no one knows anything, everyone knows everything

During the financial turmoil that has been characterizing the markets for over a year and a half now, everyone gets to hear a couple of experts' comments on the condition of the markets every now and then, suggestions for trading the next day and then obviously one's expert comments on how and when the market would recover. in fact people are never satiated by the tonnes of information already beaming in the market ,rather they would watch more and more television programmes and discussions, refer to newspaper editorials and articles on market trends and of course hundreds of financial magazines flooding the market today(thanks to the insatiable and ever increasing greed of the new age investors)on the future course of market to make sure they are thinking in the right way(known as 'confirmation bias' in the financial parlance) or that the decisions taken by them really matches the acumen of warren buffet or atleat the Indian warren buffet, rakesh jhunjhunwala. a recent newspaper article caught my eye which said that nsdl has crossed 1 crore demat accounts. a demat account is a necessity for any retail investor investing the the indian markets. so going by the figures u can gauge the enthusiasm prevelant in the common people today to become a live testimony to the rags to riches story or a new jamal(slumdog fame) of the dalal street(and who knows maybe their story inspires another bollywood flick altogether, at least the more ignorant of them maybe even fancied by such a thought). add to this enthusiasm, the fact that nsdl is only one of the two depositories providing demat services, the other being cdsl(central depository services limited).if such can be the excitement present in the people, one can just stop and wonder as to what makes the indian investors so optimistic about the markets. is it that india is on such a growth trajectory that no investor can loose money or is it that all those invested in the market have such a fine understanding of the cadence of markets that they would always remain in profit, whatever be the mood of the market. Clearly any person who has not lost his sanity would vehemently reject the first option. And more clearly any person in the country would even more vehemently deny the second option. Everyone would say in unison " leave the talk of a crore of them ,not even a thousand of them understand the markets properly". Is it so? Then what about those men in suits and tie who appear on television screens and in business magazines who regularly give the buy, hold, sell recommendations, targets & stop loss for various shares. They can't be just so like us, they must be very well knowing in advance as to what's going to rise and what's going to fall. But then, if it is like that, why do the experts' very own comments contradict each other. Why does a brokerage firm tells the investor to hold a share when the other brokerage firm is telling to sell it, and wait a minute: here comes a new advice from an altogether different firm. it is telling the investors to buy the same share in large amounts telling that it's a growth stock. What a dilemma!!! Some people would say that it's better to keep out of markets than muddling your mind with these different recommendations. and you can't just ignore them labeling them as unambitious. Let us just take an investors point of view for a second, a common Indian investor who can often be seen on the streets boasting of his previous day's sagacious decision which let him earn a 30% or a 40% profit. But it's not his fault. You are a common investor, a common Indian investor. Let’s come to the most intelligent lot of them, the experts of the market, the extraordinary experts of the Indian market.

whenever i hear the word market expert i get to remember a line of warren buffet .on being asked if he took his investment decisions by referring to the reports and comments of financial experts, he said " i use those reports and comments only when i need a hearty laugh". Really, why should we use or even listen to those comments. There are thousands of those experts who would tell as to why did the market fell yesterday but not a single one who would give a solid prediction for tomorrow’s trends giving valid reasons. Some of you may say that i am being over demanding by asking for next day’s predictions .i agree ,i am but this is just an exaggeration of my frustration with these experts . I don’t wish to denigrate their reputation or challenge the institutions which have imparted such valuable knowledge to them. My point of view is completely different. I just want the investors to realize that these experts are also common people and that the every opinion given by an expert is his/her personal opinion on his own understanding of the market which may turn out to be completely different from the actual behavior of the markets. infact even if the expert truly predicts the behavior of the market, his style of trading may be completely different from yours. he may be a short term investor and you may be a long term or vice versa or he may be risk averse and you willing to take risk. Let’s take for example the high crude prices in the previous year and then the sudden downward plunge in the prices within a couple of months. I remember reading an article by an international expert when oil prices were hovering around 140$/ barrel mark, who clearly dismissed any slump in the prices saying that it was not a oil bubble like the internet bubble of 2000 and given the demand in the international market it would soon touch the 200$/barrel mark. However as soon as the oil prices had reached the 147 mark it started falling and fell as no one had ever expected. This doesn’t mean that u can challenge the expert’s market acumen. It’s just that markets are really that volatile and unpredictable. It is often seen to defy logic and the biggest irony is that the way it defies logic becomes a new logic in itself. It’s good to be ambitious, our country does need a few more dhirubhais and jhunjhunwalas . kudos to your ambitions. But instead of relying on any expert or infact anyone to fulfill one’s being rich dreams ,one should play the markets according to one’s own understanding and only if he can bear the burden of a catastrophic loss in the wake of a downturn. Optimism and pragmatism should go hand in hand.