Friends,
Seems the market is trying to make a base at 14,000 to 14600 level...that is what I wrote here last...
Like I wrote in last crash in May 2006....at then 8888 that it is time for bottomfishing....
I am seeing many boaders at MMB still giving bearish calls but I think the bottom has been made...
Well, it is true that when chartist and analyst were gungho at 21000 , predicting a target of 25000 and more....means in Bull market everyone didn't know where is the top then at 14700 also after retracing for 7000 points from the high , how one can be so sure of a target of 12k or 9999 (i.e....below 5 figure....la Shankar Sharma).....or even 8000...
I hope if wishes were horses......if one think and that happens.....is that so easy.....
All the projections of lower targets seems to me rediculous.....maybe individual stocks can go down which are still highly discounted.....but overall market should remain good...if this is how SS....or anyone think market can go down.....then in next 2 months ....it can be 7000 and another 2 months Sensex will be ZERO...........
Just in last sep Shankar Sharma was very very bullish and was giving call that sensex will touch 25000 in next 6 months and he will be surprised if that doesn't happen......I was then surprised how a Bear can turn a BULL .......and now he is coming out of his true colors.....
What changed the entire outlook.....India story gone in dustbin?
Even if we expect that if we slow down even then GDP will grow at 8% ....and that is still ok at higher base.....remember our economy is growing at over 9% sonce last 3-4 yrs and has made a higher base....and constantly doing that is difficult...
Well,I heard that some good futures contract of Nifty of Apr future for LONGS were bought by some big heads....and also heard that some good short position were also created for Apr Nifty futures by the Bears.....
Now we have to see who wins in April...It is BULL or BEAR........
But my take is market should remain good ..maybe inbetwen Profitbooking coming but overall market should consolidate as written by me earlier....
I have written let March pass here in past.....
But as stocks has gone over 60% below the 52 week high.....I would again like to write some stocks which are worth a look though almost all stocks are looking extremly good among which we discussed....but still I am writing them and maybe some new included...
1)Ispat Ind
2)Jayaswal Neco( great chance to buy those who missed)
3)SBTL
4)Vishnu Chemical
5)SKS Logistic
6)Innocorp Ltd
7)JCT Ltd
8)Asian CERC
9)Sujana Towers
10)Spice Jet
11)India Glycols
12)XL Tele
13)Gremach Infra
14)Guj State Petro
15)Ril Infra
16)Assam Co
17)Alfa Transformer
18)Minda Ind
19)Flex Ind
I think I have written many of them here and at mmb.....
Take your own call....again I repeat I can go horribly wrong..........as I got in Allied Comp.....
But this is a great chance to accumalate stocks of great story unfolding in future.....take your call and invest........
Sunday, March 30, 2008
Wednesday, March 26, 2008
Two good quotes
1) Many of life's failures are people who did not realize how close they were to success when they gave up.
2) There are two ways of meeting difficulties:
You alter the difficulties, or
You alter yourself to meet them
2) There are two ways of meeting difficulties:
You alter the difficulties, or
You alter yourself to meet them
Does it means that we are almost at BOTTOM?............
I am pasting a post I read somewhere....which makes a good sense..:
A comparison between the savage corrections of May-June ’06 and the current one highlights some startling similarities. After closing at the then all-time high of 3754 on May 10, ’06, the Nifty plunged, losing just under 30%, before finally bottoming out at 2633 on June 14, ’06. This loss of 1,121 points was a 78% retracement of the rally that had started after the correction of June ’05, from a level of 2316 on the Nifty. In technical analysis, the 78.6% retracement is seen as a significant support level and the fact that it was not violated augured well for the Nifty. The result? The Nifty rallied sharply and reached a new all-time high within the same calendar year. This time round, after hitting a new alltime high of 6357 on January 8, ’08, the Nifty witnessed a savage correction, losing a similar 30% at close on March 17, ’08. But the point to be noted is that this loss of 1,854 points is close to a 78.6% retracement of the rally that had started from the lows of August 17, ’07, from a level of 4002 on the Nifty. So, if last Monday’s closing value of 4503 is not violated on a closing basis, we have a strong case for the resumption of a rally.
WHAT MORE?
At close last week, the Nifty March put-call ratio was quoting at 0.79, oversold by any stretch of imagination. And almost unbelievably, the 5100 put continues to see a build-up of close to 19 lakh shares, the highest among all put options. Although the Nifty has swung wildly between 5000 and 4500 in the past 6-7 sessions, the 5100 put has hardly seen unwinding. Neither have these putwriters bailed out at higher levels, nor have they panicked at sub-4500 levels. This suggests that a level of 5000+ is still possible on the Nifty, though it will require a monumental effort by bulls. Traders willing to bet on this should buy call options, as that will limit the downside. And the best one looks to be the 4700 call, which is available at an absolute bargain, at an implied volatility (IV) of 37% and a downside of less than Rs 40. However, brave-hearts betting on this would do well to keep it small and have a strict stoploss at a close below 4503, because all we are trying to do is catch a falling knife. At the same time, the 21% of Nifty futures positions that have been rolled over into the next series also reflect that bears are trying to bail out and are not very confident of rolling over into the next series, whereas the bulls are slowly, but surely, trying to put at least their first foot forward. On Tuesday, while March futures shed close to 44 lakh shares in open interest, April futures added more than 20 lakh shares and in the process, shot up from a discount of about 50 points to a slight premium. This suggests that a majority of the futures rolled over on Tuesday were long positions. Interestingly, the very next day, while March futures shed more than 28 lakh shares in open interest, the April futures added only about 16 lakh shares and in the process, pushed itself from a premium to a discount of over 20 points. Although most of the rolled-over positions on Wednesday were shorts, the fact that they were probably lower than the number of long positions rolled over the previous day indicates that bulls are slowly trying to muscle their way in.
Does it means that we are almost at BOTTOM?............
A comparison between the savage corrections of May-June ’06 and the current one highlights some startling similarities. After closing at the then all-time high of 3754 on May 10, ’06, the Nifty plunged, losing just under 30%, before finally bottoming out at 2633 on June 14, ’06. This loss of 1,121 points was a 78% retracement of the rally that had started after the correction of June ’05, from a level of 2316 on the Nifty. In technical analysis, the 78.6% retracement is seen as a significant support level and the fact that it was not violated augured well for the Nifty. The result? The Nifty rallied sharply and reached a new all-time high within the same calendar year. This time round, after hitting a new alltime high of 6357 on January 8, ’08, the Nifty witnessed a savage correction, losing a similar 30% at close on March 17, ’08. But the point to be noted is that this loss of 1,854 points is close to a 78.6% retracement of the rally that had started from the lows of August 17, ’07, from a level of 4002 on the Nifty. So, if last Monday’s closing value of 4503 is not violated on a closing basis, we have a strong case for the resumption of a rally.
WHAT MORE?
At close last week, the Nifty March put-call ratio was quoting at 0.79, oversold by any stretch of imagination. And almost unbelievably, the 5100 put continues to see a build-up of close to 19 lakh shares, the highest among all put options. Although the Nifty has swung wildly between 5000 and 4500 in the past 6-7 sessions, the 5100 put has hardly seen unwinding. Neither have these putwriters bailed out at higher levels, nor have they panicked at sub-4500 levels. This suggests that a level of 5000+ is still possible on the Nifty, though it will require a monumental effort by bulls. Traders willing to bet on this should buy call options, as that will limit the downside. And the best one looks to be the 4700 call, which is available at an absolute bargain, at an implied volatility (IV) of 37% and a downside of less than Rs 40. However, brave-hearts betting on this would do well to keep it small and have a strict stoploss at a close below 4503, because all we are trying to do is catch a falling knife. At the same time, the 21% of Nifty futures positions that have been rolled over into the next series also reflect that bears are trying to bail out and are not very confident of rolling over into the next series, whereas the bulls are slowly, but surely, trying to put at least their first foot forward. On Tuesday, while March futures shed close to 44 lakh shares in open interest, April futures added more than 20 lakh shares and in the process, shot up from a discount of about 50 points to a slight premium. This suggests that a majority of the futures rolled over on Tuesday were long positions. Interestingly, the very next day, while March futures shed more than 28 lakh shares in open interest, the April futures added only about 16 lakh shares and in the process, pushed itself from a premium to a discount of over 20 points. Although most of the rolled-over positions on Wednesday were shorts, the fact that they were probably lower than the number of long positions rolled over the previous day indicates that bulls are slowly trying to muscle their way in.
Does it means that we are almost at BOTTOM?............
Asset Bubble : Raw Explanation
I got a Mail in my box which made an interesting reading.....I am pastinng it here for everyone:
Here's a very interesting anecdote that describes how an "asset bubble"builds up and what are its consequences.Read it even if it confuses you a bit...things will be clear as you reach the end.... ANCEDOTE -Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar. A has a loan to C of 1 dollar, so his net asset is 1 dollar. B sold his land and got 2 dollar, so his net asset is 2 dollar. C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar. The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC. As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar. B loaned 2 dollar to A. So his net asset is 2 dollar. C now has the 2 coins. His net asset is also 2 dollar. The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A. As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar. B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar. C loaned 2 dollar to B, so his net asset is 2 dollar. The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only." A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating. The net asset of the country = 3 dollar again. Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6dollar in paper. his net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now. A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar. ************ ****End of the story******* ********* ********* ** There is however a redistribution of wealth. A is the winner, B is the loser, C is lucky that he is spared. A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Here's a very interesting anecdote that describes how an "asset bubble"builds up and what are its consequences.Read it even if it confuses you a bit...things will be clear as you reach the end.... ANCEDOTE -Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar. A has a loan to C of 1 dollar, so his net asset is 1 dollar. B sold his land and got 2 dollar, so his net asset is 2 dollar. C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar. The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC. As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar. B loaned 2 dollar to A. So his net asset is 2 dollar. C now has the 2 coins. His net asset is also 2 dollar. The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A. As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar. B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar. C loaned 2 dollar to B, so his net asset is 2 dollar. The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only." A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating. The net asset of the country = 3 dollar again. Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6dollar in paper. his net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now. A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar. ************ ****End of the story******* ********* ********* ** There is however a redistribution of wealth. A is the winner, B is the loser, C is lucky that he is spared. A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Tuesday, March 25, 2008
My view Vindicated...........
Friends,
I am happy to note that again my view gets vindicated on two things:
1)I categorically wrote in my last post that there is no need to sell now at 50-60% down price, actually it is time to buy....
2)With market moving up by 900 points, it agained proved that technical are useless tools......
I am more happy for the second one.... Though I do not claim of anything.....as this is simple logic that I am applying......nothing more....maybe my experaince is coming handy....
Vasanth, see this is what happens with technicals.....now all the supports and breakout between 15288 and 16216 , like say , 15550-15700-15985-16100 are major resistance levels and they were broken in a single day......but the anamoly will be this chartist will still say, that it is just a day....wait for 2-3 more days for clear signal......and then buy.....that is horrible....
I still say, this charts is for Day trading or for a week trading and that too also not even 10% perfect.....No one can win in ST....all the great fortune made in stock market, be it Warren Buffet, Peter Lynch or anyone...they were LT.....HOLD the stocks which are great in fundamentals....that is the bottom line....
I again reiterate, if you have money to invest for only 1 year to invest, don't come to market.....there is no guanrentee that within a year you will get good return as market moves on sentiment and no one knows when the sentiment gets bad and the worse like we saw recently in Jan/Feb/Mar......If one is ready for an investment for 2-3 yrs atleast then only come to stock market and invest....if the stock goes up within a year then it is OK, but should be ready to hold for longer period...
Will anyone tell me which analyst forecasted looking at the chart that there will be a big upmove of over 900 points today?Did chart forecasted that?
I suggest and advice my readers that please refrain looking at charts and playing hencewise....as charts may prove right for once twice ,but most probably will take you in deep loss.....I have not seen anyone making big profit from technicals.....
I remember , I saw Anil Maghnani of Modern Sharebroker , a day back saying that on chart he is seeing there is no investors confidence and he sees more down side from hereon.....and actually from thereon the market take a U turn.....
I am happy to note that again my view gets vindicated on two things:
1)I categorically wrote in my last post that there is no need to sell now at 50-60% down price, actually it is time to buy....
2)With market moving up by 900 points, it agained proved that technical are useless tools......
I am more happy for the second one.... Though I do not claim of anything.....as this is simple logic that I am applying......nothing more....maybe my experaince is coming handy....
Vasanth, see this is what happens with technicals.....now all the supports and breakout between 15288 and 16216 , like say , 15550-15700-15985-16100 are major resistance levels and they were broken in a single day......but the anamoly will be this chartist will still say, that it is just a day....wait for 2-3 more days for clear signal......and then buy.....that is horrible....
I still say, this charts is for Day trading or for a week trading and that too also not even 10% perfect.....No one can win in ST....all the great fortune made in stock market, be it Warren Buffet, Peter Lynch or anyone...they were LT.....HOLD the stocks which are great in fundamentals....that is the bottom line....
I again reiterate, if you have money to invest for only 1 year to invest, don't come to market.....there is no guanrentee that within a year you will get good return as market moves on sentiment and no one knows when the sentiment gets bad and the worse like we saw recently in Jan/Feb/Mar......If one is ready for an investment for 2-3 yrs atleast then only come to stock market and invest....if the stock goes up within a year then it is OK, but should be ready to hold for longer period...
Will anyone tell me which analyst forecasted looking at the chart that there will be a big upmove of over 900 points today?Did chart forecasted that?
I suggest and advice my readers that please refrain looking at charts and playing hencewise....as charts may prove right for once twice ,but most probably will take you in deep loss.....I have not seen anyone making big profit from technicals.....
I remember , I saw Anil Maghnani of Modern Sharebroker , a day back saying that on chart he is seeing there is no investors confidence and he sees more down side from hereon.....and actually from thereon the market take a U turn.....
Monday, March 24, 2008
Is US recession drifting towards 1929's......period?
Well Friends,
I read an article somewhere and I am pasting some excerpts here.
Great Depression questions resurface amid current economic conditions, just as they have during other downturns
Fears resurface amid latest turmoil, as they have during previous downturns, but parallels are few and regulation has changed
Dysfunctional capital markets, frantic central banks, stressed-out consumers, fear and uncertainty—all are alarming echoes of the global economic cataclysm of the 1930s.Which raises the inevitable question: Could another Great Depression be lurking over the horizon?TV news programs show grainy footage of Depression-era bankers as reporters tick off grim economic statistics. The Federal Reserve invokes powers it hasn't used since the 1930s. Critics of President Bush's economic policies are emboldened to use the H-word: Hoover.
On the surface, there are disquieting parallels between economic conditions in the early 1930s and those of today. There is the popping of enormous asset bubbles: stocks then, housing now. And, as in the Great Depression, the financial system is in disarray. It was symbolized back then by the failure of thousands of banks, mostly small, local outfits—2,300 in 1931 alone.The parallel today is the crippling of onetime giants such as Bear Stearns Cos., Countrywide Financial Corp. and Ameriquest Mortgage Co.Many economists believe the U.S. will find it almost impossible to avert a recession, if one has not started already. Housing remains mired in a deep slump. The Commerce Department reported last week that new residential building permits nationwide plummeted 36.5 percent in February from a year earlier.Then, like now, stock prices were highly volatile. The Standard & Poor's 500 index, which fell more than 56 percent from 1928 through 1940,nevertheless recorded four up years in that span, including a 46.5 percent gain in 1933.The shadow of the '30s looms over every economic downturn or crisis, no matter how modest. Pundits were quick to invoke the Depression as a cautionary model during the stock market crash of 1987, the bailout of the giant hedge fund Long-Term Capital Management in 1998 and the dot-com meltdown of 2000 and 2001.But there are vast differences between the 1930s and today. U.S. unemployment reached 25 percent during the Depression; last month, it was reported at 4.8 percent. The international industrial economy was a shambles in the '30s. Today, it is coming off a global boom."I've been asked many times whether we will have another Great Depression," said David M. Kennedy, a Stanford University history professor and the author of "Freedom From Fear," a Pulitzer Prize-winning history of the Depression and World War II. "My standard answer is that we won't have that one again. I'd be surprised to have one of that seriousness and duration. But that doesn't mean we wouldn't have a catastrophe we haven't seen before."Nothing demonstrates that as vividly as the Fed's orchestration of the takeover of Bear Stearns by JPMorgan Chase & Co. The deal staved off a possible bankruptcy, which the central bank feared might traumatize financial systems worldwide.The resolution drew a stark contrast with the Fed's role in the 1930 collapse of the Bank of the United States, a New York institution largely serving Jewish immigrants. The failure was then the largest in U.S. history, and the Fed's inability to arrange a rescue by Wall Street banks, including J.P. Morgan & Co., the predecessor to the "white knight" in the Bear Stearns case, caused a cataclysmic loss of confidence in the entire national banking system. That fueled a panic that historians regard as a key cause of the Depression.The Fed's relative powerlessness in 1930 led directly to New Deal reforms that vastly expanded its authority. Some of the agency's new powers, such as its ability to lend directly to brokers and investment banks, were seldom or never used until the current crisis.
Fed Chairman Ben Bernanke, an expert in the central bank's Depression-era history, is also knowledgeable about the instruments at its disposal in a crisis.In a 2002 speech, when he was a member of the central bank's board of governors under Alan Greenspan, he outlined a number of drastic steps the Fed could take in extreme conditions and still remain within its legal authority.Among them were buying up foreign government debt to influence dollar exchange rates, and even lending, if indirectly, against private assets.
The subject of Bernanke's speech was how to combat deflation, a broad decline in consumer prices that is not currently a problem on the Fed's agenda. Still, the powers he described could apply in a wide range of dire scenarios.
There are also limits to what monetary policy, the Fed's responsibility, can achieve on its own to forestall a drastic economic downturn. The Franklin D. Roosevelt administration not only reformed the Fed but also experimented with stimulative fiscal policy, such as unemployment relief.
New Deal programs aimed at staving off a wave of home foreclosures might be especially relevant today. Among the most important was the Home Owners Loan Corp., or HOLC, which is one of several models for homeowner relief being considered by Congress.HOLC took over 1 million mortgages in default starting in 1933, worked to keep the owners in their homes and made new loans to strapped mortgage holders. When the agency was finally liquidated in 1951, it even returned a small profit to the U.S. Treasury.
My View:
If 1 million houses default were there in 1930's, while comparing the population, then in 1930's and now in 2008 in USA......then we can assume that 10 lacs housing loan defaults can be considered very very big.....While we compare this with the recent housing default crisis, it seems to me very very less then what happened in 1930's.
Hence I feel what Shankar Shrama spoke about the 1929 type scenario again visiting looks pity difficult to arrive....
I think Ben Branake is the BEST person at the helm of affairs and I am confident he will be able to aver the recession situation and bringing the US economy to a Slow down or on the brink of a longterm slow down.....I think US market should rally from the second half....means from June onwards.......
I read an article somewhere and I am pasting some excerpts here.
Great Depression questions resurface amid current economic conditions, just as they have during other downturns
Fears resurface amid latest turmoil, as they have during previous downturns, but parallels are few and regulation has changed
Dysfunctional capital markets, frantic central banks, stressed-out consumers, fear and uncertainty—all are alarming echoes of the global economic cataclysm of the 1930s.Which raises the inevitable question: Could another Great Depression be lurking over the horizon?TV news programs show grainy footage of Depression-era bankers as reporters tick off grim economic statistics. The Federal Reserve invokes powers it hasn't used since the 1930s. Critics of President Bush's economic policies are emboldened to use the H-word: Hoover.
On the surface, there are disquieting parallels between economic conditions in the early 1930s and those of today. There is the popping of enormous asset bubbles: stocks then, housing now. And, as in the Great Depression, the financial system is in disarray. It was symbolized back then by the failure of thousands of banks, mostly small, local outfits—2,300 in 1931 alone.The parallel today is the crippling of onetime giants such as Bear Stearns Cos., Countrywide Financial Corp. and Ameriquest Mortgage Co.Many economists believe the U.S. will find it almost impossible to avert a recession, if one has not started already. Housing remains mired in a deep slump. The Commerce Department reported last week that new residential building permits nationwide plummeted 36.5 percent in February from a year earlier.Then, like now, stock prices were highly volatile. The Standard & Poor's 500 index, which fell more than 56 percent from 1928 through 1940,nevertheless recorded four up years in that span, including a 46.5 percent gain in 1933.The shadow of the '30s looms over every economic downturn or crisis, no matter how modest. Pundits were quick to invoke the Depression as a cautionary model during the stock market crash of 1987, the bailout of the giant hedge fund Long-Term Capital Management in 1998 and the dot-com meltdown of 2000 and 2001.But there are vast differences between the 1930s and today. U.S. unemployment reached 25 percent during the Depression; last month, it was reported at 4.8 percent. The international industrial economy was a shambles in the '30s. Today, it is coming off a global boom."I've been asked many times whether we will have another Great Depression," said David M. Kennedy, a Stanford University history professor and the author of "Freedom From Fear," a Pulitzer Prize-winning history of the Depression and World War II. "My standard answer is that we won't have that one again. I'd be surprised to have one of that seriousness and duration. But that doesn't mean we wouldn't have a catastrophe we haven't seen before."Nothing demonstrates that as vividly as the Fed's orchestration of the takeover of Bear Stearns by JPMorgan Chase & Co. The deal staved off a possible bankruptcy, which the central bank feared might traumatize financial systems worldwide.The resolution drew a stark contrast with the Fed's role in the 1930 collapse of the Bank of the United States, a New York institution largely serving Jewish immigrants. The failure was then the largest in U.S. history, and the Fed's inability to arrange a rescue by Wall Street banks, including J.P. Morgan & Co., the predecessor to the "white knight" in the Bear Stearns case, caused a cataclysmic loss of confidence in the entire national banking system. That fueled a panic that historians regard as a key cause of the Depression.The Fed's relative powerlessness in 1930 led directly to New Deal reforms that vastly expanded its authority. Some of the agency's new powers, such as its ability to lend directly to brokers and investment banks, were seldom or never used until the current crisis.
Fed Chairman Ben Bernanke, an expert in the central bank's Depression-era history, is also knowledgeable about the instruments at its disposal in a crisis.In a 2002 speech, when he was a member of the central bank's board of governors under Alan Greenspan, he outlined a number of drastic steps the Fed could take in extreme conditions and still remain within its legal authority.Among them were buying up foreign government debt to influence dollar exchange rates, and even lending, if indirectly, against private assets.
The subject of Bernanke's speech was how to combat deflation, a broad decline in consumer prices that is not currently a problem on the Fed's agenda. Still, the powers he described could apply in a wide range of dire scenarios.
There are also limits to what monetary policy, the Fed's responsibility, can achieve on its own to forestall a drastic economic downturn. The Franklin D. Roosevelt administration not only reformed the Fed but also experimented with stimulative fiscal policy, such as unemployment relief.
New Deal programs aimed at staving off a wave of home foreclosures might be especially relevant today. Among the most important was the Home Owners Loan Corp., or HOLC, which is one of several models for homeowner relief being considered by Congress.HOLC took over 1 million mortgages in default starting in 1933, worked to keep the owners in their homes and made new loans to strapped mortgage holders. When the agency was finally liquidated in 1951, it even returned a small profit to the U.S. Treasury.
My View:
If 1 million houses default were there in 1930's, while comparing the population, then in 1930's and now in 2008 in USA......then we can assume that 10 lacs housing loan defaults can be considered very very big.....While we compare this with the recent housing default crisis, it seems to me very very less then what happened in 1930's.
Hence I feel what Shankar Shrama spoke about the 1929 type scenario again visiting looks pity difficult to arrive....
I think Ben Branake is the BEST person at the helm of affairs and I am confident he will be able to aver the recession situation and bringing the US economy to a Slow down or on the brink of a longterm slow down.....I think US market should rally from the second half....means from June onwards.......
Friends,
This is not the time to SELL.....Maybe a little bit down from here, but atleast not the time to sell.
There is no use to sell at 50-60-70% down prices.
Uptill now, if one has not sold anything , then it is no use in selling now at 60% down prices.
Actually , I think it is time to buy stocks in staggered manner.
Buy 10-15% of what you wanted to buy, if the stocks are looking fundamentally great one can even buy more in percentage terms.
India Glycols, SKS Logistic,SBTL,XL Tele, Gremach Infra,Time Techno,JMC Project,Ispat Ind,Ril Infra , Ril Petro and many A gr stocks are looking great.
A gr stocks will be the forerunner in next rally as they have been also battered in this carnage along with Cash gr stocks.....hence when a blue chip is available at 50% discount why one will go for a underdeveloped stocks like SKS Logistic,SBTL etc......
I am not saying that Cash gr stocks which we have discussed here are bad, but they will take time to go up and that maybe a year or more from here........
Hence I would suggest to start buying from hereon in a staggered manner.....instead of selling...
This is not the time to SELL.....Maybe a little bit down from here, but atleast not the time to sell.
There is no use to sell at 50-60-70% down prices.
Uptill now, if one has not sold anything , then it is no use in selling now at 60% down prices.
Actually , I think it is time to buy stocks in staggered manner.
Buy 10-15% of what you wanted to buy, if the stocks are looking fundamentally great one can even buy more in percentage terms.
India Glycols, SKS Logistic,SBTL,XL Tele, Gremach Infra,Time Techno,JMC Project,Ispat Ind,Ril Infra , Ril Petro and many A gr stocks are looking great.
A gr stocks will be the forerunner in next rally as they have been also battered in this carnage along with Cash gr stocks.....hence when a blue chip is available at 50% discount why one will go for a underdeveloped stocks like SKS Logistic,SBTL etc......
I am not saying that Cash gr stocks which we have discussed here are bad, but they will take time to go up and that maybe a year or more from here........
Hence I would suggest to start buying from hereon in a staggered manner.....instead of selling...
Saturday, March 22, 2008
Friends,
It seems you all have read what you not have to read, and have not read properply what you all have to read....in my last post here:
I have clearly written then under para with a special highlighting with BLUE colors...I am again pasting it here:
One thing is clear in my mind and that is if , When Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
I hope you all will try to read what these means..........
I will be back on market in due course of time.........with all reasons and jutifications......
But remember, what I have learned in my stay in Indian Market for last 23 yrs is that no one can time the market..............and if chartist are so sure about what is there in store then no one can loose in this market as , one has to just pay the fees to the chartist and you are always away of any trouble in Stock Market!Tell me is it so simple?I would like to ask all those who says they know charts..........Well, one or two successful example do not make Chart reading success...
It seems you all have read what you not have to read, and have not read properply what you all have to read....in my last post here:
I have clearly written then under para with a special highlighting with BLUE colors...I am again pasting it here:
One thing is clear in my mind and that is if , When Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
I hope you all will try to read what these means..........
I will be back on market in due course of time.........with all reasons and jutifications......
But remember, what I have learned in my stay in Indian Market for last 23 yrs is that no one can time the market..............and if chartist are so sure about what is there in store then no one can loose in this market as , one has to just pay the fees to the chartist and you are always away of any trouble in Stock Market!Tell me is it so simple?I would like to ask all those who says they know charts..........Well, one or two successful example do not make Chart reading success...
Friday, March 21, 2008
U.S has gone from 14000 to 12500.! we've slipped from 21000 to 15000...wonders which country is in recession!.
Friends,
Well, writing after a long time.
Readers asked me again for a fresh BUY list....but I refrained from doing it at that time as I was seeing more downside and that has happened ultimately.
Well,looking at the Indian Market,it seems that Indian economy is on a slow down or recession edge rather then US economy......Lol....The reason is , while Dow went up for twice for 400 points each in almost a week ,Sensex still went down and down......
--------------U.S has gone from 14000 to 12500.! we've slipped from 21000 to
15000..!! .........wonders' which country is IN RECESSION...!!?
Well, it was obvious that Dow went up because some steps were taken for the Financial Sector there and Ben gave more money to help mortgage crisis...and tried to let the Banks come out from mortgage crisis.....and on the back of that Dow moved up twice over 400 points......but Sensex didn't exhibit the positive of Dow......
It means that either
1)The pessimism is so large that no one is still ready to take a call on Indian market and are waiting for more positives...or
2)The bears are trying to break the market without looking at the prices.....with the help of some FII's and with some insiders news of selling to come in face of , e.g.Bear Stern going Bankrupt.....as we all saw that Bear Stren sold Rs 1000 cr to make up the loss in US..
but the anamoly is, that didn't affect Dow to rise when measures were taken for Bear Stren debacle and Dow went up, while our market drifted lower and lower.Since last two days Dow is moving up......today also it is Dow is up by 233 points at 2.50 pm , just 10 min to go for closing bell,means Dow will end in Green....
One thing is clear in my mind and that is if , Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
Hence it can be derived from the above scenario that either Pessimism has surounded the Indian Market or Bear are over doing and in both circumstances , whenever the market will take above turn, it will be vicious......and Bear again will be slaughtered in a big way......
The breakdown of prices in Indian Market is taking place at a very low vol...hence whenever the buying will come ...it will react like a spring......
US economy is growing at 2-2.5% rate and is on edge of a slowdown or recession..while Indian Economy is moving at 9% growth and may slow down a bit to 8% or 7.5% ..but still it will remain No2 fastest growing economy in the world....
As I have written in the heading, is it the Indian Economy going in for recession or slow down or recession or US is still unanswerable.....
Well, One of my reader, Mr.Ahmed has claimed that he wrote about the down trend well in advance and he also pasted what he wrote in past...
I have written the word, "he claimed", because he has reiterated that what he wrote came out true and that too 3-4 times he ahs written this ......It means that from now onwards, Mr.Ahmed will write when will the market go up and how much will it go up and that too in how much time.....as he has also written that for 3 months we will be in a Bear Phase......
I salute the mastery of Mr.Ahmed ..........
I am glad to know that atleast one of my reader is a Master in predicting the course of market and I would request Mr.Ahmed to please guide us on the fututre course of the market, when one have to sell and when one has to buy.......so that none loose money in stock market.......I hope he will enlightened us here......as he is doing now writign about his prediction..........
Hence I would like to suggest my readers that please sell everything now, if they wants to follow Mr.Ahmed as 12300 is yet to come and hence still many water has to be flown before that....At sensex 12300 , I think still the prices will be atleast 30% down from now....and hence selling now and buying at 12300 will be a profitable trade.......
And , Last I would request Mr.Ahmed to write what he thinks about the market when it reaches 12300....I hope he will come out with some future projections , like how will be market from thereon and whether we will see the new high or not or are we going for more down side like , 9000 or will consolidate , whether Indai will be slowing down, or whether we will go in for a recession or what...for how many months will this take for the market to come up....and many how months market will consolidate etc etc........
I hope as Mr.Ahmed has written 3-4 times about his predictions coming true, he will also write what will happen next..............
Well, writing after a long time.
Readers asked me again for a fresh BUY list....but I refrained from doing it at that time as I was seeing more downside and that has happened ultimately.
Well,looking at the Indian Market,it seems that Indian economy is on a slow down or recession edge rather then US economy......Lol....The reason is , while Dow went up for twice for 400 points each in almost a week ,Sensex still went down and down......
--------------U.S has gone from 14000 to 12500.! we've slipped from 21000 to
15000..!! .........wonders' which country is IN RECESSION...!!?
Well, it was obvious that Dow went up because some steps were taken for the Financial Sector there and Ben gave more money to help mortgage crisis...and tried to let the Banks come out from mortgage crisis.....and on the back of that Dow moved up twice over 400 points......but Sensex didn't exhibit the positive of Dow......
It means that either
1)The pessimism is so large that no one is still ready to take a call on Indian market and are waiting for more positives...or
2)The bears are trying to break the market without looking at the prices.....with the help of some FII's and with some insiders news of selling to come in face of , e.g.Bear Stern going Bankrupt.....as we all saw that Bear Stren sold Rs 1000 cr to make up the loss in US..
but the anamoly is, that didn't affect Dow to rise when measures were taken for Bear Stren debacle and Dow went up, while our market drifted lower and lower.Since last two days Dow is moving up......today also it is Dow is up by 233 points at 2.50 pm , just 10 min to go for closing bell,means Dow will end in Green....
One thing is clear in my mind and that is if , Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
Hence it can be derived from the above scenario that either Pessimism has surounded the Indian Market or Bear are over doing and in both circumstances , whenever the market will take above turn, it will be vicious......and Bear again will be slaughtered in a big way......
The breakdown of prices in Indian Market is taking place at a very low vol...hence whenever the buying will come ...it will react like a spring......
US economy is growing at 2-2.5% rate and is on edge of a slowdown or recession..while Indian Economy is moving at 9% growth and may slow down a bit to 8% or 7.5% ..but still it will remain No2 fastest growing economy in the world....
As I have written in the heading, is it the Indian Economy going in for recession or slow down or recession or US is still unanswerable.....
Well, One of my reader, Mr.Ahmed has claimed that he wrote about the down trend well in advance and he also pasted what he wrote in past...
I have written the word, "he claimed", because he has reiterated that what he wrote came out true and that too 3-4 times he ahs written this ......It means that from now onwards, Mr.Ahmed will write when will the market go up and how much will it go up and that too in how much time.....as he has also written that for 3 months we will be in a Bear Phase......
I salute the mastery of Mr.Ahmed ..........
I am glad to know that atleast one of my reader is a Master in predicting the course of market and I would request Mr.Ahmed to please guide us on the fututre course of the market, when one have to sell and when one has to buy.......so that none loose money in stock market.......I hope he will enlightened us here......as he is doing now writign about his prediction..........
Hence I would like to suggest my readers that please sell everything now, if they wants to follow Mr.Ahmed as 12300 is yet to come and hence still many water has to be flown before that....At sensex 12300 , I think still the prices will be atleast 30% down from now....and hence selling now and buying at 12300 will be a profitable trade.......
And , Last I would request Mr.Ahmed to write what he thinks about the market when it reaches 12300....I hope he will come out with some future projections , like how will be market from thereon and whether we will see the new high or not or are we going for more down side like , 9000 or will consolidate , whether Indai will be slowing down, or whether we will go in for a recession or what...for how many months will this take for the market to come up....and many how months market will consolidate etc etc........
I hope as Mr.Ahmed has written 3-4 times about his predictions coming true, he will also write what will happen next..............
Saturday, March 8, 2008
Again.......
Friends,
I again caution to all of you that please refrain from buying anything in market untill March end...Just become passive.......and see what market is doing and where it is going.....
No need to panic as well.This is part and parcel of stock market.....Sunny days are here to come.....but wait for that.....
I again caution to all of you that please refrain from buying anything in market untill March end...Just become passive.......and see what market is doing and where it is going.....
No need to panic as well.This is part and parcel of stock market.....Sunny days are here to come.....but wait for that.....
Wednesday, March 5, 2008
A point to be discussed.......
BUFFETT: I would tell people if they worry what the market does on any given day, they shouldn't be buying stocks.
Dear Rajeevbhai,
Please throw light on one development, which i am not able to justify. Till Jan 15th, the all stock mkts, Crude, Gold, Non ferrous Metal, steel (Each comodities) were almost rising togather.The US slow down, sub-prime issue were here since last August but our stock morket was enjoying bull ride with all the comodities till mid Jan. They all were ignoring above issues.But from Feb onwards, surprisingly, all comodities are near to their all time high prices (Gold, Crude, Copper, ALuminum & few Agro products) but our stock mkt is on reverse trend. Globally, the volume of stockmarket is very less compared to the volume of Comodity Mkt. Why did stock mkt started to move in oposite direction to major comodities and all news media, brokers, etc are making hype of Slow down?Please make me understand.Regards,
Well Friends,
I have been asked the following questions and I thought it to write the answer on the main page as I thought many readers may not see my answers at Comment section....but I suggest all my readers to see all comments and my replies religiously.There will always be some thing to read.I am sure about it.
Ok now coming back to the answer which Mr.Dinesh asked.....
Why till Jan 15 Stock Market an Commodities Market ran up and up hand in hand and now Stock Markets are tanking and not Commodities?
Well,one thing one has to understand the difference between Commodities Market and Stock Market. Stock Market is driven by sentiments while Commodities is driven by REAL DEMAND.....Demand coming from the consumer.Viz:Industries using Iron Ore,Copper, Coal, Silver, Uranium, Manganese Ores etc etc.....and daily consuming commodities with the people ,needs in general, like Wheat,Sugar,Oil & Gas,different types of grains etc etc....and these demands are constantly increasing world over and hence commodities will still go up.....but maybe not Stock Market....as we can say.. for eating Wheat and grains are a must and one has to buy them ,while if one do not buy Shares in stock market for years togather ,it will do....because the first priority is livelyhood.If we are not living then what the hell to do with the shares!
That is the reason lately since last Aug , Warren Buffet is buying an ailing company shares , Kraft Foods Inc, a food co....as he knows that people will have to buy food to LIVE!as he is sure about the turnaround of it.....
Well,the reason for the price rise for commodities are actually ,world is not able to produce commodities in enough amount to feed the world increasing populations and there are many reasons for that....that I will discuss another time...But I will simply put in this way that, It is a Vicious Circle....that has no end....
Hence the decoupling we are seeing between Stock market and Commodities Market....we will still see Commodities going up and up and Stock Market will be down in dumps and they may remian for more time......
Well, coming to the second point Dinesh has showed...that the subprime issue and USA Slow down were there from Aug then why stock market went up to Jan?
Well, the reason behind this is ....in Aug players were not sure how much the damage was...they thought it can be few billions dollars ....and US economy is resilent to any major drawbacks of Subprime issue...but as the things started unfolding and major loss making and writing off news started to pour in the Fund Manager started panic unwinding in Emerging Markets , where they have made money,to make up the loss in US subprime.....and the selling came in heavy which our market were not able to take and hence the strong reactions we saw in Jan and even now.....
The risk aversion view grew up and people started taking the money off from the MF's to invest in more secured Investment like bonds etc.
The Master , Warren Buffet just said that , he feels that US is already in recession and there is no need for the technical indicator to visulize whether the recession is there or not.....
So, Stock market is all about Sentiment and hence as soon as the sentiment get bad people tends to sell either to capitalize whatever profit he is having or trying to trim down the loss how mcuh he can.....When people wants to sells , it is everyone who wants to sell......adn hence we see sellers curcuits and when one wants to buy everone wants to buy and hence we see buyers circuits.....that is called Herd mentality......and market is always driven by this and those to thinks different from that makes a Fortune.............
I hope I have given enough reasons to reply the question.I may have missed one to two more .Let me see and if I can recall I will add it here.....
Dear Rajeevbhai,
Please throw light on one development, which i am not able to justify. Till Jan 15th, the all stock mkts, Crude, Gold, Non ferrous Metal, steel (Each comodities) were almost rising togather.The US slow down, sub-prime issue were here since last August but our stock morket was enjoying bull ride with all the comodities till mid Jan. They all were ignoring above issues.But from Feb onwards, surprisingly, all comodities are near to their all time high prices (Gold, Crude, Copper, ALuminum & few Agro products) but our stock mkt is on reverse trend. Globally, the volume of stockmarket is very less compared to the volume of Comodity Mkt. Why did stock mkt started to move in oposite direction to major comodities and all news media, brokers, etc are making hype of Slow down?Please make me understand.Regards,
Well Friends,
I have been asked the following questions and I thought it to write the answer on the main page as I thought many readers may not see my answers at Comment section....but I suggest all my readers to see all comments and my replies religiously.There will always be some thing to read.I am sure about it.
Ok now coming back to the answer which Mr.Dinesh asked.....
Why till Jan 15 Stock Market an Commodities Market ran up and up hand in hand and now Stock Markets are tanking and not Commodities?
Well,one thing one has to understand the difference between Commodities Market and Stock Market. Stock Market is driven by sentiments while Commodities is driven by REAL DEMAND.....Demand coming from the consumer.Viz:Industries using Iron Ore,Copper, Coal, Silver, Uranium, Manganese Ores etc etc.....and daily consuming commodities with the people ,needs in general, like Wheat,Sugar,Oil & Gas,different types of grains etc etc....and these demands are constantly increasing world over and hence commodities will still go up.....but maybe not Stock Market....as we can say.. for eating Wheat and grains are a must and one has to buy them ,while if one do not buy Shares in stock market for years togather ,it will do....because the first priority is livelyhood.If we are not living then what the hell to do with the shares!
That is the reason lately since last Aug , Warren Buffet is buying an ailing company shares , Kraft Foods Inc, a food co....as he knows that people will have to buy food to LIVE!as he is sure about the turnaround of it.....
Well,the reason for the price rise for commodities are actually ,world is not able to produce commodities in enough amount to feed the world increasing populations and there are many reasons for that....that I will discuss another time...But I will simply put in this way that, It is a Vicious Circle....that has no end....
Hence the decoupling we are seeing between Stock market and Commodities Market....we will still see Commodities going up and up and Stock Market will be down in dumps and they may remian for more time......
Well, coming to the second point Dinesh has showed...that the subprime issue and USA Slow down were there from Aug then why stock market went up to Jan?
Well, the reason behind this is ....in Aug players were not sure how much the damage was...they thought it can be few billions dollars ....and US economy is resilent to any major drawbacks of Subprime issue...but as the things started unfolding and major loss making and writing off news started to pour in the Fund Manager started panic unwinding in Emerging Markets , where they have made money,to make up the loss in US subprime.....and the selling came in heavy which our market were not able to take and hence the strong reactions we saw in Jan and even now.....
The risk aversion view grew up and people started taking the money off from the MF's to invest in more secured Investment like bonds etc.
The Master , Warren Buffet just said that , he feels that US is already in recession and there is no need for the technical indicator to visulize whether the recession is there or not.....
So, Stock market is all about Sentiment and hence as soon as the sentiment get bad people tends to sell either to capitalize whatever profit he is having or trying to trim down the loss how mcuh he can.....When people wants to sells , it is everyone who wants to sell......adn hence we see sellers curcuits and when one wants to buy everone wants to buy and hence we see buyers circuits.....that is called Herd mentality......and market is always driven by this and those to thinks different from that makes a Fortune.............
I hope I have given enough reasons to reply the question.I may have missed one to two more .Let me see and if I can recall I will add it here.....
Monday, March 3, 2008
Don't buy anything now................
Friends,
I suggest everyone not to buy anything now.Market is looking weak atleast for the month of March.Let March pass by....
WE can see lower levels ..........and may test even 14000-14500...
Hence refrain from buying anything......
Best Luck.....If anyone having position in F&O please sell it.....
And last...I may prove wrong......take your own call.....
Rajeev
I suggest everyone not to buy anything now.Market is looking weak atleast for the month of March.Let March pass by....
WE can see lower levels ..........and may test even 14000-14500...
Hence refrain from buying anything......
Best Luck.....If anyone having position in F&O please sell it.....
And last...I may prove wrong......take your own call.....
Rajeev
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