Every piece of jewellery either you bought or wearing it today has a story and memory behind it. You cannot deny it.
Like that there is hardly an investor in stock market, be a professional or an amateur, who doesn’t have some woeful or merrier sure tale that they could not miss to share with other investors.
Given the global economic situation market signals are beyond price fluctuations.
A de-programming of your investment thoughts are called for.
No older cult of thoughts work on stock investments.
No more stop-loss orders.
In the current environment it has become a much unsophisticated form of algorithmic trading.
I think that a new science of irrationality is catching up in approaching your stock investments.
Equity research analysts before writing any report should take note of it seriously.
Analysts should play devil’s advocate and present a much needed experiment in contrarianism.
When famous investors discuss their bad decisions in TV interviews it makes headlines.
But when ever small or retail investors make mistakes he continued to make more mistakes, over-extrapolate the trends, and systematically lose money. Mostly at this point he or she simply quit the market.
Stock market experts sometime say that among investors such lapses in judgments are a failure of common sense.
I wonder can common sense be taught or bought!
Price ups and downs in the market today do not throw any visible macro signals.
As you know that it is very difficult to capture lizard’s brains and its direction.
More often we notice or see lizards that swiftly scamper over old fences, logs, rocks, tree trunks, and across the ground.
It reflects good sensing patterns.
Definitely it is beyond predictions to any wisest brains on the earth.
Does the stock market price fluctuations are like lizards’ crawling patterns?
Equity Research reports are seldom able to picture those signals.
Equity research is not as easy as that of popcorn munching.
In today’s global economic and monetary situation market signals are beyond price fluctuations and equity research.
No more traditional stock market theories and analysis hold water in today’s context as the market has transformed from one dominated by long-term investors to one where hedge funds, proprietary trading and high frequency trading dominates.
Prominent scholars try to find out the psychological impact and the social mood of such price movements and its impact on investors and their investments.
Some call it as common sense and some name it as greed, fear or emotions.
A recent study titled “Twitter Mood Predicts the Stock Market” by Johan Bollen and Huina Mao of Indiana University claims that how emotions play critical role in investment decision making. “The number of emotional words on Twitter could be used to predict daily moves in the Dow Jones Industrial Average with 87.6 percent accuracy.
In the end neither I understand lizards’ brains nor the zig- zag nature of stock price fluctuations!
I fell comfortable if I could understand what the wise words in a big billboard inside the Steel plant in Jamshedpur, India, reads before betting my money in to the stock market.
”One who knows not and knows not that he knows not, is a fool, leave him.
One who knows not and knows that he knows not, is simple, teach him.
One who knows but knows not that he knows, is asleep, awake him.
One who knows and knows and knows that he knows is wise, follow him”.