The magic 'number'

Last week, I was reading a book called ' Gods and Godmen in India' by Khushwant Singh and it was a pleasure reading that book as very few authors have the guts what it takes to charge like a raging bull to attack the epidemic of Gods( i believe demi-gods would have been more apt) and godmen that has swept the nation in recent years. In that book , he has also mentioned about four things which are mostly in the minds of Indians and one of them is market ( For other three, Read the book).So what is  stock market all about ? Is it just a number or more than that ?

For some, its a 'support' level while for others its a  'resistance' level. Some call it a 'bullish' phase while other term it as a 'bearish' phase. But why such a hype about this number ? Perhaps no other number draws so much attention in middle and upper class as the numbers on the Sensex.It takes only few swings in the stock market for the people to change their opinion about equity market.Like, when sensex touched the 8000 level, everything about the stock markets looked uncomfortable and there were talks of further dips upto 6000.

And when the recent rally took place and the Sensex touched 16K, the very people who were then skeptical about the stock market are now not tired of predicting new 'Highs' for the Sensex with every passing day. We can see the changing mood of so-calledStock pundits & leading global investment houses, thanks to change in those 'Magic numbers'. There are many experts( rather Craps , saying all the non-sense things to further their own interests) appearing on the business channels trying to grab the attention of the people by predicting the new levels of the Sensex without even thinking about their blunders in the past.

But for us,the investors, while it is natural to go with the tide, some rules of investing don't change siply because the mood in the environment has undergone a change. Some understand it easily while others are forced to understand the hard way ( after loosing huge amount). But one thing is true that equity will always provide us a good earning opportunity ( a faster one) but can never give us the comfort of safety like the one in traditional investment opportunities. It holds well irrespective of the sensex level, bullish or bearish phase.

Here, I would like to quote, Benjamin Graham,the legendry investment Guru -

" In the short term, market is a 'voting'  machine whereon countless individuals register their choices that are product partly of reason and partly of emotion. However, in the long-term, the market is a 'weighing' machine on which the value of each issue is recorded by an exact and impersonal mechanism."

HAPPY INVESTING