"The idea of God is the
sole wrong for which I cannot forgive mankind."
—Marquis de Sade (French,
1740-1814)
Word
for the day
Vim (n)
Lively or energetic spirit;
enthusiasm; vitality.
Malice
towards none
RaGa reportedly reading Gita
and Upnishada so that he could tell BJP & RSS - "You've got it all
wrong guys!"
First random
thought this morning
I believe every act of a person
(including institutions and authorities) should have an objective. Aimless
actions take us back in evolution, closer to monkeys.
I am curious to know what could
be the objective of searching house and office of a suspected violator of law,
after 7-8yrs when the alleged violation was committed. Do they really believe
that the evidence will be waiting for them after so long? And if they do
believe so, would it be correct to presume that the alleged violator is a
conman, especially if he did not bother to destroy the evidence of his alleged
wrongdoing in 7 long years despite being warned several times?
Enraptured by pied pipers
As a keen student of financial markets, I have been
observing the behavior of the households who buy and sell shares of publically
listed companies. I intentionally avoid assigning terms like
"investors", "traders", "speculators" and
"punters" etc. to these households. These terms, in my view, carry a
specific meaning; and most of the households, who buy and sell shares in Indian
stock markets, could not be fitted into any one of these categories.
During my research for PhD 15yrs
back, I had asked a large number of individuals - "why do you buy and sell
shares of publically listed companies?" Based on their responses, I
classified them into three categories:
Category I: An
overwhelming majority of the respondents were found to be buying or selling
shares just for entertainment. They seek some kick, a sense of adventure in
this activity. They could hardly make a difference between the activities of
buying & selling shares and riding a roller coaster.
People under this category
deployed a miniscule part of their networth, usually less than 2%, in this
activity. A 2x rise in the value of their stocks will give them some bragging
rights, though it would not make much difference to their lifestyle. Similarly,
a loss of 50% in the value of their stocks, would hardly make any difference.
People under this category are mostly active during the bull phase of the
market, and hibernate during the bear phase.
The people in this category make
returns similar to bank deposits or less.
Category II: A small
proportion of respondents believed that buying equity shares is akin to buying
lottery tickets or playing in a casino. They would usually allocate a defined
sum out of their savings for this activity, in the hope of hitting a jackpot
some day. They would mostly bet on penny stocks that show a tendency to
multiply in value in very short span of time; fully understanding that the risk
to their capital is 100%.
The people under this category
usually end up losing 50-100% of money deployed, which they obviously do not
mind.
Category III: A
miniscule number of respondents were actually found to be investing in the
underlying businesses while buying shares of a listed company. These people
have substantial exposure to these investments, related to their networth.
These people in past 25yrs have made tons of money from stocks.
In past five years, a new category
of individuals is seen evolving.
In past five years, the number of
money managers has grown exponentially. Many of these money managers have
generated stupendous returns from stock markets. Besides, we have seen
popularity of successful investors and traders rising tremendously. The
portfolios of these money managers and popular investors/traders are widely
available on social media.
Enraptured by these pied pipers of
stock markets, many individuals have started investing meaningfully through
money managers and by following the Star investors/traders. This is a
significant structural change in Indian stock markets....to continue tomorrow.
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