bear...bear...everywhere!
this is a follow up to my blog post 'bull...bull...everywhere'. remember about all the tom-dick-harry bulls that i wrote about. man, have they gone hiding or what! its the same guys who used to most confidently talk about stocks at 100 going to a 300 in a few months and then a 1000 in a few more months. these are the guys who now hesitantly speak only when you ask them about the same stock - 'you know what, i haven't checked the price of the stock in a while' or 'lets not talk about the stock' or 'lets not talk about the stock market at all'.
we all know that the US market and economy is pulling the markets around the world down. but what i have found most interesting in the bull phase and now also in the bear phase is that the stock market is run, more than technicals or fundamentals, by sentiments. its more like a herd culture. there are a few interesting points that i would like to mention here (not all are completely related, though!)
1. i read this somewhere - there was a contest held where a group of top i-bankers on wall street were asked to pick a set of stocks v/s a group of play mates who were asked to pick a set of stocks as well. after a certain period of tracking both sets of stocks, it so turned out that the stocks that play mates picked did better!
2. a little bit about the very famous finance websites with comments from expert analysts - i haven't seen any source of media more reactive than these sites. they very closely follow the market. they can change their tone just on a switch of button. they'll talk about highly positive targets, once the market goes in the opposite direction, they start coming up with fresh low targets. really really funny!
3. its really funny how a few weeks of bear run of the bear market starts quickly trickling onto other markets like commodities and realty. we're just beginning to hear that the over heated realty market in india is entering a bear phase. again, we're not talking about supply demand, we're not talking about regulations, etc. all we're talking about is that people are kinda shocked by the fall in the stock market. so they' re not ready to invest anywhere else!
i am beginning to become more and more confident that sentiments, more than anything else, are driving the stock markets.
we all know that the US market and economy is pulling the markets around the world down. but what i have found most interesting in the bull phase and now also in the bear phase is that the stock market is run, more than technicals or fundamentals, by sentiments. its more like a herd culture. there are a few interesting points that i would like to mention here (not all are completely related, though!)
1. i read this somewhere - there was a contest held where a group of top i-bankers on wall street were asked to pick a set of stocks v/s a group of play mates who were asked to pick a set of stocks as well. after a certain period of tracking both sets of stocks, it so turned out that the stocks that play mates picked did better!
2. a little bit about the very famous finance websites with comments from expert analysts - i haven't seen any source of media more reactive than these sites. they very closely follow the market. they can change their tone just on a switch of button. they'll talk about highly positive targets, once the market goes in the opposite direction, they start coming up with fresh low targets. really really funny!
3. its really funny how a few weeks of bear run of the bear market starts quickly trickling onto other markets like commodities and realty. we're just beginning to hear that the over heated realty market in india is entering a bear phase. again, we're not talking about supply demand, we're not talking about regulations, etc. all we're talking about is that people are kinda shocked by the fall in the stock market. so they' re not ready to invest anywhere else!
i am beginning to become more and more confident that sentiments, more than anything else, are driving the stock markets.
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