19 May 2006 !!!

#1
Friends,

We are living in an era where access to information is no longer a competitive advantage. If everyone feels that economy will do well, the market will discount it immediately by rallying 100s of points; and the same way, if everyone feels inflation is a threat and FIIs can slow down, the market will discount it by falling 100s of points instantly. I fail to understand how people think that there will be orderly correction, and market will slowly come down. Orderly correction happens only where there is lack of information. In todays environment, there is always plenty of news which market has to digest on daily basis. We are in a period of Instant Price Discovery. Volatility is manifestation of this process.

"In the short run, the market is a voting machine but in long run, the market is a weighing machine." (Benjamin Graham)

Its difficult to predict the outcome today about who will win today bulls or bears Its too close to call.

-ves:

* US economy Will it slow down as predicted?
* US trade deficit and dollar weakness
* Infrastructure constraints in Indian economy
* Rising Crude Prices and Indian current account deficit
* Weatherman prediction and Arrival of Monsoon. How accurate is the prediction?
* How long the Government can sustain without meaningful reforms on policy fronts. Its a fight between investors patience and government inaction. Lets see who gives up first.

+ves:

* Indian economy has a strong momentum
* Indian middle class is becoming a heck of hungry consumer buying stuff and buying on credit too.

cheers,
nkpanjiyar
 
#2
Dear Friend,

A bubble long due to burst happened. The longer it lasted the longer the painful downtrend will be.

If it had carried more, the fall would have been worse.

Enjoy the downride while it lasts.

Regards
 
#3
nkpanjiyar said:
Friends,

We are living in an era where access to information is no longer a competitive advantage. If everyone feels that economy will do well, the market will discount it immediately by rallying 100s of points; and the same way, if everyone feels inflation is a threat and FIIs can slow down, the market will discount it by falling 100s of points instantly. I fail to understand how people think that there will be orderly correction, and market will slowly come down. Orderly correction happens only where there is lack of information. In todays environment, there is always plenty of news which market has to digest on daily basis. We are in a period of Instant Price Discovery. Volatility is manifestation of this process.

"In the short run, the market is a voting machine but in long run, the market is a weighing machine." (Benjamin Graham)

Its difficult to predict the outcome today about who will win today bulls or bears Its too close to call.

-ves:

* US economy Will it slow down as predicted?
* US trade deficit and dollar weakness
* Infrastructure constraints in Indian economy
* Rising Crude Prices and Indian current account deficit
* Weatherman prediction and Arrival of Monsoon. How accurate is the prediction?
* How long the Government can sustain without meaningful reforms on policy fronts. Its a fight between investors patience and government inaction. Lets see who gives up first.

+ves:

* Indian economy has a strong momentum
* Indian middle class is becoming a heck of hungry consumer buying stuff and buying on credit too.

cheers,
nkpanjiyar
Very nice NK,as always looking fwd to your posts from a macroecon perspective.

Saint
 
#4
Friends,
As market masters explain heated markets need ventilation. After the huge correction and small people becoming fodder for big speculators, the tension in the market is released and market will slowly return to its equilibrium.
As Mandelbrot says Markets dont go by baby steps , they follow jumps
 
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