Equity markets are like a yo-yo?


In my class I am normally asked “Is the equity market like a yo-yo?”, the other question is “Is the equity market like a roller coaster?”

My answer to both the questions …is NO. NO in capitals.

Both the yo-yo and the roller coaster have a predictable movement. You know the yo-yo will go down and up in exactly the same time. It will not stay down for 3 years and then be up for 22 days.

Similarly in a roller coaster the speed, the rate of rise, descent, the time taken, the number of gyrations is all fixed. You know that the whole ride will take “20 minutes” or “40 minutes” – and in a worst case scenario all you need to do is close your eyes! Once it stops you can get down.

If you close your eyes to your equity portfolio, you could wake up holding DSQ, Silverline, Lml, Patheja forging, Shaan Interval, Indiana dairy…etc. because you did not see what happened to the promoters of these companies.

PS: even on google you cannot find some of these companies – when some of them died they were burnt, and then their ashes were buried, hoping they do not rise again!!

Advertisements
Explore posts in the same categories: equity

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: