A little story -
There was a small village, everyone in that living happily, one day
someone from big city came with his assistant, he said- I will give
10rs for every monkey you catch and bring to me, villagers have found
new job -they caught monkeys and sold to that stranger made good
money, after a while they lost interest -The stranger said-I will give
you 15Rs for every monkey -more monkeys came,after a while the price
of monkey went up to 60-One day the stranger was out of the village
his assistant said -Look this guy does not pay me-I want to sell all
his monkey to Rs 50 so when he comes back you can sell it back to him
for Rs 70- the villagers agreed -The assistant has sold all monkey to
the villagers for Rs 50 and went out of d village-villagers had their
monkey back & still waiting
The villagers are us Indians , our stocks are the monkeys and FIIs are
the strangers !!!
Lets all learn
CA Rajiv D Khatlawala
(Author : "How to profit from technical analysis" (Vision books))
Access the descripttion of the book at www.visionbooksindia.com
Nice story Mr. Rajiv.
I would also like to add one by Benjamin Graham.
Graham’s parable goes something like this. Think of yourself as owning a share in a business in partners with others. One of your partners, say Mr Market, is somewhat of a neurotic who on any given day will offer to buy your share or sell you his at a specific price. His moods can fluctuate anywhere between incredible optimism and overwhelming depression. One day he will nominate a higher price to buy or sell, the next day he might increase it, lower it, or even appear uninterested in whether he buys or sells.
The point that Graham makes is that Mr Market’s judgment is formed more by mood swings that by rational thought and that this gives the wise investor buying and selling opportunities. If Mr Market’s price is unreasonably high, then wise investors have the opportunity to sell. On the other hand, if it is unreasonably low, then they have the opportunity to buy.
The important thing is that a successful and careful investor makes her or his own decision, based on their own ideas of the worth of the investment.
CAclubindia
