening, the market is on its own course… going up or down (usually inverse of what the experts are saying)… wonder who is driving the market.. surely not these experts… unless these experts and the people buying and selling the stock are playing the second guessing games… You know when expert says buy… everyone sells and when they say sell.. everyone buys!! (like you decide not to carry the umbrella because the met office has predicted rain)

And one another peeve – is the stock market really an indicator for health of the economy?? I have my serious doubts… The market has gone up from 9000 to 15000 and I dont see much change in the economy of the country… The uncertainty still exists… jobs are still being lost… increments are on hold… banks are not giving credit the way they used to… key industry sectors have not moved in line with the way stock index has… so why this fixation with stock market and all the indices which are pretty much useless! I mean a simple thing like Inflation figure… It is negative and yet prices of all essential commodities is through the roof! Boggles my mind!

I will never be able to figure out this mystery…

2 thoughts on “A Mystery called Stock Market

  1. Hey good post again. Only one thing I would like to add here is that I also fail to understand is how a certain company who’s fundamentals are good one day start crashing the next day. Or vice versa? I mean if the fundamentals of a company are good they would remain good for some time at least. Fundamentals cant change overnight.

    1. Hey Rajesh Thanks! And regarding strong fundamentals..as we all know how fundamentals can be projected to be strong… Satyam did it for so many years and it was the darling of the stock market! It is the same “experts” who kept propping up the stock…

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