Blogged with Flock
Monday, February 11, 2008
Thursday, February 7, 2008
In continuation to my thoughts on stock market, here is one which describes the situation. This story is not creation.
The Story of Smart Monkey Sellers
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for Rs.10. The villagers seeing that there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at Rs.10 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at Rs.20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs.25 and the supply of monkeys became so little that it was an effort to even see a monkey, so let alone catch it!
The man now announced that he would buy monkeys at Rs.50! However, since he had to go to the city for some business, his assistant would now buy on behalf of him. In the absence of the man, the assistant told the villagers: "Look at all these monkeys, in the big cage that the man has collected. I will sell them to you at Rs.35 and when the man returns from the city, you can sell it to him for Rs.50."
The villagers squeezed up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!!!
Welcome to the "Indian Stock" Market!!!!! Where, we Indians are the villagers catching monkeys and the man from the city buying these monkeys are the FIIs – Foreign Institutional Investors .
The Story of Smart Monkey Sellers
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for Rs.10. The villagers seeing that there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at Rs.10 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at Rs.20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs.25 and the supply of monkeys became so little that it was an effort to even see a monkey, so let alone catch it!
The man now announced that he would buy monkeys at Rs.50! However, since he had to go to the city for some business, his assistant would now buy on behalf of him. In the absence of the man, the assistant told the villagers: "Look at all these monkeys, in the big cage that the man has collected. I will sell them to you at Rs.35 and when the man returns from the city, you can sell it to him for Rs.50."
The villagers squeezed up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!!!
Welcome to the "Indian Stock" Market!!!!! Where, we Indians are the villagers catching monkeys and the man from the city buying these monkeys are the FIIs – Foreign Institutional Investors .
Wednesday, February 6, 2008
Stock Market: A True Indicator of Economy’s Health?
Stock Exchange Drama: Can Government be responsible?
I have always believed that an investment in stock market is akin to gambling. Yes, there are some principles which govern the movement of a stock. PE, I am told, is the basis for an upward or downward movement of scrip.
In the last few days, there has been too much of hullabaloo over the crash of the stock market.
What flared me up was an interview of some association for retail investors or some such association’s spokesperson in one of the business channels. He cried foul over Government’s inaction in controlling the downward spiral. He added that many investors have come to the road and lost their investments.
I respect The Frontline but this article - http://www.frontlineonnet.com/stories/20080215250302400.htm - by Mr. CP Chandrasekar further incensed me. He blames PM and FM partially for the collapse.
At least, as for the current UPA government is concerned, I have observed that both PM and FM have regularly been non-committal to the blood-bath or extreme rise in adrenaline levels. Of course, I also do remember that BJP-led NDA Government would not loose any opportunity to stake claim for good performance. So much so, when the Congress-led UPA Government took over and the market collapsed, BJP made big hue and cry saying that Congress Government had lost confidence.
I am seriously wondering if stock market is really the true indicator of a country’s economic health. Please read, is it the TRUE indicator?
Shouldn’t an investor be held responsible for his investments?
Pic source:
http://www.indiasays.org/wp-content/uploads/2007/08/manmohan-singh_chidambaram.jpg
http://invisibleman.com/bear-vs-bull.jpg
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