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kulman
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   Posted: 08/Jul/2008 at 5:07pm |
Originally posted by PrashantS
..i think worst is yet to come if crude holds like this
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You are right.
On the flip side, with majority people expecting equities to rally after crude's fall, Mr. Market might be having a different shock in store. Who knows? Strange are the ways of Mr. Market.
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Life can only be understood backwards—but it must be lived forwards
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paragdesai
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Posted: 08/Jul/2008 at 9:35pm |
Originally posted by kulman
Originally posted by PrashantS
..i think worst is yet to come if crude holds like this
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On the flip side, with majority people expecting equities to rally after crude's fall, Mr. Market might be having a different shock in store. Who knows? Strange are the ways of Mr. Market.
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You mean to say decline in crude price is already factored in at current levels or the decline in crude price like housing bubble may create another financial crises? 
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kulman
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Posted: 08/Jul/2008 at 10:40pm |
Actually what I meant was that Mr. Market usually behaves contrary to the popular consensus opinion.
So when everyone & my dhobi
would go long equities (with leverage) Mr. Market might refuse to rise,
rather decline hitting their stop-losses. Such are the ways of Mr.
Markets.
Here are some interesting thoughts by Jason Zweig posted earlier here:
A simple solution is to keep an emotional journal. Once a day, religiously, make a little note about your gut feelings as to where the financial markets are headed, such as, “How do I feel about my portfolios today? I’m really happy about how things went. It makes me feel good.”
Every once in a while, take a look at what your emotions were telling you and what happened afterward. You’ll learn that if you turn them upside-down, your own emotions are a very good guide to what’s about to happen in the markets. I
don’t believe that investors or advisors can turn their emotions off.
But I do believe you can learn to turn them inside-out. The way you do
that is by seeing how unreliable they are. This will enable you to cure your hindsight bias and to learn that by investing in the grip of emotion, you will always get things backwards.
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Life can only be understood backwards—but it must be lived forwards
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PrashantS
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Joined: 14/Oct/2006
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Posted: 08/Jul/2008 at 12:51pm |
Originally posted by kulman
Originally posted by PrashantS
..i think worst is yet to come if crude holds like this
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You are right.
On the flip side, with majority people expecting equities to rally after crude's fall, Mr. Market might be having a different shock in store. Who knows? Strange are the ways of Mr. Market.
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your right even if crude falls things wont go up so easily ...eveyrone thingks crude is the big evil ...but what about people gambling in the market ...it will take time for that sentiment to build
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nitin_jagtap
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Joined: 29/Dec/2007
Location: India
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Posted: 08/Jul/2008 at 9:06am |
Originally posted by kulman
Originally posted by PrashantS
..i think worst is yet to come if crude holds like this
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You are right.
On the flip side, with majority people expecting equities to rally after crude's fall, Mr. Market might be having a different shock in store. Who knows? Strange are the ways of Mr. Market.
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Very true ..if things were so easy we would all be rich at the same time ....btw if things go up or down for crude ....both ways someone is really going to pay a big price especially if it goes down some banks will
be in deep trouble I guess.
Moral : Never trust the obvious.
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Warm REgards
Nitin Jagtap
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nitin_jagtap
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Posted: 08/Jul/2008 at 9:10am |
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As for equites to rise just cause crude comes down ..I think the law of nature will ensure that after the heady bull run, people now will have to learn and earn money the hard way ..we will have to digest the entire learning wait (I dont know how long ) till people forget equities and only then some thing good will happen until such time it will be just the hot money that will be chasing the new investment classes one after another.
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Warm REgards
Nitin Jagtap
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kulman
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Posted: 08/Jul/2008 at 9:20am |
people now will have to learn and earn money the hard way ....
.if things were so easy we would all be rich at the same time
Moral : Never trust the obvious.
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You have hit the nail on its head.
On a lighter note, are you the man with the hammer that Charlie Munger refers in his speeches?
Edited by kulman - 08/Jul/2008 at 9:40am
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Life can only be understood backwards—but it must be lived forwards
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paragdesai
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Joined: 22/Oct/2007
Location: India
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Posts: 837
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Posted: 08/Jul/2008 at 9:32am |
Originally posted by kulman
A simple solution is to keep an emotional journal. Once a day, religiously, make a little note about your gut feelings as to where the financial markets are headed, such as, “How do I feel about my portfolios today? I’m really happy about how things went. It makes me feel good.” Every once in a while, take a look at what your emotions were telling you and what happened afterward. You’ll learn that if you turn them upside-down, your own emotions are a very good guide to what’s about to happen in the markets. I don’t believe that investors or advisors can turn their emotions off. But I do believe you can learn to turn them inside-out. The way you do that is by seeing how unreliable they are. This will enable you to cure your hindsight bias and to learn that by investing in the grip of emotion, you will always get things backwards.
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First part of this lesson I have already learned when both crude & sensex rallied together since 2005 to Jan 2008. It was hard to believe for me at that time that sensex will rally in line with higher crude price. Actually both are inversely correlated.
But as you correctly said & also Basantji indicating that to avoid the macro factors which are out of our control. I am relatively new to the stock market & I have seen first phase of bull run & passing through the first phase of bear market.
I am not trying to correlate movement of Sensex & Oil Price but trying to understand what happened to Sensex in Jan 2008 can also be happen to Oil in coming times.
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