Tuesday, January 22, 2008

Bloodbath

This is my third post about stock market and by this time I seem to have controlled my greed for quick and fast money. Not because of my self control but the tiny portfolio itself is about to be wiped out. Same is the case with most of my friends. One of my friends has taken the carnage very sportingly.

During the upswing, he had planned a rich trip to Goa because of hefty profits he had earned. Slowly it started going down. At an overall loss of 2,000 he said, “Yaar ek cycle aa jati itne mein”. Slowly as it started increasing and reached the overall loss of 25,000, he said “I have just lost a scooter”. Next day at a loss of 80,000 he was saying “Yaar, I would have bought a Bajaj Pulsar”. Today, with the market hitting the 10% circuit, the bike had turned into a Tata Nano and once a rich guy is eying a 1 bhk flat in Delhi now. He had planned his honeymoon to Mauritius which might well be turned to Haridwar.

Its been so fast that even T20 seems to be boring. Few instances of rediff market commentary -

11:15 AM - One cannot say that the final bottom for the market has been seen yet, says Sushil Kedia, of K&A Securities, on CNBC-TV18. But if the market has fallen like a rock, it can go up like a rocket, he adds.

Fantastic, but that everyone knows. And if making this phenomenal statement makes some one a market expert, Bishan Singh Bedi would long have replaced Anil Kumble.

11:52 AM - If one cannot buy now, then at least hold on to your investments in equities, as fundamentals are still pretty strong, says Deven Choksey of KR Choksey Securities, on NDTV Profit. Most of the poison is out of the market now, he says. If you are invested in the debt market, you can switch to equities, as this is a good time to buy in this market now, he suggests.

As soon as the comment came, read below what happens.

11:55 AM - And the fall keeps getting worse! Margins calls have triggered again. Sensex is at 15,374, down 2,230 points from the previous close. It is the biggest intra-day fall for the Sensex ever. Nifty is at 4470, down 738. CNX Madcap index is down 16%, while the BSE Small cap index is down over 9%. NSE advance-decline ratio is at 1:75.

It kept fluctuating at alarming frequency with unimaginable lows being breached every time and the claimed “Support” at different levels touching lower nadirs.

People talk about technical analysis and fundamental strengths but in a market which is highly volatile, immature to some extent (not sure how you define maturity, I picked it from one of the expert’s comments) and driven by lots of inefficient factors, do they hold?

Such volatility could only be explained by behavioral finance to some extent where retailers are butchered in the hands of big bulls. Although analysis does reap you a few benefits but more often that does not match the expectations built during a ‘death or glory’ bull run. Key lies in doing all you can do and then pray for your tryst with lady luck.

Today, I bought a stock at 660 with quantity being 5 and as soon as I saw it 750, decided to sell. By the time I was discussing it with my same old friend it was down to 730 and I sold it. It got sold at 705 and I earned a profit of 225. Now my friend is asking me a loan of 100, logic – “Abey, honeymoon pe cold drink peene ka to paisa ho”.

3 comments:

Uptown Girl said...

Well... I was one of the lucky few who brought when market was down 1900 points... and as it turned out... I have actually managed to make money today! :P

Spiff said...

I wish i cud comment..but on principled reasons..am on strike

Sachin Gulhane said...

The last para is representative of sentiments of small inverstor in market ...
Congrats for making pity profit after loosing big amount.it;s a good sign .. you cant go down from here ..