What is stock market
What do we know about it
What we think it is
What do we understand about it
Some people believe it’s a machine for easy money
Some believe its gambling (Is stock market gambling? We will soon come with an article/blog over it).
Some do it for fun
And some as profession.
We believe, stock market is a place where money and only money is the only thing. From start to end. From entry to exit, it’s all money and it’s all about money.
This blog is to tell the Complete truth, that we are not being told by these so called TV analysts, channels, experts. This is our personal view but we believe many will relate to it and many will find this useful.
People/ TV channel experts promote stock markets on its previous success. If one asks or questions about the stock market we are only being told and emphasis on the success stories of few stocks, Such as: – Infosys, Eicher Motors, Hdfc Bank, Wipro, Mrf etc.
Who so ever knows about stock market or know something about it is fully brainwashed by these success stories. Neither anyone asks about the other side of the story nor anyone is interested in telling it.
There is no denial that these and many more of such stocks are in history of wealth creation. But is that the complete true picture? Isn’t this what we call half-truth.
There is other side of the coin as well, in this we aim to share the other side, the bitter side, but the REALITY.
Reality that is not being told or we forget or we don’t want to understand in all good/ happy times. But time to time the reality does hit us. That reality when hits us see no bars. Shows no mercy.
As we know, there are very few success stories in this stock market but failure are many, Neither the nifty stocks which everyone tells us to invest in remains the same, they keep on changing from time to time, performance to performance.
And guess what, by the time a retail investor will have information about their stock getting excluded from nifty it’s too late, inclusions would have risen too much and exclusions would have dropped to a point where all the recent gains and profits would have vanished/lost. In both the situations (inclusion and exclusion) the retail investor would have known about the same when the news has played out.
Proof: Ask people you know, ask those who have tried their skills. What u get in majority will be the answer.
Tv channels keep on telling us ‘Long Term’ ‘Mutual Funds’ but the truth is, whole day they keep suggesting intraday trades. This is what suits them.
Long term stocks are suggested once and no one again track it till it’s very successful. If that stock starts going down they will say hold on with patience. And at absolute bottom sell. Or if the stock completely goes down and out all out of blues a statement will come one must follow stop loss. That same Stops won’t be counted in upward journey.
Stock Price Recommended at 100 for a target of 150 Time period 1 yr., 200 in 3 years, S L (stop loss)- none (because it’s a long term). Great fundamental. Great company. Superb promoters. Nothing can go wrong.
A stock starts from,
100 goes 130 – Everything is good. Keep holding. Great pick. (Time period- no one will talk about)
130 to 150– Very nice. Target achieved. (Time period- no one will talk about)
150 to 200– Superb. Every expert will take credit, yes, we told so. Best channel best expert.
200 to 250– TV channels and experts: – Look this has overshoot targets and we recommended profit booking.
250 to 300– Overbought. Don’t touch it.
300 to 400– All quite
400 to 500+– It’s a multibagger. TV & Experts- Yes, we knew it, we recommended it.
Above case is very good and enjoyable. Very easy to believe and loved by all.
The above case makes people believe that yes, this channel and experts are very good.
People know, they might have not participated in it but there must be someone. We just want to believe this case and from then we will blindly believe what they i.e. TV and analyst says.
Some Facts about the above example: –
- No one actually tracked the stock from the beginning.
- Everyone is interested in the price moment and end result.
- At 100 that particular expert also never knew it can go 500, they just used this opportunity to sell themselves because it’s a success story now.
- Stock can never go in one direction (exceptions can’t be counted). So, before it reached 500 one never knows how many times it did hit the trailing S L (stop Loss)
- Retail investors can’t show patience so they won’t have ridden the journey (then why they even think long term).
Now the other side of the story: –
Same stock, same scenario, recommended at 100. Great fundamental. Great company. Superb promoters. Nothing can go wrong.
100 price goes 95– unnoticed. (though its 5% still no issues)
95 goes 90 – TV won’t follow it, retail investors will say: correction happens. No worry. I’ll average.
90 goes to 85– That expert or TV channel won’t follow it and will literally forget that recommendation since they don’t hold any responsibility (That’s logical)
Retail investor: – it was expert/ TV recommendation. Things can’t go wrong. I’ll average it more aggressively. Maybe I’ll sell my profit trades and put the money here. I am getting it in discount. 100 has become 85. Add and average all I have.
85 goes to 70: – TV and experts won’t follow it. Retail investor: – OMG what’s happening. Now whom should I ask? OK Let’s wait ……
70 goes 50: – TV and experts won’t follow it. They will keep quiet.
Retail Investor: – after losing 50% is in panic now with no alternative. No suggestions.
Suddenly the stock which was in BUZZ and recommendations of almost every TV and expert is now nowhere seen.
50 goes 35: – TV- Poor stock. Destroyed wealth of the investors. Poor fundamental. Poor company. Poor quality promoters. Everything is wrong.
Retail Investor: – Kicking himself.
35 to 20: – TV- we told you so. This is a poor company. Retails investors should not burn their hands.
Retail investor (After losing 70+ of his capital): – Deep regret. Abusing share market. Won’t invest again. All are corrupt and thieves here.
Some Facts about the above example: –
- TV channels or experts are doing jobs for themselves, they are not your employees neither they have duty to make you profits.
- One is responsible for his/her own loss. When u don’t pay in profits how can one feel cheated when in loss.
- TV channels or experts always tell u its risky. Take it more seriously next time.
- Success has many friends, failure has none.
- One must not follow anyone blindly. Your risk appetite only you can understand, so plan accordingly.
- You can call it bluff, cheating or anything else, fact is, No ONE IS LISTENING NEITHER CARE.
Now let’s come back to the reality. Let’s share some examples of stocks which went from top to bottom and remained there after so called TV experts recommendations. These stocks were considered as the best stocks. Best business. Best promoters. Great fundamental. Bright Future etc…In shot they were the long-term bets. Let’s see what happened to those long terms stories and stocks.
Example’s Below: –
As one can see in the pic, max years chart of the price moment of the stock. Stock currently trading at Rs 3/-. Easily visible stock was trading pass 100 and then never came to anywhere close to that. This is the clear example of the above when stock was recommended at 100 and it backfired. More to this, Stock was consistent from 2004 to 2008, it was moving in range. It broke that range just to bluff the technical and stable fundamentals. That top price is the time when all those innocent retail investors do get trapped. They never thought that they can see levels of below 10 when stock was at 100, but harsh reality hit them. Stock remained in range after a good fall, not for an increase but to go down more. More investors trapped.
As one can see in the pic, max years chart of the price moment of the stock. Stock currently trading at Rs 22/-. Many new investors will be aware of the carnage this showed to all when stock came back from Rs 200/- and straight below Rs 100/- circuit to circuit with no exit opportunity. As chart shows, this didn’t happen first time. Last time also this stock trapped many at Rs 500/- levels. Even in year 2010 it did the same. Today also top TV channel’s top expert recommend this stock but ask the trapped people how much upside required for them to see their levels back. So, things remain the same, so the TV channels and recommendations only investors changed.
Dlf is another stock which one can see from the price moment chart, ruling over 500 went passed 1000 and all it took no time for it to come below 200 and remain so in these many years since 2008. That time also everyone was promoting the real estate theory with huge potential and be long term. What’s the result so far… one can see themselves.
HDIL is another example where it crossed 500 went 1000 and was promoted to retail investors. Now the current value of the stock is 50+.
Jindal Steel & Power
Chart below: –
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Steel Authority of India
Chart below: –
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These above are only very few examples taken just for reference. All these above stocks have the same thing in common. They were all time favorites, expert’s recommending them. Buzz was created and was promoted like anything. Retail investors in their greed and over confidence were never able to understand the truth behind the recommendations. The time these stocks crashed, no one was there to save. Every sell call, fundamental issues came after the crash or one can say true picture came when everything was spoiled. Portfolios got destroyed. Long term theory went in dustbin. People faced problems, lost a lot, few lost everything and the survivals packed their bag for long.
Few might say its due to 2008 crash, this that etc…. But let us tell you, who was behind that crash? Did retail investors made that bubble or TV and experts buzz. Ask yourself, what made you invest in that high market prices other than your greed. Ask those who got in trouble that time. Many have not come back and many have not left to be back. TV and So-called experts will give you several reasons to make you believe that it was not in their hands, they can’t help it etc. etc. etc. But truth is the same experts, TV’s, Fund houses, Banks, advisers, opinion makers/ givers are there again doing the same. Investors change but things don’t.
This is the other side of the story. This story is not being told to us. They don’t want us to know. They don’t want to talk about it.
We Don’t know. We can’t comment on that. And frankly we don’t even want to think.
We have no intentions to blame anyone or to say this is right or that is right.
All we want is, as an investor one should be smart enough to understand what’s right and wrong.
Also, we @ imsnweb.com is not blaming on any company for its poor show. Neither we say these or some of these stocks will remain where they are. Who knows few of these stocks get back to some good levels. But thinking they can break their previous all-time high…. Well we can have a debate on that.
Some true facts about the stock/ equity markets that we ignore many times: –
- Markets will not move in one direction always.
- In good times never forget the bad times.
- Markets don’t owe you to make money.
- Market can fall or rise irrationally.
- There is nothing like long term, it’s the time that makes a stock long term or short-term story.
- Never believe in one side of the story, because there is always three side of the story, My Side, Your Side and THE TRUTH. So always be alert in stock market case about the same.
- When there is a downfall either in market or the stock, things can go real creepy sometimes. That time no TV no Expert can save that fall. So be reasonable.
- Stock Markets are very specialized job, so don’t treat it as free lunch.
- Your capital is your only friend.
Many new investors won’t understand this above article/blog but harsh reality is, when they will understand it, things will be out of hands.
One must never forget: – “Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.”
Now Think, If mutual funds i.e. the professional investors with so many expert’s, news, technology, insiders, tools and knowledge, can be risky what can happen in direct investing and in limited funds and stocks.