Wednesday, September 19, 2007

Stock Market!

[Disclaimer - I am not even close to novice regarding stock markets and I do not even have a Demat account yet. Yet, I want to talk about market as much as I know of.]

Stock Market seems to be the future for everyone. Everyone including government employees, house wifes, college students, software engineers, etc. are now in to it. It intrigued me and I learned some thing (which is very very less) about the market and it was intimidating to know how many have lost their life in this game. Game, yes, we can say Stock Market as a game, which is controlled by some one or some thing which in invisible and constantly watching us, for it is the case for almost everyone that, the moment anyone sells a company's stock, the price increases and the moment anyone buys the stock, the price decreases.

The thing which confuses me is that, I have seen lively, no one will be ready to buy stocks of a company, for say, at a particular time, for Rs. X and after some minutes they will be very much ready to buy it for Rs. X+10 (or 20 or 30) and it is the same case for selling also in the negative meaning. Meaning, no one knows the exact price of what they are buying or what they are selling, why they are buying and why they are selling, they simply do as many number of people all over the country do. Do they know that the stock which they buy for 100 or 200 or 500 or 1000 worths only Rs. 10 or even less? Less people will only actually know this and play in Stock Market, but all others just do without even knowing what they are doing.

Some experts say that you have to watch the market constantly to be a millionaire and that expert will not be rich or may even be poor, struggling to get money to invest in it. It is what I have learnt that, knowledge alone will do no good, for you will have to have a lot of money and luck. Luck is needed to help the price increase for the stocks you buy, as there is no way one can predict what the price will be in the market the next minute, otherwise, everyone will earn a lot of money. Money alone can make you earn more money and all other factors like knowledge about the company (whose stock you are going to buy), Predictability, Luck, etc. are secondary things only.

If you want to enter into the share market and if you have a little money, you will surely lose it and if you have money, you will still lose it and if you have more money, you could earn money and if you have a lot of money, you will surely make a lot from it. It is like, grabbing the money from those who have less and give it to those who have more. More over, a statistics says that, 95% of those who do intra-day share meets loss and those who wait (obviously having more money) could gain. Gain more knowledge about share markets before investing much. Much I have told now and you could think all I have said is an utter more bull-shit or some other shit, but these are the things I know with my little knowledge and I may be totally wrong. Wrong or right, I have told my view, and now is your time to share your views...

[P.S.: I have tried much to make every sentence's first word to be the previous sentence's last word. Word used might have given wrong meaning but I just wanted trying. Trying is not a bad thing isn't it?]

6 comments:

Sathesh said...

onnume puriyala

amudhan said...

Sathesh,

When I saw your comment, I read my blog and even I did not understand it. Just thought of scribbling about my knowledge in Stock Market. I believe that you know nothing about Stock Market and it is good for some more time. After you jump into Stock Market come and read this again, even then you won't understand anything :).

Shan said...

Alphabets form Words... Words gather to make sentences.. Sentences present a view... Views come from good Brain... Brain works only for very few... Few bloggers like you blogs damn Good... Good articulation and depth vocalization...

amudhan said...

Shan,

Commentlaye oru kavidhai eludhureengala... adada... enna arumai... now the world will know who is my Guru... and it you...

Random varibale said...

I am compelled to say something here since Amudhan normally doesn't post on something that is proximate to my interests, and this time he has done it. I think any basic book on finance should tell you what is happening in a stock market. There are a lot of myths about it that one has to loose money etc.
Stock prices are a function of the expectations that people have about the performance of a particular compnay. So the price at which it is issued is not the true worth and it is a mistake to interpret it that way. At any point, a stock price increase would mean that the people in the market think that yr company's investment plans etc are robust and it is likely to yield good returns and hence would demand your stocks.If demand goes up price increases. But some might think that the same company's plans are not correct for the future and might hence want to avoid losses and sell the stocks. Since their expectations are different they value things differently. It is this information and hence a expectation asymmetry among the players is what causes trade.
There is ofcourse speculation etc that goes on. There is also a random process that can become hard to predict by any organised tools and people are still trying to understand the complex phenomena completely. more on this later may be! but a good post!

Shriman Kalyan said...

Kewl. I can only admire the creativity that you have put into your writing style da.