One of the Funny Thing about Stock Markets is that Every Time One Man Buys, Another Sells, And Both Think They Are Astute – Henry Ford
Profoundly exhibiting the predator’s instinct of the players.When there is always going to be a Loser , who is to be blamed. While educating the unfortunate one, stock markets operate with the only principle that for every winner there is always a loser and Exchanges are Neutral. This
This primarily applies for secondary market investment. When the capital does not form the core of the business then the investment becomes pure speculation and based on perceptions. So shall be the returns. The values get higher and higher changing hands until it bursts. The cycle continues.
It’s human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if your’re the lucky [mutual fund] manager).” -Bernstein,William
Derivatives are the perfect example and the disappearance of big names in the recent days
The human ego to win at any cost is perfectly exhibited in stock markets.
The price of a scrip oscillating every day and every trading hour of the day in the name of price discovery when the business does not change in a given period. Too much of speculation and participation by media in creating a hysteria of a particular stock and perceptional value driving the price, the new age investor should be prepared for all eventualities of his trading decisions and do it with the clear knowledge that only the laws of the jungle will prevail.
The final inference for all stock market players – Making Money in Stock Markets Consistently will be a Perception as to Emperor’s New Clothes.