General Trading Chat

AJK

Well-Known Member


i'm not against shorting and making money. investors also do it as hedge. but my view is govts cannot let the unnecessary falling beyond a limit if the current scenario continues. they may take counter measures including banning shorts or even halting trading. in my humble opinion, playing with FnO is okay, but remaining equity values should be protected... imagine all the companies around the world start to lay off amid this already ongoing crisis. i'm just thinking.. call me a critic if you want, there were many before.

my thought is why to let it go out of hand into a recession? why not intervene before that and protect? is that possible? debatable..

to read:
Economic scarringThe long-term impacts of the recession
https://www.epi.org/publication/bp243/
 


i'm not against shorting and making money. investors also do it as hedge. but my view is govts cannot let the unnecessary falling beyond a limit if the current scenario continues. they may take counter measures including banning shorts or even halting trading. in my humble opinion, playing with FnO is okay, but remaining equity values should be protected... imagine all the companies around the world start to lay off amid this already ongoing crisis. i'm just thinking.. call me a critic if you want, there were many before.

my thought is why to let it go out of hand into a recession? why not intervene before that and protect? is that possible? debatable..

to read:
Economic scarringThe long-term impacts of the recession
https://www.epi.org/publication/bp243/
In my opinions, it defeats the very purpose of stock market. Markets play the critical role of price discovery,
one cannot pick only the good side while rejecting the down side that comes with it. Putting Long Only conidtions on investors/traders or banning short sellers-If something is worth/devalued currently, propping it artificially/interfering doesn't change it's value.

Think of this analogy- a person is totally drunk-next is he has to sleep, go unconscious for a while-get a hangover before he gets over. Or you can make the drunk person not fall asleep, in fact push him to exercise so that he stays awake. What do you think, happens and which is dangerous?

Simply put, if governments start interfering, why even have price discovery/stock market- the government could publish the index data like a economic metric every month or a week like the CPI-IIP etc...
 

AJK

Well-Known Member
In my opinions, it defeats the very purpose of stock market. Markets play the critical role of price discovery,
one cannot pick only the good side while rejecting the down side that comes with it. Putting Long Only conidtions on investors/traders or banning short sellers-If something is worth/devalued currently, propping it artificially/interfering doesn't change it's value.

Think of this analogy- a person is totally drunk-next is he has to sleep, go unconscious for a while-get a hangover before he gets over. Or you can make the drunk person not fall asleep, in fact push him to exercise so that he stays awake. What do you think, happens and which is dangerous?

Simply put, if governments start interfering, why even have price discovery/stock market- the government could publish the index data like a economic metric every month or a week like the CPI-IIP etc...
You are right, let it find its own level and settle... We can't close the market for the entire 14 months for the vaccine to be up. I said it's "debatable".. the whole market also work by debating on the valuation. Let's just say now we all know the possible implications, and can better deal them and survive this situation.
 

siddhant4u

Well-Unknown Member
how to know shorting is not done to bring whole of market to right valuation? for example Nifty was trading at all time high PE for last 12 months and ideally should correct to 8k-7.5k level

another example is Hdfc Bank .. mostly banks trade at 0.5 to 1 x book value, but Hdfcbank trades at 4-5 times book value. Now most of Indians have bank account and new customer growth is not going to be as phenomenal as earlier. Plus there is no technological edge or customer service edge with hdfcbank anymore as other private banks also offer latest technology and mobile payments. however unstable indian banking system will see many moving their existing account from small private banks to hdfc bank, but more of these will flow to govt banks. Now the traders could think like above example and start shorting Nifty and banks..... to get it to more reasonable
 

AJK

Well-Known Member
My father's first mobile was a Reliance CDMA. It was best at the time and had reception better than even BSNL at some places due to its technology. Look at where it is now after 2008. Nobody know in which air did its valuation vanished, let alone the fate of its employees.. Economists and traders would only see numbers and short-forms like PE etc. The real happening would be out there among the common people, the real aftereffects, for which these same economist would then be blaming on govts for various reasons... weirder than a virus world i'd say..
 

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