HI
Mood swings are normally related to the level of hormones of various kinds in the human body.When market goes up we feel happy and when it goes down we feel unhappy.Sometimes we do not give due regards to facts also. That is the basic element in creating herd mentality. When there was short term upside how many os us thought that worst is over and its time to invest. Why , for the fear of beeing left out. When Market was at 2632 , how many of us though to enter. Not many. why, because for the fear of loosing more. We don't know to what extent market rise or fall . Why because we don't realyy assess the value of a stock and do pure momentum play , to borrow a phrase from TV.We believe others and doubt our own judgement. That is why we always look to others for tips. True that all knowledge is not available to a single individual and to that extent any decision will be based on partial knowldge and at best probabilistic.However , when we take uninformed decision based on herd mentality, we have to suffer the consequences.
The market failed to follow the DOW/NASDAQ for two days in a row and when both indices rose, ours fell. There were concern that we have run ahead of ourself and need to cool down. Let us think. This week is the culmination of all impornat event of Fed rate rise. Market has been anticipating 0.25% rise. Some where it was reported that 120 out of 122 surveyed economists expected 0.25% rise while hedge funds expected 0.5% rise. Last month it was general expectation of 0.25%. And this month suddenly stake was upped to 0.5%. If FED increse is on the expected line then market will rise or else it will fall since additional increase may not have been factored in.
Since FEDs are not telling anybody in advance we have host of analysts feeding on the expectations(they have to earn a living afterall, doing something out of nothing). This week Market is expected to remain volatile. Any sharp downward move will provide the opportunity to pick the best of the lot.
Now , people have started to think in terms of PE. dividend yield and PB ratio. So I have given some of thse values for NIFTY and SENSEX in previous post. If you think PE of 17 or 16 is high and 10-12 is reasonable then you have to wait for more correction. But you have to remember that PE or PB is a composite ratio which reflects earnings and CMP. You have to think of in terms of future outlook. FA is again in thing So study the stock and be ready.
Oil prices will fluctuate as always.It has gone up from 37 to 70 and above. Iraq crude is one leverage. Iran factor is another one. OPEC is legalised cartel controlling supply. Those countries which have substantial production would be largely insulated but not India as it imports 2/3rd of crude.ONGC, being premier organisation, has miserably failed in its responsibility .But then it does not matter(???) as long as we are able to source our supply. The world will continue like that. Inflation will also remain in place. Interest rate will rise and then fall and rise again.
Does this all mean that market will always fall and never rise as bears would have us believe. No , the volatality is part of market function of finding true value and we have to respect it . The question remains how far we go down. In my opinion all emerging markets have performed better than rest of the world. India will continue to do so. So our downside will be limited.
We are not so aware of the fact that low cost funding for developing countries are available in plenty and of late private sector is also allowed access to that. So interest rate rise may not pose a big problem for developmental and growth work. Speculation, yes. It will be less. Good for the market. Personally I don't feel happy to see someting rise 10 Times when normal rate of return is <40% only.
Dow and Nasdaq ended in green territory and hopefully this will keep the sentiments up. Arcelor deal will also have its impact as and when market decides to rise.
Ahmed. It is not my best efforts that keep the market up or down. I have just tried to put accross the factors which influence the market. Now with this downfall people have woken up to the reality that it is not a blind 100 mts race but a marathon.You have to factor in lot of things especially FIIs and global cues.Is it excessive to the point of obsession?? Do check yourself. They can make and break technical parameters including overbought/oversold macd rsi and what not.You just have to control those variables on a controoled selling or buying. For a market lacking depth , this is pretty easy to do when money is available in plenty. In any case they have used only 4% of their money. I am of firm opinion that this is not going to increase without hurting their own interest. In my previous posts I have given details of returns also.Mumbai Mirror was launched in Mumbai last year. I was in Mumbai for some work. Such news papers do look for sensationalism. Times Of India can not do on its own, being main stream newspaper. So they are doing it through Mumbai Mirror. While nothing is impossible, this seems pretty difficult and looks like interested comment of Morgan.
Believe in yourself and do your own analysis and keep track of FII and global cues. Remain invested for long term. Traders will always have opportunities irrespective of market direction. But investors will get opportunity to invest once in a while. It is very good to say thatsuch and such stocks are in my watch list and quite different to have it when it was low. I did it when everybody was screaming hard not to invest and I can tell you that all my LT has been good so far. I need not worry at all. If you invest with select picks after three years you may not regret it. Do follow your discipline.
Czar. After quites sometime you posted here. I am happy that you remided of your forecast. You will find me in the queue alongside yourself for good stocks even at that time. I remember telling somebody that I would buy a particular stcok, if it falls to the level mentioned by him or if it goes below the level mentioned by me. That stock never did. Not even now.
For Long term investors. I hope by thins time you would have your choices ready. Expect valatality this week. Direction will emerge only after end of June. A period of consolidation will be there when stocks will,be accumulated by the wise and strong. Don't let the opportunity go . TA is the way to indicate when to make an entry for individual stocks. FA is the way for selection of what to enter.
We have a long long way to go.
Pankaj
Mood swings are normally related to the level of hormones of various kinds in the human body.When market goes up we feel happy and when it goes down we feel unhappy.Sometimes we do not give due regards to facts also. That is the basic element in creating herd mentality. When there was short term upside how many os us thought that worst is over and its time to invest. Why , for the fear of beeing left out. When Market was at 2632 , how many of us though to enter. Not many. why, because for the fear of loosing more. We don't know to what extent market rise or fall . Why because we don't realyy assess the value of a stock and do pure momentum play , to borrow a phrase from TV.We believe others and doubt our own judgement. That is why we always look to others for tips. True that all knowledge is not available to a single individual and to that extent any decision will be based on partial knowldge and at best probabilistic.However , when we take uninformed decision based on herd mentality, we have to suffer the consequences.
The market failed to follow the DOW/NASDAQ for two days in a row and when both indices rose, ours fell. There were concern that we have run ahead of ourself and need to cool down. Let us think. This week is the culmination of all impornat event of Fed rate rise. Market has been anticipating 0.25% rise. Some where it was reported that 120 out of 122 surveyed economists expected 0.25% rise while hedge funds expected 0.5% rise. Last month it was general expectation of 0.25%. And this month suddenly stake was upped to 0.5%. If FED increse is on the expected line then market will rise or else it will fall since additional increase may not have been factored in.
Since FEDs are not telling anybody in advance we have host of analysts feeding on the expectations(they have to earn a living afterall, doing something out of nothing). This week Market is expected to remain volatile. Any sharp downward move will provide the opportunity to pick the best of the lot.
Now , people have started to think in terms of PE. dividend yield and PB ratio. So I have given some of thse values for NIFTY and SENSEX in previous post. If you think PE of 17 or 16 is high and 10-12 is reasonable then you have to wait for more correction. But you have to remember that PE or PB is a composite ratio which reflects earnings and CMP. You have to think of in terms of future outlook. FA is again in thing So study the stock and be ready.
Oil prices will fluctuate as always.It has gone up from 37 to 70 and above. Iraq crude is one leverage. Iran factor is another one. OPEC is legalised cartel controlling supply. Those countries which have substantial production would be largely insulated but not India as it imports 2/3rd of crude.ONGC, being premier organisation, has miserably failed in its responsibility .But then it does not matter(???) as long as we are able to source our supply. The world will continue like that. Inflation will also remain in place. Interest rate will rise and then fall and rise again.
Does this all mean that market will always fall and never rise as bears would have us believe. No , the volatality is part of market function of finding true value and we have to respect it . The question remains how far we go down. In my opinion all emerging markets have performed better than rest of the world. India will continue to do so. So our downside will be limited.
We are not so aware of the fact that low cost funding for developing countries are available in plenty and of late private sector is also allowed access to that. So interest rate rise may not pose a big problem for developmental and growth work. Speculation, yes. It will be less. Good for the market. Personally I don't feel happy to see someting rise 10 Times when normal rate of return is <40% only.
Dow and Nasdaq ended in green territory and hopefully this will keep the sentiments up. Arcelor deal will also have its impact as and when market decides to rise.
Ahmed. It is not my best efforts that keep the market up or down. I have just tried to put accross the factors which influence the market. Now with this downfall people have woken up to the reality that it is not a blind 100 mts race but a marathon.You have to factor in lot of things especially FIIs and global cues.Is it excessive to the point of obsession?? Do check yourself. They can make and break technical parameters including overbought/oversold macd rsi and what not.You just have to control those variables on a controoled selling or buying. For a market lacking depth , this is pretty easy to do when money is available in plenty. In any case they have used only 4% of their money. I am of firm opinion that this is not going to increase without hurting their own interest. In my previous posts I have given details of returns also.Mumbai Mirror was launched in Mumbai last year. I was in Mumbai for some work. Such news papers do look for sensationalism. Times Of India can not do on its own, being main stream newspaper. So they are doing it through Mumbai Mirror. While nothing is impossible, this seems pretty difficult and looks like interested comment of Morgan.
Believe in yourself and do your own analysis and keep track of FII and global cues. Remain invested for long term. Traders will always have opportunities irrespective of market direction. But investors will get opportunity to invest once in a while. It is very good to say thatsuch and such stocks are in my watch list and quite different to have it when it was low. I did it when everybody was screaming hard not to invest and I can tell you that all my LT has been good so far. I need not worry at all. If you invest with select picks after three years you may not regret it. Do follow your discipline.
Czar. After quites sometime you posted here. I am happy that you remided of your forecast. You will find me in the queue alongside yourself for good stocks even at that time. I remember telling somebody that I would buy a particular stcok, if it falls to the level mentioned by him or if it goes below the level mentioned by me. That stock never did. Not even now.
For Long term investors. I hope by thins time you would have your choices ready. Expect valatality this week. Direction will emerge only after end of June. A period of consolidation will be there when stocks will,be accumulated by the wise and strong. Don't let the opportunity go . TA is the way to indicate when to make an entry for individual stocks. FA is the way for selection of what to enter.
We have a long long way to go.
Pankaj