Market has done what it does best, outwitted us

Market has once again shown, who is the boss, who is the smartest. It has done what it does best, make us part with our hard-earned money.

Market has fallen in the oversold category. Technically an oversold bounce is due which could come tomorrow. Market has so far wiped out all gains made in last 12 months. If you have not been cashing on the highs of the market, you are a net loser, doesn’t matter whether you invested in bulk any time during last 12 months or invested in SIP. Sounds scary. Yes, it is very scary. Market is sinking, people are running for cover. There is no place to hide.

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Can I outsmart the market

I have always rushed to buy when the market corrects. To my good fortune market has always bounced back. I understand the fact when the market bounces back, the first couple of days the traders who have done bottom picking see a profit of 5% and bail out and sit in cash. That causes the market to push down a bit creating fears in the market that aftershocks are coming and there will be further sell offs.

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Software Anomalies In Automated Trading

NIFTYBEES is an ETF product by Goldman Sachs and it is quite popular as it allows you to buy a basket of all NIFTY shares as per their weightage in the NIFTY index. In times like this where turbulence is the norm and not an exception, diversification is the most important tool to protect yourself. It would seem nothing better than NIFTYBEEES that allows you to buy top fifty underlying stocks by the market capitalisation of the country.

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Global Markets in Turmoil

Global markets in turmoil, screams the headlines. The reasons are China Market Meltdown, Greece, Plunging Oil Prices and Fed’s flip-flop on raising interest rates. I would like to ask few things :

1. How do these events affect India.
2. Are these events new? Are they not factored already in stock prices.
3. Is it a big decline yet?

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Take advantage of market irrationalities

Every stock has its intrinsic value. Best time to buy is when the market price falls below its intrinsic value and sell when the price is above it.

Market is usually efficient. This means that bargains are hard to find. If there is a thousand ₹ note lying on the street, the chances are that some would have picked it up much before you noticing it.

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