Friday, November 13, 2009

Stockmarket - A Bag Of Gold Or ... fools' gold

Stretching Your Bets ...

Psychology

If stockmarket runs ahead of fundamentals, why do analysts need to update and rewrite their pieces?
Do analysts simply crystal-balling their write-ups, like soothesayers, or are they drowned in a sea of statistics?
Hard facts don't lie; selective application does.
What changes fast and furious is psychology, that is, how the mass react in a collective situation.

Many players want to make money but few do their homework; with most using their gumption to trade.

Recovery

The recovery and growth story will be dead as dodo if not for the deliberate, albeit noble, efforts by Governments the world over acting in unison to stamp the floodgates; its a choice between complete breakdown and economic chaos or a managed return to world order.

Will this last? Is the pocket so deep that the bottomless pit seems shallow by comparison?

Health & Nature

Most Governments can, and will, stand tall and back each other "dollar for dollar" to embrace a managed economic order but can the same be said if natural disasters or 'the Ten plagues' strike in unison? The wiseman said "If money can solve the problem, then its no more a problem"!

Hunger & Social

With rising commodities prices and shrinking arable lands, will hunger be a norm for the population at large?
Prices rise in commodities because of fear - the fear of shortages; prices improve in the stockmarket because of hope - the hope for better things to crystalize going forward.

A hungry man is an angry man. If a man is deprived of food or a chance to buy food, he will not act rationally; similarly the leader.

Conclusion

The stockmarket does not behave rationally but is a set of collective psychology. Is the current rise against expectation or stalling for a bigger dive? I don't know!

My bets are off the table. Selling into strength is my prefered choice; to all who are still in or contemplating, good luck!

Nobody goes broke by taking profits.


For those who know when to move away, enjoy the rainbow. For those who are seeking the pot of gold at the end of the rainbow, bring an umbrella along. It seldom rain but pours!

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