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.
It’s been observe that people find investing as one of the difficult task. Either they end up depositing all their savings in fixed deposits, gold or they become the scape goat of ULIP (insurance).
Moving on to some quotes on the investing and financial markets that might change the perception of yours. There isn’t right and wrong, there is two sides to the coin, but rich dad exists on only one side of the coin, the business and investor.
Yes, there is some risk involved with investing, and it can be scary. But if you don’t take control of your cash and moves forward you, well those are famous ones from Rich dad -Poor dad. Continue reading “Why investing is difficult?”
The single greatest mistake investors make is to extrapolate recent history out into the future. They take the financial returns of the past 5 days or 5 years or even 50 years and assume the next few days or years will look just the same without any consideration for the historical context or conditions that provided for those returns.
They forget that, while ‘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.
Ignoring these truths and instead simply extrapolating is why investors are suckered into pouring money into the stock market only after a run of great performance. Continue reading “Mistake made by the Investors – Past Performance”
You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand. -Ben Graham
There are plenty of folks out there that want you to believe that there’s only one way to make money in the markets (and they’re only too happy to show you how). This is just not true. I truly believe that there are as many ways to make money in the markets as there are unique human beings on the planet.
One thing I hear more and more, especially on social media, is that when it comes to investing, “one size fits all.” Continue reading “Success Secrets in Financial Markets”
September 15 2008 was one of the most extraordinary days in global financial history.A simmering credit crisis exploded into a full-blown apocalypse in the global financial sector when Lehman Brothers filed for bankruptcy.
With assets of $639bn and a further $613bn of debts, it was the biggest corporate bankruptcy in the US. The collapse of Lehman had immediate repercussions, frightening financial markets around the world, but with hindsight its demise has come to embody the failure of investment banks to adequately assess risk and invest accordingly.
Market Performance (from the close before Lehman BK) – Silver +71%, Gold +61%, S&P +58% ( For S&P the dividend are not accounted for. Including dividend it will be close to 88%)
Here is a must watch documentary of 60 min : “The West is done, it’s over! We screwed it all up. Do you want your great-grandchildren speaking Chinese 🙂