Sunday, July 27, 2008

The Fund Managers love the FALL...

The deep pocketed HNI’s and the fund managers across the globe “love the fall in the indices”, especially in the emerging markets like INDIA. The stock markets are always living with the scapegoats and vultures; here the early bird always catches the flesh.

The retail investors with their large investment base in quantitative numbers fail to understand the qualitative investment principle. In contrary to these scattered retail investors, the HNI’s and the Fund Managers are very organized and they are cohesive in action with right information dissemination at right time. The research reports, the studies, planning proposals and the govt. decisions will reach them well in advance to garner the opportunity.

The Investment horizon for these category operators are any thing beyond 5-7 years of time frame. So they love the markets go up only when they are tired of buying the quality stocks and then they push up with out providing any resistance at higher level. The retail investors who have limited money and cumulative failures while investing in the downturn fails to recognize the real up move because of the fear of failure and the shortened perspective.
The daily traders and the week to month long averaging experts think that they will gain by averaging at higher level shorting. This way the markets invite lots off shorts but they will be absorbed. The indices go any where but take lots of shorts into the system by providing signals as if they markets are likely to break when they side downwards to invite more shorts.

The markets find few takers (especially the scapegoats) at the higher levels are clear signals of exhaustion. The operators easily understand that the quantity he/she expected go, find no takers is a clear signal to go for shorting. The same situation arises at the bottom as there was no/few sellers is a clear signal for an up move. The real problem/hurdle the retail investor face across the globe is the method in that can help to identify the “Saturation Point”?.

The stock markets are not only with numbers but there are other things that influence those numbers are that matters.

Please think and place your ideas in the Comments…..

I request the readers to place their ideas for others sake and encourage the others to learn-“the right information dissemination at right time”

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