Before writing this, i thought to make a new thread to share my views, but now i m entering, all in this thread, my some experience of BEAR RUN, ever since i entered this market.
when i entered the mkt it was the last phase of BULL RUN. i entered in JULY 2007. i just did paper trading and never went to buy anything with my hard earned money, coz i was afraid.i saw stcoks rising like anything b4 my eyes at Religare office. i thought to enter in JAN, after deep thought and made my choice of scrips. i bought RIL and sold at high rate. i was happy. my first deal and i was in profit. with in 7 days i invested good sum and on JAN 21st i lost most of my holding, coz i was using limit. just left with 10% of my actual money invested.
but i dint lose heart and tried again. this time with small profits i did INTRADAY. started reading technicals and became a full time positional trader in 6 months. i saw this bear run very closely, and found out that, with the bear run is associated greed and over excited fools, who just think that there is no night to this day. and keep investing and investing in false hope and much hyped greed.
i maintained my own theories and on fundamental grounds, i m goin to tell evry1 something that all must remember in this mkt..............
APPLES Vs GUAVAS. WHAT DO U LIKE AMONG THESE? NO DOUBT MOST OF THE ANSWERS WILL B APPLES.
JUST IMAGINE THE APPLES ARE SOLD @25/- AND GUAVA@20/-. WHAT WUD U PREFER TO BUY? NO DOUBT APPLES WILL B THE CHOICE. WE ALL GO BUYING APPLES AND THE DEMAND GOES OVER THE SUPPLY AND THE RATES GO HIGHER, WHEREAS WITH LESS DEMAND GUAVA PRICE FALLS. NOW APPLE HAS REACHED 50/- AND GUAVA IS STILL AT 20/- AND SOMETIMES GOES DWN TO 18/-.
SINCE APPLE HAS BECOME COSTLY AND THOSE WHO CANT AFFORD THEY SHIFT TO GUAVA. SUDDEN DEMAND IN GUAVA COMES WITH PRICE RISE AND GUAVA IN QUICK TIME REACHES 40/-. NOW GUAVA HAS DOUBLED AS APPLES DOUBLED.
AGAIN THE PPL THINK BOUT THE CLOSE PROXIMITY BETWEEN APPLE AND GUAVA. AND ALL THOSE WHO COULDNOT AFFORD THE APPLES AT THOSE HIGH RATES TRY SHIFTING TO APPLES AGAIN , BEING DRIVEN BY SENTIMENTS AND THINKING. COZ THEY THINK THAT INSTEAD OF BUYING GUAVAS AT 40/- ITS BETTER TO BUY APPLES AT 50/- AND THEY GO FOR APPLES. AGAIN SUDDEN INRUSH IN APPLES BRINGS PRICE HIKE AND RATES GO EVEN HIGHER TO 75/- AND AGAIN THE PPL WHO CANT AFFORD THESE RATES TRY GOIN OUT AND THEY SHIFT TO GUAVAS. AGAIN GUAVA PRICES RISE AND RISE TO 70/- AND THIS TIME THE WISE HEADS FEEL THAT ITS FOOLISHNESS TO EAT APPLES AND GUAVAS AT THESE RATES. BETTER WAIT FOR AFFORDABLE RATES THEN GO BUYING. SO THEY SELL THEIR WHOLE MATERIAL THERE @75/- & 70/- AND GO BACK HOME WITHOUT APPLES AND GUAVAS. BUT THEY BUY CARROTS AND CHIKOOS THEIR WAY BACK. THOSE WHO WERE INTERESTED IN APPLES AND GUAVAS, NOW ARE LEFT WITH HUGE SUPPLIES BUT LESS DEMAND. SO THEY DROP PRICES AND WITH EVERY 1/- FALL IN APPLE THE GUAVAS FALL 5/-. AND IN THE END, PPL FIND THAT THE GUAVAS ARE AVAILABLE AT 15/- AND APPLES AT 30/-
This is Share mkt funda. consider BLUE CHIPS as APPLE and MID/SMALL CAP as GUAVAS. when Blue chips are at peak ppl shift to Mid/Small caps and they dont feel that its a high from where only fall will come.......................................
this happened in JAN'08 and same i witnessed on 4th FEB'09. BLUE Chips were trading at highs a few days back and on 4th the MIDCAPS started their top run. ppl went buying in good faith and next day there awaited the fall. we are not ready to buy RIL above 1300 in big QTY, so we shifted to JP HYDRO, NAGARFERT and others. but that just meant to me a fall and i went short heavily that day, coz i remembered the JAN'08 fall. this story/ principle is quite big and if i start unfolding all the pages then it will b very difficult for me to carry on and for u to listen. but the moral is whenever u see blue chips stagnant and mid caps making high, then come out of the mkt. risky guyz like me SHORT the mkt as well, but the safe players should come out of the mkt.
No comments:
Post a Comment