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Alam
part eccentric ... part fun .... stubborn .. but not stuck up ... very open to different views, ideas and possibilities ... varied interests ... engineer ... mba ... trying-to-be-a-good-entrepreneur ... ex-software ... ex-quality ... ex-tobacco ... ex-alcohol ... trying-to-be-ex-cancer
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Tuesday, January 22, 2008

easy come, easy go

7 comments:

manu said...

hmmm....
Yaar, what is causing so much fluctuation on Tuesday, and if it is going up and down 1000 points 4 times in a day, should we be bothered if it falls 3000 points in five days? Forgive me for my ignorance, my idea of sensex involves a certain Sushmita Sen...

Alam said...

Junta Tells me that that two major things have caused this deep dive in the chart.
A> FII (Firangi Money) cashing out of the Indian Market .. some say its because some Firangis are anticipating Amreeki recession and want to be liquid when recession sucks the juice out of markets

Unsually when one set of investors sells another set buys ... Holding up the price .... You would expect mutual funds and retail investors to buy the stuff that FII wanted to sell... That brings us to the second major reason that is being touted around
B>Retail Investors have got a lot of money (some say people have borrowed money ... put their "makaan" on "girwi" etc etc) locked up in the Big Reliance Power IPO. They do not have extra money to buy more stuff. In other words they have liquidity problems. So people cannot buy what FII want to sell

When there are people who want to sell and not many who want to buy then prices fall ...

This is what happened ...

People say the effect got amplified because many people were trading on margins (broadly risking in the money game when they did not have enough money on them)... when the margin calls came ... the margin players had to sell ... bringing in more sellers (remember there were very few buyers) ... driving down the prices ... which took "Sexy Sen " for a tailspin.

Nothing Spectacular said...

thoda long term socho bhaiya.. ye sab minor fluctuations hain - ek saal baad kisi ko yaad nahi rahegi - yaad rahega sirf ki gdp grew at 8%+

Gayatri said...

Ups and downs are part of the game. I won't want to take the fall in a negative way the way most naive people like to think of it as. This was an excellent buying opportunity both for short and long-term. I bot some stocks - when this fall happened. Booked 10% profits INTRADAY- something that happens only in punting stocks. And I booked 20% on the remaining stocks the next day!! Yes, global meltdown impact will be there. But the India growth story is still intact.

Gayatri said...

Also, the Tuesday fall was on account of margin calls while the previous falls were on account of outflows. If u note, the volumes traded were very low on tuesday -therefore no reason for a 10% fall to circuit levels. A lot of brokers had gone after their clients to collect money. Some people I know could not get orders executed on Tuesday because their brokers were either away getting money from clients or their trading terminals were suspended because of non-meeting of margins. Also, suddenly, because of the market crash, a lot of brokerages increased their margins. So if someone were paying 20%, he probably would have to end up paying 40%. That further aggravated the situation.

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