Goood Mornninng Andhra Pradhesh

January 22, 2008

Correction in world markets

Filed under: market crash, meltdown — gaali @ 12:54 pm

World markets crashed. Huge market correction occured in last few days. FII’s have lost lot of money in US markets so to level it off they are taking money off India markets because they have already made profits. US stock market crashed because of greedy investment banking firms lending money (mortgage loans) to people who don’t have enough financial power to repay them back. Now these people have defaulted on their loans and bankers lost lot of money. Investment bankers have not followed best practises in lending money. Remember these investment bankers are publicly listed companies. So in the end, public who bought the shares of these companies have lost money.  Now everyone want’s US, India govt and also US Federal reserve to intervene and give some concessions (rebate checks) to public so that they can spend that money on buying goods and revive economy. Bottom line is that bad investments have high risk anytime.One should be prepared for rough times like these. Having made bad investments one should not complain when the value of them goes down. Also, there is one saying that when you see lot of people going for something your might already be too-late for it. So take calculated risk with which one can live ;).

From last few days everyone is writing about the mistakes everyone (including me 😉 ) had made but I wonder where these paid analysts were when the markets were spiralling. Check this article.

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1 Comment »

  1. Indian market ballooned in the last few months from 17000 to almost 22000. Investing has become a part time job for most of the people in India. In the recent months, the wrong perception of investing has invaded India. People are buying and selling stocks on speculation and some hot tips from brokers. People who doesnt even know why a stock is issued by a company are trading and loosing their shirts in the market. USA has gone through major recessions and market crashes, therefore, the US investors have some exposure and knowledge of risk management. For retail investors in India, the so called crashes is a new experience. Mutual funds and Hedge Funds are smart people. They understand the fundamentals of finance and economy and also know when to SELL.
    Unfortunately, for common investors it is always too late to panic and sell. That has what happened in last 2 days in India. A 25% correction in SENSEX is healthy and will raise caution among speculative investors. Please do not put your hard earned money in speculation and “hope” that market will always goes up. Hope is never a part of equation. Happy Investing.

    Comment by praveen — January 22, 2008 @ 2:06 pm


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