Whenever markets become too much volatile, the patience of the investor being tasted. There is a trend in the advisory of the major brooking firms, All say that the long-term Indian story remain intact, and near term no one knows :)
The same Script……Market remains the same…just faces change… :-
- At 2 % Fall : It just a bull market correction…My goal is very long-term .
- At 5 % Fall : The monsoon is weak,but we have a strong government, anyways my hold period is more than 5 years.
- At 10% Fall : I should have had got out earlier,would have had made handsome gains.
- At 15% Fall : Bloody hell,I knew this was coming,the government is faltering,the growth is down,global economy is in doldrums.
- At 20% Fall: Now is the time to get out,China is in recession, Europe is in crisis ,the US jobs data has turned worse, I need to preserve capital.
- At 30% Fall: The outlook is grim all over the world,will wait more to reenter .
- At 35% Fall: Yup as I thought but the Fibonacci series tells that another 15% correction can be expected from here. I need to be patient,will enter around that period.
- At 5% Rise: It is a dead cat bouncing,will revert back.
- At 15% Rise: There is nothing in the economy to validate this rise, it has to fall,the market is not aligned with economy.
- At 25% Rise: The outlook is changing,the government is mending its acts,the global economy is rising,I will invest after a 5 % correction.
- At 40% Rise: Shit,I should have invested 35 % fall,but right now also there is value,I can make X Amount,Anyways
I am a long-term Investor…..
This scenario gets repeated again and again,An investor changes from having a long-term view to tracking technical points and then again starts having long-term view.The fall and rise of the market is always successful in changing the view points of the investor.Only those investors make money who are still intact on their decision..✔
Think what you are💭what you want to be😷& what can get you there😎
“Operational risk is the risk that is not inherent in financial, systematic or market-wide risk. It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems” defines investopedia.
Here is a classic case study how the famous brokerage firm Knight capital failed. More than 3 years ago, Knight Capital suffered a loss of nearly half a billion dollars and needed to sell itself after a defective software resulted in nearly $7 billion of wrong trades. The US SEC issued an order against Knight Capital that described exactly what happened this is interesting: View full article »
The Chinese authorities’ attempts to stabilize the country’s stock markets have been frantic—and futile. Interest rates have been cut; short-selling capped; IPOs halted; share-buying schemes hatched (backed by central-bank cash).
But the rout continues: the CSI 300 big-company index has fallen by one-third since early June; ChiNext, a would-be NASDAQ, by two-fifths. Trading in over half of Shanghai- and Shenzhen-listed shares has been suspended. Yet the stock market is still small by rich-world standards. Bull or bear, it makes limited difference to the real economy. Its political importance is rather greater. View full article »
History may rhyme, it doesn’t repeat itself’ (Twain). Or that, “the only thing that is constant is change” (Heraclitus). These two famous quotes apply to the financial markets as much as anything.
The way the mid and small caps in the Indian markets are trading gets to sense the equity markets are either at the start of a bull run breaking out higher or are on the verge of a break down lower.
Just correlate with layers 2007 and early 2008
- Sub Prime issue was lingering in the mouths of traders for three years before the pain struck. Now, Greece is lingering for five years. Markets did not price in the Sub Prime issue. Now markets have under-priced Greece exit.
- When the major markets peaked and languishing in ranges we have seen for about three months a surge in Indian equities (along with mid and small peaking to astronomical levels) then eventually Indian equities crashed.
Moving ahead from the Greece posts, on the famous theory of risk, return and the disappointment based on expectations.
See, stocks are stocks, bonds are bonds, and cash is cash. As an investor we expect 30% returns in stocks, 9% in bonds and cash depends upon the bank where the money is parked.
The minute we set an expectation for them to break this trade of risk for return, we’re setting ourselves up to be disappointed.
Let me break the silos and narrating a simple story:
Next to a mountain trail stood a twisted, gnarly tree. Hikers loved the shade it provided, but one day, a guy with an ax came along and decided the tree could do more than provide shade. View full article »