Thursday, November 26, 2009

Bearish Market- How can it exist

Though I have been out of touch for the last 5 years, my feeble interest in stock markets keeps me not to forget finance and capital markets completely. Whenever I listen to CNBC or NDTV or look at nay recommendation from any of my able friends, One question always bamboozle me.

How can you have a bearish outlook towards any stock or market in particular.

Let me start with an example:

Analysts say buy stock x at price 120 with target of 170. As soon as you reach 170, sell it and get out of that stock.

Why should I?? If I sell at 170, there has to be someone buying at 170..Right. So who is buying at 170 when everyone believes that now stock is expected to go down.


Similarly sometime back during so called recession, the market was at 11000 points. people say that we are still in bearish market but then why do not Sensex falls immediately to 0. Because there are people buying at 11000 points.

Now from a logical perspective. people are long on Stocks or any other asset always. We have more people owning a house right now than who are short and have sold houses. Same for any other asset you can think of.

So expectation from a large segment of people is that prices would always increase of assets. That is why they continue buying/ holding them to sell in future for their financial need. Then second person buys it and holds it as per his financial planning

So, Now can anyone answer

The purpose of stop loss and Profit booking concept if you are not a day trader.

Tuesday, November 3, 2009

What basket ball did to west indies cricket, T-20 is going to do to world cricket...God Save my favourite game

Is 20-20 would kill test cricket and one day cricket.

Why let us understand the demise of West Indies Cricket because of basketball.


The game was short, had a lot more money, fame, instant success, attractive, people loved it more...more kids took up basketball.... cricket was left for left overs.... And all the malcolm marshalls and curtly ambroses of the Carribean today are sweating it out on the basket ball courts leaving the cricket fields for B-rung players.

Now, Similarly we haev started seeing players fringing injuries to avoid longer version games. No one is desperate to play for national side, they are more bothered to be for for IPL and recently launched champions league.

So what this would lead to

The face of cricket would totally change just like the face of west indies cricket has changed.....test cricket and 50 overs cricket will lose their importance.....Afridis would be bigger stars than Dravids.... Lot more money would come in... Entertainment top class, Yuvraj hitting six sixes in an over.... but we would no longer see laxman ... and dravid fighting out the aussies the whole day, Kumble taking all ten wickets..... and just like the carribeans may come up with a gayle or a sarwan... but not a richards, ambrose or marshall..... A Deccan Chargers could be a more popular team than Indian Cricket team.... like LA Lakers is more popular than USA basket ball team or Manchester United is more popular than England football team.... etc etc.... not debating on whether its good or bad.... but this is how i see the future of cricket...

Now, this would make sure there are no cover drives on the carpet, you are encouraged to play lofted shots. Bowlers need not work a batsman out as a bowler only have 4 overs and a batsman scoring 25 of 15 balls is a class batsman.