Don’t get trapped in “Laav ! Laav! Markets” ~ Don’t Chase the Stock Price or the Sensex at 19000 ! fearing you’ll be left behind!
‘Laav’ meaning to ‘Give’ as in ‘Buy’ was a common frenzied scream ,particularly during bull runs, by hundreds of brokers, sub brokers and jobbers in BSE during Open Cry Trading in the Ring ~Such an Era peaked in the early 1990s when Modern Reforms were ushered in ~ There was BSE Exchange and UTI Big Daddy Investor and then there were the rest ! ~Brokers were one big Happy and Wealthy and Close Family with a few dominating the rest and setting the Adjustment or ‘Badla’ or ‘Contango’ Rates for the carry forward system in Specified Shares ! ~Since the Switch to Electronic Trading Platforms,the Broking Family has split and it’s become quite impersonal now ~ for many even the ‘r’ had fallen off ! from Broke’r’ ! ~ as the Game remained the same but the rules had changed !~ NSE now dominates with MCX threatening it too
Yesterday the Markets clearly ran ahead of themselves scoring 200 points on the Sensex and crossing and closing over 19000 !as if from now on it would be a one way street North !
Today the Sensex has cooled off over 160 points and is below 18900 levels at 2.30 pm ~ All Stocks that ran up yesterday have cooled off ! ~ an exception here or there can be ignored
Of course Sensex may bounce back but sleeping with Volatility is injurious to your health ~ Don’t Listen to half baked theories of making Volatility your Friend and earning in Trading and Derivatives consistently whether the Market goes up or Down ! ~ This is nothing but marketing bullshit from even some leading Brokers and Advisors !
While the Bullish Sentiment is clearly sensed and Momentum seen and even supported by Liquidity of huge FII Inflows upward of Rs 19000 crs in September 2012 alone be warned not to chase stocks in such a frenzy ! ~ The Risk of chasing Price,especially of High Beta Stocks ,is High ~ The Risk of Chasing Value remains Lower
It’s a herd investor psychology to jump in so as not to miss the boat !~ Fear remarkably begins to ebb and Greed and Temptation is too strong and Fundamentals of Valuation,especially Earnings Potential tend to be ignored ~ easy to be seduced by over-optimism on Future Prospects and get carried away by all Positive News on Companies and deliberately ignoring or underplaying Negative News and Risks