Stock market is a cyclic phenomena

Stock market is so complicated and so simple that it cannot be explained. a child knows about God only that much what a great saint knows. Nobody has seen God . Everybody defines god in virtue of his own ethics and beliefs .in the same way if we talk about stock market then it is so easy that everyone understands it in a first glance and so complicated that even big pundits cannot explain it. Everyone has his own analysis on the basis of the conclusion drawn from the facts, which depends upon his own skill and experience. but no one is one invincible here.then what attracts people towards stock market ?the man who does not knows about it regards it as gamble with gamut.some learned orthodox regard it as a play of manipulation. at present highly qualified fund manager take it as a high profile profession.they have their own research team. they regard it as the most important wing of financial sector.but the opinions of different people vary from each other .
Here we are going to talk about some untouched aspects of stock market.
In stock market the buyers and sellers bid at the same strike price. at that moment buyer thinks that the price is fine for buying and the seller thinks the vice-verse.in this way both buyer and seller bid and ultimately one's prediction gets wrong.we can compare it with a half filled glass of water. according to one person the glass is half-empty and for the other it is half-filled.in actual we can see that there is no difference between the two assertions ultimately , only there is a difference in perception and classification. in the same way if we see 6 through the opposite side then it appears as 9, but actually there is no change.so from the above we see that perception depends on our position. Albert Einstein in his 'special theory of relativity ' wrote that nothing is absolute in universe which means that we cannot say anything in motion or vice-verse.everything is in motion or in rest in respect to something .Einstein also said that universe is finite but unbound which means that it's frontiers cannot be observed even though they exists.in stock market also, we have the same principles working.here at the zenith also we have buyers and at bloodbath also we have sellers.this happens as every time the market is good or bad to somebody as it is not absolute but relative to the minds of people.
at every trough there is a crest and at every crest there is a trough.but during these ups and downs, many banks and individual face doom.many people leave this market for good.they regard stock market as the worst place.so sometimes stock market becomes desert and sometimes green meadows. after such events also market is running from 1650A.D and will continue to run in future.
you would be thinking that from where does this money come ? In reality it is a phenomena much similar to water cycle. you must have seen an ocean.everyday millions of lake, ponds and rivers bring large amount of water with them, still the level of water in the ocean remains constant.large ice-caps on mountain peaks are the source of these perennial rivers. in this case there is no water reservoir on the top of mountains , still then the cycle is continuing from millions of years. yes, this phenomena is water cycle. the water from the ocean forms water vapour, which when condenses results in the formation of rain.this water from the rain flows through the river.
in stock market we have the same kind of play.capital market is an ocean,big financial institutions are perennial rivers whose source is Himalayan glacier.but small investors are drains,which exists due to rain water, after that they vanish.
in bullish market small ponds and springs flow with full energy into the market.but when the inevitable draught comes(crash) they disappear.
if we observe human population cycle, then we will see that within 10 years a new pack of juveniles of 20 to 30 years of age group enter the market .they are filled with full energy .they have very high risk taking capacity. at this time they enter a new phase of life with a rejoiced mood.same is the case with financial institutions. they also have new and energetic fund manager and analysts. these factors make the market bullish. the good monsoon, GDP growth, emerging market ,IT boom and high industrial production become the blossoming flowers that make the garden green and colourful. at this point large tides can be seen in ponds and lakes also(small investors). stock market becomes the buzzword everywhere.the FM gives the credits to his financial management skills. everywhere ecstasy fills the heart.every heart sings:-
जीबन का यह सपना अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है ।
सेंसेक्स २२००० पर बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो
बड़ा अच्छा लगता है।
जीबन का यह सपना बड़ा प्यारा लगता है
सेंसेक्स भी ४०००० जाएगा
बड़ा अच्छा लगता है
फ़िर से कहो कहते रहो ....
in this heyday communist party remains adamant on its eternal philosophy of poverty. in practical communist party is directly dependant upon poverty and its eradication will have the same effect on the latter.They never laugh. they understand the ultimate truth of life.on the birth day of a child they are confident that it will die one day so they don't rejoice in birthday party .They say that what is happening with sensex is wrong so rebel it.but who listens to their wise sayings. at this time the juveniles are at the zenith of their age, so why should they think of old age. but old age is inevitable. it is a natural irreversible phenomena.
the finance minister and communists are both correct in their logic. a glass is half filled or half empty both are true at anytime. but at this trough , market fundamentals work and there is a crash.
the pack of juveniles is now of 30 years. they are married. now they have the onus of their wives and children. now their risk taking capacity has decreased. at last market bottoms out. but the cycle does not end here. again a new pack of juvenilles enter the market with rational outlook , again water starts flowing in dried rivers. the cycle continues...
here the question arise that what should we do?
if you keep a horizon of 30-35 years and practise systematic investment plan then you have a chance of becoming next warren buffet.
stock market is the best place, you may be wrong. this is an ocean which is a store house of gems. all kinds of dangerous sharks are found here. the water is saline, so you can't drink it. but circumspect and patience work can fetch you the gems. to accomplish this task, you have to extremely hard for 30-35 years. the following are some of the golden advises:-
1) if you are an intra day trader , then get out of this . for you this market is a gamble.
2) if you are of 20-25 years of age and are not expert then you would be the biggest loser. in future you may or may not work.
3) if you have seen both happy and sorrow moments and you know the reality of market then you may thrive for long.
4) if you are doing systematic investment then you have a chance of becoming world's richest person.