The SENSEX !!
Somebody really needs to help me out here.... Is it me or is the stock market and in particular the SENSEX in India the craziest stock market in the world ?I mean virtually everyday we are witnessing either a drop of 5 percent or a gain of 5 percent.....in one day !!! You should read how the papers deal with it here. Actually they don't really deal with it anymore. There is no logic. If you ask me it is actually quite simple. There are some big boys involved here. They are manipulating the market. When the market goes down they buy in and make it look like things are going well. Midway through the day those desperate brokers at the midsize investment companies with alot of local Indians on their books and their backs think they can get in on a bit of profit. Later in the day individual investors come in thinking "hey things are getting better we can make a buck or 2". But.... by then it is too late. The next day, first thing after breakfast the big boys sell up and walk away with a tidy 5 % in one day !! Everyone else .....well....everyone else has lost again ! It is brutal out there I tell you. I must tell you that as yet I have not invested in the stock market here. It is no better than betting on black or red at the roulette table, for the small investor anyway. I wish I had a bit of play money just to see if I can catch the wheel in my favour.
I feel for the people who have put in money in the last couple of months. Not only have they seen their money shrink but worse still there are people making a ton of money on the back of their investments !!!
Peace and Love
I feel for the people who have put in money in the last couple of months. Not only have they seen their money shrink but worse still there are people making a ton of money on the back of their investments !!!
Peace and Love
posted by Sandy at Monday, March 31, 2008
3 Comments:
Some of what you say is indeed correct - there is market manipulation on a small scale, which is also done in USA and Europe. However, this is relevant to individual stocks, and unless done on a very big scale will not impact the index.
The volatility you see in the index is currently prevalent across the globe...in the dow, ftse, nikkei, kospi etc. Also, notice that the Sensex index "gaps" up or down (i.e. it opens up or down 5% and not during the day). Investment banks and other large investors are simply reacting to the movement in other indices, especially the dow (which really influences markets across the globe). For example, if the dow falls or there is some bad news overnight, the banks pull out risky money and invest in non-risky money (mainly govt bonds or precious metals and other commodities which reached their all time high last month).
The downturn you see since the start of the year is mainly due to foreign funds pulling out of India, which is deemed as a risky investment. Alas, we are all still in the hold of the mighty USA.
Sandy
These are interesting times indeed, and I think best avoided.
We are learning to live in volatile markets and this is not the time for widows and orphans to put their money into the markets.
Having dispensed with the cliches, the fact is that the markets are so unpredictable, simply because no-one knows what the true value is.
While there is certainly manipulation out there, it is fear that is driving people to only bet on one day gains. That's why you see big gains followed by sharp falls on a daily basis.
As a result the day traders are ruling the roost. Anyone with any real long-term perspective will wait till the dust settles before coming back in.
In reality, the sub prime crisis is a long way from the fundamentals of India. What we are seeing at the moment is fear and contagion and nothing really based on market and economic fact.
If you really believe that India offers long-term (i.e. 5-7 years) promise, then buy the index at every low you can. You're bound to do well - but only if you believe that.
Sheel
Thanks Rick... Thanks Sheel
Great insight.... The fact still remains that no one really knows what is going to happen and therefore this whole market is the biggest casino in the universe !!!
Peace and Love to you both :))
Post a Comment
<< Home