A small story....

Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for Rs. 10. The villagers seeing that there were many monkeys went out in the forest and started catching them. The man bought thousands at 10 and as supply started to diminish and villagers started to stop their effort he announced that now he would buy at 20 rupees. This renewed the efforts of the villagers and they started catching moneys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to 25 and the supply of monkeys became so that it was an effort to even see a monkey let alone catch it. The man now announced that he would buy monkeys at 50! However, since he had to go to the city on some business his assistant would now buy on behalf of the man. In the absence of the man, the assistant told the villagers. Look at all these monkeys in the big cage that the man has collected. I will sell them to you at 35 and when the man comes back you can sell it to him for 50. The villagers queued up with all their saving to buy the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!

What is the similarity between Indian Cricket & Indian Stock Market

These days its like Indian cricket team. I seriously doubt the current windies series. What would you do incase the popularity for cricket is going down especially when windies is hosting the next year's cricket world cup!! One must revive the interest and which is the best way to do it? Get a strong cricket team and make it lose. Thats it. I feel this series would have been mutually agreed at high levels.

Big deal. What the heck this has to do with Indian stock market? Pretty simple huh... how do you attract lot of money? Make it popular... from 6000 to 12000 in just one year, hype it, talk about it, let media take care of advertising for it, create an impression as if its going to cross 20000 points... let the retail investor's hard earned money be pumped in. Now pull your (FII) money back...

Drawing similarities between these two.... look at mass behaviour of people. Its pure flocking nature. And others make money out of it.

**Disclaimer: All my posts are purely of personal opinions. You are most welcome to comment on my posts.

Stock market blues... cont...

Found some interesting statistics...
Today's market correction is the biggest single day fall in absolute terms (Sensex).

Single Day market falls
18-May-2006 = 862 Points ?? Global fall + Commodities fall + Fed Hike + Taxation of FIIs
28-Apr-1992 = 570 Points ?? Harshad Mehta Scam
17-May-2004 = 564 Points ?? NDA losses + Left joins Govt
15-May-2006 = 462 Points ?? Global Fall starts...

In percentage terms...
Oct 8,1990 = 15
Apr 28, 1992 = 12.7
May 17,2004 = 11.1
May 12, 1992 = 9.7
May 18, 2006 = 7
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Munich

Watched the movie Munich last weekend. Liked it. The way Speilberg makes movies !! Truely amazing. He shot the movie as it it was taken during early seventies.

The way Golda Meir potrayed is brilliant. Very inspiring character.

Indian stock market

Tell any stock market savvy person that lefts have joined the government or serial blasts in Bombay or war situation in middle east or new RBI credit policy, immediately he would ask how many points Sensex moved?

Situations like changing governments that do not suppoert liberalization, could be a big thing. Stock market crashed more than 200 points. Trading was stopped for a while.

Well, times have changed my friend. Two years is a considerable time. I agree, looking at the percentages, you might say it is just 7% down. But, when its big, a small percentage of change also effects.

Look at small investors who entered the markets at 12000 levels, hoping for 13000 or worse (rather best) 16000 levels. And if the market goes down 850 points in a single day who is protecting them?