We saw NIFTY moving down 290 points on Thursday. Agreed it was a big loss but NIFTY had been going up over last few days and a correction should have been expected.
I found this question on Quora:
Let us ask the right questions.
( You can read it on Quora too )
On October 15, NIFTY went down by 290 points and Sensex was down 1006 points.
It is very normal.
Market was going up for last 8 days. It can not keep that momentum forever. It went up again on October 16.
Market going up and down is what it is all about.
It is happening ever since trading in the markets began. Why do we talk of just past 3 years?
And nobody is manipulating the market.
Markets are regulated in much better ways than they were in the early 1990s.
Some manipulations do occur from time to time but are insignificant considering the total turnover of the market.
Manipulations theories are the product of the loser mindset. We do not want to accept the fact that we did the wrong trade/ made wrong investment and are happy to attribute it to someone manipulating the market.
Always looking for green:
Once we buy a stock for whatever reason, we want it to keep going up. It does not happen. We keep waiting. People on business channel fuel and sustain our hope.
When Yes Bank share price had come down from Rs. 400 in August 2018 to Rs. 190 in February 2019, they were not talking about the problems faced by the bank. They were telling that once some minor issues were addressed, the stock price will come back to previous level.
Now these guys are having the information. But their interpretation has a green bias.
Then Ravneet Gill joined as CEO, not even joined , only his appointment cleared by RBI. The stock price went up from Rs. 190 to Rs. 250 in just two days and everyone was having a party.
We all know what happened after that. Nobody ever said that this stock will go below Rs. 10 in a year.
Even today people are hoping for a Rs. 100 price in near future.
We do not accept the fact that some investments can go wrong and do go wrong. Trying to justifying them does not bring the money back.
We ask wrong questions?:
Sometime in 2018, a friend asked me this question:
Vakrangee was a Rs. 500 share in January. Why something which is worth Rs. 500 comes down to Rs. 50?
I told him that he was asking the wrong question.
The right question was —- Why a stock which is not even worth Rs. 500 is trading at Rs. 500?
Market finally puts a right price for everything.
This is the 5 year chart for the stock.
Maybe there was manipulation.
But it was there when the prices was being pumped.
After being pumped, they were dumped. Who would like to stay in something which is not worth the price? Those who did not get out will keep looking at erosion of value all the time or till the time someone pumps it up again.
Ask the right questions?:
Let us remember the fact —- Market is always right.
We are wrong and we are responsible for our actions. We need to ask the right question, find the answers, rectify the mistakes and make our trades/investments profitable.
Seeking consolation and finding the generic reasons for market moving up or down never helps.
Ask the right questions. To yourself.
Find the answers.
That will make you a winner.