Tuesday, June 28, 2011

SIMPLE TRUTH IN INVESTING IN STOCKS


                       

1.      Not all can make money in stock market. Some will make, most will lose.
2.      Stock market requires continuous supply of naive investors, otherwise it will collapse.
3.      Share prices of most companies, in one way or the other, are manipulated.
4.      In most cases, value is created only for Promoters and their group and not for minority investors.
5.      It’s always the retail investors who are hard hit since neither they have staying power nor privy to any privileged information. By the time they buy the ticket, the train would have already left the station.
6.      Rating warnings are provided, in most cases, after the disaster has taken place, leaving no opportunity for investors to safe guard their investments. 
7.      Stock brokers are always bullish on market, for obvious reasons.
8.      Stock recommendations, research reports some time are given with malafide intentions.
9.      GREED is THE underlying factor for irrational IPO pricing. Still most brokers recommend all IPOs for investment.
10.  Whether the investors make money or not, the promoters and all market intermediaries make money. That includes Stock Exchanges, Brokers community, Registrars, Custodians, Rating agencies, Regulators and the Media – both print and electronic.

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