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Market is nothing but a war.
Continuous war between bulls and bears. All warfare is based on
deception. When we want to attack, enemy should see it is highly unlikely, when we are very near of the enemy we must make the enemy believe we are far away, when we are far away, we must make him believe we are near.
Similarly, market creates a
situation/environment full of confusion where
investors are averse to buy or skeptical to
buy in the bull market (in the initial stages
of the bullish trend). It creates deceptive
environment, so the normal investors will
remain clueless about its future course of
action. Like was, when the bullish trend is at
final stage or at the maturity stage, it again
creates an environment which compel investors
to hold the stocks even though the prices are
falling.
Take a common
example of Technology stocks in the year 2000.
All tech stocks like Wipro, Infosys, Satyam
etc has started their downtrend along with
global tech crash. But the common perception
about tech stocks was strongly bullish.
Leading analyst, fund managers were openly
vouching for "Indian tech" story. There were
strong rumors that Infosys will touch Rs.1 lac
level etc. etc. Ultimately at the last stage
of bearish trend, investors were forced (by
market) to liquidate their long positions in
tech stocks at through away prices. In short,
bear camp was extremely successful in creating
deceptive environment in the market and
liquidated entire tech portfolios at
astronomical high prices.
Any war is
brutal. Stock market is no exception for
brutality. It doesn't have emotions. It is
ruthless. It pays handsome rewards to those
who are with the market (read trend of the
market), and punish severally who doesn't
agree with it. Baring few professional
investors/operators & institutional investors,
all other investors, normally, trades in the
market on their emotional swings. As
emotions have zero value in the battle field,
common investors are not so successful
in the market. Smart operators, knows
rules of the war perfectly and as such reap
the rewards in the market consistently,
regardless of the trend of the market (bullish
or bearish).
It is a war
between bulls and
bears. But it is not just a fierce
battle between the sellers and buyers, there
are few another dimension to this war. It is
also a war between insiders and
common investors,
smart operators/professional investors and
common investors
who invest on street buzz or heard.
When smart players/insiders are accumulating
the stock, they never (read again, never)
allow other investors to buy the stocks, and
many a times compel common investors to sell
the stocks instead of buying. The same is true
when other camp is busy in distributing the
stocks at higher levels, they never allow
other investors to sell the stocks, by
creating a bullish atmosphere in the market.
Spies and
rumors are the essential and integral part
of any war and armies ability to move is
depends on these two things. Insiders,
professional analyst are spies in this
financial war. Media performs the duty of
spreading rumors (unintentionally). Insiders
spreads the rumors and collect the vital,
price sensitive information ahead of the other
market players and thereby making killing
profits in the market. mystock is also
some sort of spy. Like any other
professional we collect the information about
the strategic moves of the market and
supplies them to you at a price. Your ability
to win the war is based on how good the spy
is.
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