11 Apr, 2010 | by

market-psychology

A friend of mine once told me Positive Attitude is the MANTRA for success.

Now some may say being positive is good but one has to be a REALIST too. Isn’t that just COMMON SENSE or maybe not. I believe human psychology plays a very important part in whatever we do as humans. And I do mean everything relationship, business, career etc.

Let us explore this more shall we?

Most of us who operate in the market or just watch the market have witnessed the markets going UP on bad news and vice-versa. And sometimes the strength of these irrational or unexpected moves will make you want to lose all your foresight, judgement, wisdom and commonsense. You will be tempted to abandon your own view and just follow the trend.  There are some who do follow the trend. And there is nothing wrong with that. You don’t need to beat the market consensus but just profit from it.  But sometimes bucking against the market consensus does pay well in the end.  We all know that the markets have a habit of getting either too optimistic or too pessimistic and this has a lot to do with the market psychology.  continue reading »

4 Feb, 2010 | by

exit-strategy

Although the economists still can’t agree on the real quantative impact of various stimulus packages that were adopted by economies from around the world but one cannot dispute the fact that the size of the stimulus did matter and did work in most cases.

To investigate this further let us look at the various stimulus packages that were adopted during the CRISIS.

Obviously by the sheer size and percentage of National GDP China’s US $ 586 billion stimulus Package which accounts for above 12.9% its GDP stands out from the REST. It is possibly followed by Saudi Arabia, Malaysia, and the mother of all STIMULUS thrown by United States under its American Recovery and Reinvestment Act of 2009 which is the largest by any measures (US$ 787 billion).

At the time there were market pundits who were debating the pros and cons and some even doubted if the stimulus packages will deliver and I am glad to admit that some of us including myself had a different view. Based on my judgement and commonsense I concluded in a piece that I wrote in March of 2009 titled “ Getting the Patient Out of Intensive – The Economy “ that it should deliver and put the US and the world economy back to growth. But having said we should have no illusion that the road ahead is still bumpy and uncertain. continue reading »

17 Apr, 2009 | by
flowchart_image

 
All the talk about Recession and now DEPRESSION can make anyone nervous. Wall Street “ Pros “ make their  predictions, and in doing so, create more chaos. This sentiment is probably shared by most folks on the main street.  The market is behaving like a Yo-Yo. To get a perspective, let’s look at the rallies we had in the past week. One wonders, is this a sustainable rally or a one off, I want to feel good BEAR market rally. We are seeing markets rally despite of all the negative NEWS. One might argue that the Market is always FORWARD LOOKING. Which begs the question, is it forward looking or just SPECULATING?  Let us just look at some of the headline stories of March 09, to get a perspective. GE downgraded; Germany’s growth collapsing by a record since world war II; UK and France Industrial output at lowest in over four decades; Jobless rate in the US reaching 10% in at least three states; U.S. household net worth plunging by a record $ 5.1 trillion; Japan’s GDP shrinking by over 12% annually; World Bank is now predicting a negative global growth in 2009. In spite of all these very negative news we saw the markets rallied.

Though, we saw the markets back in the RED again on 27th of March 09 after 5-6 days of consecutive rallies one could argue, what was the basis of this rally? Well may be some “INVESTORS” were expecting the worst and they believed these news were not that BAD after all? The launch of TALF and TARP program also probably helped carry the positive sentiments. The consensus view is that these programs would help but the reality is, we have a lot of continue reading »