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Note: The artciles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

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Sunday, March 28, 2010

Experience remains the best quality

This time it"s different."You surely heard this until january 2008 set in from people when you showed concern about the continuos rise in stock prices and the sustainibility of the then bull run?Conventional wisdom was in doubt and every valuation parameter was challenged.When this happened,people started joining the herd and did what the majority does.Thus,you had everyone talking about the great indian growth story and everyone started buying stocks at any available prices.Everyone bought stock at stretched valuations and remained equally confident of succesfully offloading to another fool who will be willing to buy at a still higher price.Cut back to 6-7 years ago:can recollect the heydays of the technology boom.If my recolections are solid I am pretty sure these similar phenomenon was happening then too,only the rules of the game were very diffrent.People chose not to look at profits,instead,the mantra then was eyeballs".During that time if you went by conventional wisdom and asked someone the sanity of the euphoria you were also told"This time its diffrent".The new economy is emerging.

Coming back to the present.The new buzzword was "real estate".To cash on this craze you had managements selling stories about plans to develop and grow there real estate businesses.The euphoria of real estate was so overpowering that even companies having car parking spaces were given valuations in view of high real estate prices.But what happened after that?I dont need to put more salts in the wounds i guess?

Why do such things happen during a bull run?Why do people behave in such an irrational manner?The unique part about stock market is that it is devoid of any institutional memory.Stock markets being gambling dens,attracts diffrent typs of peoples in guise of investors.People starts entering the market in a bull run,swayed by the lure of easy and quick money.When things comes crashing down,these people exit the markets vowing never to return.

In the next bull phase,you have a very different set of players entering the stock market who do not have any memory of the past crash.Until they loose they dont realise that its a dangerous game.Thus at any time in the market we find that those with memories constitutes only baout 25% which includes confident hardcore long term genuine investors.So irrespective of the bull and bear cycles,it is these 25% who survive the storms.The only time they get hit is when they turn greedy.

Stock markets as I have discussed several times are interesting places for the wise who are willing to be investors and stay invested for the long run.If u want to be succesful,understand that they are no shortcuts of making money.Do not be swayed when you hear stories of how people have made big fortunes in the stock world.It needs lot of patience,discipline,conviction to make such kind of a money.Further another thing which sud be noted is you are not aware of real facts,people dont like to talk about losses too.As warren buffet says"I have always beleived that of all the seven deadly sins,envy is the silliest.When you are envious,u r making urself miserable.At least,with the other deadly sins,you are enjoying urself.

"Sometimes its better to conserve money than to loose it"."After excitment comes the devil on to your door".

Regards,
ARUN
I can be reached at:arunanalyst@rediffmail.com

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This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
 
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