Stock Markets – Losers club ?

Equity markets slid anew.
Many are running for the hills.
Dismal outlook has been unveiled in the falling stock Index and increasing VIX.
Prices were collapsing and the bulls were racing to the exits.
Bears are making a great kill.
Of course the percentage is minuscule.
Last weeks’ sell off in stocks across the globe had done enough damage to the sentiments of traders and investors alike.
Politics and politicians  do continue to remain ignorant with less excitement.
Whether this fear spike should be embraced or avoided is a debatable question before investors and traders indeed.
A closer look at the  markets’ internal statistics definitely create a sense of unprecedented nightmare.
Further the media circus incite anger in the minds of the already bruised stock chasers and investment bankers.
Today I spoke to many leading punters and understand that the specter of hope of the easy buck is dim in the given circumstances.
In short the beat is very low.
The debt or financial crisis kept every investor on the edge.
Some people even think innocently today that whether stockmarket is losers club.
Stock market headline story in India too is not encouraging.
Investors lose Rs 9 lakh cr in 4 weeks.
Top 10 firms account for one-third of the losses; Sensex down nearly 15 per cent, 8 out of 13 sectors on BSE at 52-week low.12-month trailing price earning of Sensex has fallen 25 per cent in 9 months.Since November, the Sensex has declined 20 per cent. At the same time, the trailing 12-month price-to-earning (P/E) of the 30-share index has slipped 25 per cent.
The Bombay Stock Exchange Sensitive Index, or Sensex is on a 15-month low.
The top 10 companies lost a third or Rs 290,000 crore of their market value. These include Reliance Industries, Tata Consultancy Services, Infosys, State Bank of India and ICICI Bank.
As many as 687 of the 3,286 actively traded stocks have seen one-fourth market value erosion since July 25.
The price of 971 stocks declined by 15-25 per cent each. And, 654 stocks dropped to two-year lows, of which 12 are from the 30-share Sensex. Reliance Communications, Reliance Power, Mahanagar Telephone Nigam and DB Realty are among 146 companies at all-time low levels on the BSE.Eight of 13 sectors classified by the BSE are trading at 52-week lows. Realty, metals and information technology were worst hit, having declined more than 20 per cent each. The bankex, capital goods and power indices dropped 15-20 per cent each during the period.FIIs have been net sellers of stocks worth Rs 13,996 crore so far this year. Domestic institutional investors have, on the other hand, bought shares worth a net Rs 21,032 crore this year so far.

Now the moot question what one should do?

Scary price action drives scary news flow.
Hence the plunging markets made all the scary prognostications seem rational.
The scary August low is not a bad omen for the market.
This downfall is  definitely not a long stair way to the hell of economic gloom.
I am very confident that sentiment rebalancing will be achieved by prudent government policy actions.No government can sit and watch the situation without proper action. Global financial confidence will return back to normalcy. No one hereafter dares to stretch the rubberband of “debt” and “over finnacial leveraging”.

Enough is enough.No more greed waxing with the banking and financial system.

When I was a student my professor used to write the following lines on the board and would underline with colour chalk -“bargains are incredible” and “bleak episodes” should be  bought into when it comes to stocks and properties……don’t allow the fear mushrooms to grow”.
At the end of the day everyone knows that the life of money never changes.If you think deeply, money is not a technical system, in which progress is made. It is ofcourse a moral system, in which the same lessons get learned over and over again.

I cannot forget the lesson that I learnt from the global financial history-“buy the fear and sell the greed”.

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