The Share Market Bull Run Infection

The Bull Run InfectionEvery few days, newspaper frontpages announce the Sensex’s march past another milestone, 10000, 15000, 20000 and so on. You have photos of brokers jumping for joy and quotes from experts. Business channel hosts are all smiles and it feels like it’s already Diwali. Media portrays the event as a big win for India.

Why the markets surge when nothing seems to have changed or why they crash suddenly is beyond the understanding of every expert, let alone a layman like me. There’s always some exotic reason put forward, like change in interest rates in Timbuktoo. However the fact is that no one knows. If the experts knew, wouldn’t they be making millions and then relaxing on a private island rather than giving tips on TV all day?

Most young professionals today are dabbling in stocks. In many companies, share trading portals are used more often by the employees than websites about the company’s business.

Who doesn’t want to make a quick buck? It is human nature to bet and bid and want luck to do the trick rather than ability. Lottery, gambling, and horse racing have always been around but the share markets now seem to have emerged as a more dignified form of gambling for the educated. A young educated IT professional wouldn’t be caught dead at a lottery shop but will blow lakhs on hunches, guesses and tips about some stock.

A few years back, like everybody around me, I too registered on ICICIDirect hoping to outsmart the masses and make fortunes from nowhere. I did make money, as making money has been a fairly brainless activity over the past few years. Almost all share prices have just keep rising all the time. It would however be stupid of me to start thinking of myself as a banking or petrochemicals business expert only because those stocks made me money. Even my 2 year old nephew was just as likely to make that much money.

So is it just luck that I am to rely upon to get me returns? Is this just gambling in an acceptable avatar? There is some skill involved in picking a stock, but then even gambling and horse racing requires skill with cards and horses respectively. Yet these forms of making money are by and large considered improper for ordinary citizens as cards and horses cannot be the primary skill of the common man.

It’s an ethical question for the individual investor and not for mega businesses or the stock markets. Also should someone spend time tracking stocks of businesses where he has no say or should he invest that time and energy into his own business or profession? A number of software professionals I know, spend more time tracking the markets than they spend in upgrading their core business skills or their knowledge of software and technology.

Strangely governments seem to want people to play with stocks and money. The government says that to save tax, buy certain kinds of funds, take loans and what not. The finance minister also regularly offers share market advice to the people. Share trading seems to have become an addiction. Like people in casinos keep playing till they lose, share market investors never stop. I find share markets even riskier than casinos as with a slot machine, you know for sure that it is just luck. In the share market you like to think that it is skill and expertise that is making you money when in reality, it is still primarily luck.

If tomorrow someone asks me to lend them a 1000 rupees at a certain rate of interest for a new technology business, I would probably consider the proposal as not only do I have some understanding of the business but I can also judge if the business can perform well enough for them to pay me the promised sum. However I certainly will not lend, if someone asks for money to start a new oil refinery, give no guarantees for even the capital but just tells me that for some reason my money might suddenly double one day.

I am not questioning the need, working or the use of the markets. I am also certain that the stock markets can make a person a lot of money. I am questioning the over the top interest from individual investors. Shouldn’t we be focusing on our areas of competence rather than joining the hordes and hoping that luck will make us rich.
(Published as “The Bull Run Infection” in my fortnightly column for the Maharashtra Herald)

  • VIVEK MANCHANDA

    As now Indian economy is showing some kinds of positive numbers and growth of GDP projected nearly 6.7% because of that Indian Market recovered nearly 100% from their Oct’2008 low.Also in all over globe every market showed smart recovery.Dow Jones ,Hangshang,Nikkei, and other market also recovered from their lower bottom made in Oct’08.But in Indian Market there are many technical analyst (I’ll say all of them Idiots,Bastered and foolish) were saying that Sensex will go below 6000 Level and Nifty may go below 1800 level and it would not be possible for Sensex to cross 10000 mark before Dec’2010 and 15000 in next 5 years.Now all these idiots and bastered started barking and saying Sensex will make a new high before Dec’2009 or Mar’2010.I want to appeal all the Indians never trust and listen these id iots advise because they are saying according to the trend trust on your knowledge your advisor. First Global’s CEO Shankar Sharma was the first person who said inSept’2007 that in year 2008 Sensex will cross 25000 mark and when the correction happened because of global meltdown and Sensex touched its lowest in Oct’2008 then he was saying that Sensex will never touch 21000 mark at least up to year 2020.Sudarshan sukhani other technical idiot (who actually doesn’t know any thing about the market),Gul and Tulsian,Ambrish Baliga,Hariharan,Simi Bhaumik,Ashwani Gujral ever body said that Sensex will never cross 12000 mark in Yaer 2009 and nifty will not go above 3200 mark in year 2009.Ashawbi Gujral,Sukhani everbody was saying when Reliance Industries was down and at Rs. 1100 that it will go below 700 and L&T will go below 500.Now all these bastered are saying that fundamkental are strong and Sensex may hit a new high very soon.
    Why we people give importance to these idiots who are only cheating and making fool.Always listen your own heart and do what your mind say.
    VIVEK MANCHANDA
    LUCKNOW
    vivek.lkw@gmail.com

  • VIVEK MANCHANDA

    As now Indian economy is showing some kinds of positive numbers and growth of GDP projected nearly 6.7% because of that Indian Market recovered nearly 100% from their Oct’2008 low.Also in all over globe every market showed smart recovery.Dow Jones ,Hangshang,Nikkei, and other market also recovered from their lower bottom made in Oct’08.But in Indian Market there are many technical analyst (I’ll say all of them Idiots,Bastered and foolish) were saying that Sensex will go below 6000 Level and Nifty may go below 1800 level and it would not be possible for Sensex to cross 10000 mark before Dec’2010 and 15000 in next 5 years.Now all these idiots and bastered started barking and saying Sensex will make a new high before Dec’2009 or Mar’2010.I want to appeal all the Indians never trust and listen these id iots advise because they are saying according to the trend trust on your knowledge your advisor. First Global’s CEO Shankar Sharma was the first person who said inSept’2007 that in year 2008 Sensex will cross 25000 mark and when the correction happened because of global meltdown and Sensex touched its lowest in Oct’2008 then he was saying that Sensex will never touch 21000 mark at least up to year 2020.Sudarshan sukhani other technical idiot (who actually doesn’t know any thing about the market),Gul and Tulsian,Ambrish Baliga,Hariharan,Simi Bhaumik,Ashwani Gujral ever body said that Sensex will never cross 12000 mark in Yaer 2009 and nifty will not go above 3200 mark in year 2009.Ashawbi Gujral,Sukhani everbody was saying when Reliance Industries was down and at Rs. 1100 that it will go below 700 and L&T will go below 500.Now all these bastered are saying that fundamkental are strong and Sensex may hit a new high very soon.
    Why we people give importance to these idiots who are only cheating and making fool.Always listen your own heart and do what your mind say.
    VIVEK MANCHANDA
    LUCKNOW
    vivek.lkw@gmail.com

  • Vivek Lkw

    There is nothing for the retail investors in equity market.Its the only place for FII and traders.No body was expecting that the start of 2011 would be so bad for the indian market.Where every market going positive and Dow is above 12000 but our market making daily new level.Nifty’s strong support zone 5500 was already broken and touched a new 8 month low of 5196.within 45 days 80% stocks are below 52 week low and every day making new low.whats happening? nobody knows.But its very dangerous for the retail investors who already stuck in the market and they don’t have any other alternatives with them.Every day market falls because the fear of scams,inflation and interest rate.So where should we invest.

    Vivek Manchanda
    vivek.lkw@gmail.com

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