I’ve always had one doubt, why are not self proclaimed ‘share guru’, ‘stock market expert’ among the richest persons?
If you are a regular viewer of business news channels, you see they call some analysts or experts to inform (Read: influence) viewers what markets are likely to do or what they make out of the current condition of an index or present condition of an economy of a country. My experience is when the markets are ready for an up-move, most of the noise media provide is negative. And when markets are gonna tank, we often read/hear how an economy is strong. Remember how people were saying “Sensex is gonna touch 25000” in December 2007 or “We are in deep recession and it will take some years to recover” in Feb-Mar 2009. If you hear what these analysts say and think, many times they do not make sense.
Most of the analysts use most of these phrases often when they are asked their views on the market or on particular scrip:
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- “Buy on dips” - Now how will I know the price at which I am buying is a dip or middle-point? And even if I buy at ‘dip’ what is the guarantee it’ll not make a new ‘dip’ (low)
- “Markets are down because of profit booking” (in an uptrend) – Mr. Expert, why do we need you to tell us this? Obviously people sell shares when they want to book profit or when they feel prices won’t move up.
- “Markets are up because of short covering” (in a downtrend) – Same as above
- “In long term, I am optimistic about the economy” - You know people are gonna forget within one month what you said today. If we enter biggest recession ever in next two years, who’s gonna question you?
- “Market is likely to remain in a (any price) – b (any other higher price) range for the next n months (where n = 1,2,… )” – WTF!!! Even I can say Nifty will remain in 2000 – 8000 range for next 6 months. This is a pointless statement. No investor can do anything on this information (Read: view)
- “Keep a stop loss of a and go long/short for the target of b” – Being a student of technical analysis and a trader, I know keeping a stop loss is important when you are trading. This statement is not at all pointless :P But somehow I feel it is. :) If one keeps stop-loss and takes some position (long/short), eventually one of the two things is gonna happen. Either the stop-loss will get hit or the price target will get hit.
- “It would be prudent to pick right stocks in this market condition” or “It’s a stock pickers’ market” – Huh!! It always is. Everyday some stocks are up and some stocks are down.
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