We all witnessed yet another year of excellent stock market performance with the average market increasing much over 80%. From here on we feel the the performance in the current year would be below the expectation.
It is very evident from the last year's rally that its only the foreign money roughly $ 6 bn which has poured into India that has made the majority of the profits.
Among the domestic players - domestic institutions, MF & retail have been a net seller in the markets with both selling over $ 1.2 bn.
Given this background there is a growing sense of being left out and when one is in such a mental state one can commit some horrible mistakes.
My analysis of the entire situation is as follows.
If the market does not correct in the next 2 months and by correction I mean a minimum 10% fall from the current levels, then we can be rest assured that the next bubble has surely reached an advanced stage. The analyst community would be projecting future earnings as if they are astrologers. At that stage the technical analyst will tell you that the markets are going even higher. All this was repeated in Dec 2007 and early 2008.
On the other hand if the market corrects by that level, we will have a situation of a very dull market for more than 8 months. This will happen when we have poor inflation numbers with the risk of rising interest rates, crude again starts touching $100 to a barrel, rupee starts appreciating against the dollar etc
The two biggest data to look out for would be the rupee movement and the inflation numbers.
So with this background the only approach to investing would be to focus on companies, financials, management, corporate governance, competencies etc.
The purpose of this blog is to share / gain knowledge on the various happening in the world of finance, investing & economics.
Thursday, January 7, 2010
Friday, January 1, 2010
Astrology and Stock Markets
Happy New Year
I wanted to draw a comparison between astrology and stock markets. Astrology is a business of predicting the future. In Stock markets if the future is predicted correctly one would be in business. Given this close linkage between these two business I thought why can't you blend the two to astrogically predict the future.
Then I came across Astrological Funds.
It would be safe to assume that market trends based on planetary positions would be a good subject to study in your pass time, but the bottom line is one can make money in the markets by only picking the right company at a right price with adequate margin of safety
I wanted to draw a comparison between astrology and stock markets. Astrology is a business of predicting the future. In Stock markets if the future is predicted correctly one would be in business. Given this close linkage between these two business I thought why can't you blend the two to astrogically predict the future.
Then I came across Astrological Funds.
It would be safe to assume that market trends based on planetary positions would be a good subject to study in your pass time, but the bottom line is one can make money in the markets by only picking the right company at a right price with adequate margin of safety
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