Thursday, August 06, 2009

STOCK MARKET: - Not To Be Blamed For the Erosion

Stock market is a prime part of the financial system in any economy of the world. It is the only place where all companies get the public fund to perform their operations. Stock market also symbolizes the financial position of any economy. Stock market is a place where any person can become a stock (stake) owner of any listed public company and also at any point of time can exit the company by selling his stake to the interested buyers of that stake in stock market. The basic concept behind the formation of stock markets universally is only investments or being a part of any company on basis of your search or analysis to get share of company profits.
Now the undebated question arises, whether the stock markets to be blamed for the erosion of capital of masses or not? My answer to this question is absolutely not. But yes I have heard most of the traders saying that market has ruined them, market make them sick, market has stolen their bread or butter, they have loose their pants & shirts in stock market and after that they start abusing market and its behavior. They start saying that this is a rubbish business we never ever will trade in it again. They are bunch of crooks. They are pick pocketers. It is a terrorists market, which will make you bend on to your knees. Now I want to ask them one question to clarify their views on market. Do they really know the real basic concept behind the formation of stock markets? If yes then there are very few chances of loosing capital in market unless there is fraud in company management. If no there are only 5% chances of making money in market depending on your luck.
As we all know that stock markets are meant only for investments (only knows not apply) but if we people choose trading as a main option in market then the responsibility of the high risk involved for being stolen in a blink of the eye is also ours. So nobody can complaint the stock markets behavior for their losses as they are playing against the behavior of stock markets. No one compels us to trade in the market nor the broker neither the government. The person who compels us to trade in market is ourselves - our emotions, greed and temptations. Trading in stock markets is like gambling in casino. When the word trading (intraday or positional) is attached to stock market then that is gambling and gambling has no future. It is a universal truth that nobody takes money back home in gambling except only the luckiest persons of the world. Otherwise result always ends in negative. In gambling you can win once, twice or thrice but not always and the result at the end always remain in negative.
I will take iron as an example to explain my views. We all know that iron is used for ironing the clothes and that is what iron is made for. If any one use iron for straightening the hair then the damage caused to hair like burn is entirely the users fault. Now can any one blame iron for the damage of hair? If yes then stock markets can also be blamed for the losses. Otherwise do not blame markets for the erosion caused. Now taking one more example into consideration to support my views we all know that yoga is extremely important for meditation and for the good health of the human beings but there are lots of asana, which are restricted for different-different people having different-different kinds of diseases like hala asana (plow posture) is restricted for women in menses period etc. severe effects can be caused by performing improper asana also. So, in a nutshell we can say that the problem is not with yoga but the practioner only. Everything in this world has positive and also negative effects. As WILLIAM SHAKESPEARE said,’ nothing is good or bad in this world, it is we who make things good or bad’. Same with the stock markets also.
Now in the end, I am not saying that you people should stop trading in stock market but if you loose your capital in stock market because of trading then don’t blame stock markets for the erosion of capital. It is our fault by choosing wrong and very risky path in stock market. It is not markets fault. It is a fault of our emotions and temptations.



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