Day Trading Stocks & Futures

*Brewing Troubles For Vedanta?*

Bond Markets, worldwide, is the largest market in terms of Investment value. Bond market is also considered more matured and less volatile compared to Equity Markets.

If there is a smoke in bond markets, major fire cannot be ruled out and history has proved it time and again.

Vedanta bond has already turned to JUNK status and lost more than 30% in value. Is it a Smoke of a Fire???

Recently the Government of India, also opposed Vendanta's offer to acquire govt stake for about $ 3B in Hindustan Zinc.

There is also a chatter in the bond markets about doubts in repaying capacity for redemption of bonds up to about $14B starting from 2023 upto 2026.

Vedanta stock has also lost about 40% from its peak that is about 40K Crores in market capitalisation.

Will Vedanta also engulfed in Fire?

Time will say, but keep watch on any developments.
 

apegaonkar9

Well-Known Member
*What is the Decoy Effect? Link this in Stock Markets and Personal life.
*
The decoy effect describes how, when we are choosing between two alternatives, the addition of a third, less attractive option (the decoy) can influence our perception of the original two choices.

Decoys are completely inferior to one option (the target) but only partially inferior to the other (the competitor).

Let's say like me, you are an ice cream lover.
One fine day, you are out to treat yourself. Shopkeeper provides you below options:

One Scoop Ice Cream: Rs 13
Two Scoop Ice Cream: Rs 22
Three Scoop Ice Cream: Rs 25

The negligible difference between the prices of 2nd and 3rd options gets your attention.
This is called Decoy Effect.

A 2nd option is just a Decoy option. Companies provide decoy options so that customers can compare the Decoy option with an expensive option (and select the expensive one)

Decoys capitalize on loss aversion

As humans, we hate losing more than we like winning. Loss aversion describes how, for most people, it is more unpleasant to lose a given amount than it is pleasant to gain an equivalent sum. Exactly how we behave in stock markets also.

The decoy effect is made all the more pernicious by the fact that we do not realize we are being manipulated, instead feeling like we are making the logical choice.

Don't let the Decoy effect play your investment decisions in markets also in our personal life.
 

travi

Well-Known Member
*What is the Decoy Effect? Link this in Stock Markets and Personal life.
*
The decoy effect describes how, when we are choosing between two alternatives, the addition of a third, less attractive option (the decoy) can influence our perception of the original two choices.

Decoys are completely inferior to one option (the target) but only partially inferior to the other (the competitor).

Let's say like me, you are an ice cream lover.
One fine day, you are out to treat yourself. Shopkeeper provides you below options:

One Scoop Ice Cream: Rs 13
Two Scoop Ice Cream: Rs 22
Three Scoop Ice Cream: Rs 25

The negligible difference between the prices of 2nd and 3rd options gets your attention.
This is called Decoy Effect.

A 2nd option is just a Decoy option. Companies provide decoy options so that customers can compare the Decoy option with an expensive option (and select the expensive one)

Decoys capitalize on loss aversion

As humans, we hate losing more than we like winning. Loss aversion describes how, for most people, it is more unpleasant to lose a given amount than it is pleasant to gain an equivalent sum. Exactly how we behave in stock markets also.

The decoy effect is made all the more pernicious by the fact that we do not realize we are being manipulated, instead feeling like we are making the logical choice.

Don't let the Decoy effect play your investment decisions in markets also in our personal life.
The question is "what does the shopkeeper want to sell ?"

Seems like he is giving 2+1 scheme.
 
If you are two people with each wanting a scoop each beforehand, you might be better choosing option 2.
The problem arises if you get tricked into buying more (3) of what you didn't already need.

Also, depends on the item. If it's washing machine liquid, I will choose option 3 even if I had planned on buying 2.
If it's ice-cream, I will stick to option 2, even if 3 is more attractive.
 

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