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What Lies Beneath

  • Last week I was watching a investor query an analyst on a television show, the analyst in his most humble opinion on a particular stock said "Fundamentally it is good, technically it is not looking so good." "What should I do?" asked the investor, the analyst replied, "I think you should hold on." The investor prompted "can I buy more, should I sell some." Up came the analyst in his humble opinion "buy on a fall, and sell on a rise" and in wisdom he added,"it is a volatile stock anything can happen." I failed to understand what the investor achieved out of this conversation. The conversation had incorporated everything viz. buy, sell, hold and the standard disclaimer,"anything can happen."

    Investors are bombarded with packets of irreconcilable data which cause their little hard drives to collapse under pressure and confusion. Partly to blame for this are investors themselves, who, in the quest for more information, buy themselves a box of contradictions!

    What an investor needs is a modicum of authenticated information and to be phlegmatic. However most investors these days are contrarians and hence, they follow up with every pink paper, and investment magazine, add to it the daily dose of 'analysis' on television. Those scores of analysts reciting their pedantic verses and the numerous phone calls by altruists souls that ring in to tell you 'what's hot on the street'! What do we have at the end of all this? Ans.: An agglomeration of profligate yet irreconcilable information and a confused individual -- who can barely find his way in the heap of ' information '.

    Serpents in the financial Eden :
    All the information an investor has access to is at most sciolism, what lies beneath is above the reach of the common man on Dalal Street. Distortion and dilution are the two most plaintive facets of information today. Mostly intentional, distortion and dilution is carried out by interested quarters and the fodder is fed to the people, the public domain as we are all aware has the ability to Xerox information at the speed of light, and before you know it a distorted piece of information has taken the shape of ‘hot news’ on the street. One man’s investment is another man’s trade and yet another man’s manipulation, eulogistic news on a particular counter is slowly distributed by those having adequate interest and means, this is followed by creating activity in the counter, since activity is a prerequisite of creating public interest in a stock and also a means to crystallizing public opinion and attention towards the stock. And since much ‘authenticated’ information is not available when the stock comes up for a ‘opinion poll,’ the previously distributed Eulogistic information planted by interested quarters is used to form a opinion on a stock. The result is anybody’s guess. 

    Conclusion : While considering human limitations one would not expect hypercritical analysis. However a one sided or ambiguous analysis is iconoclastic of any form of news or analysis and must not be allowed to pass off in the name of 'news.' The use of hyperboles is a well recognized prerogative of advertisements, let us not confuse advertisements and analysis. Developing a mechanism to be adopted by all broadcasters whether in the electronic media or otherwise which would check infiltration by vested interest, assure authenticated information and fix responsibility for violation is the need of the hour. Let us hope that the past and the present will guide us to tread more cautiously in the future.


1 comment
  • Skeptical Investor
    Skeptical Investor Hi Sunil,
    You have expressed the views of many of us... most of what we see in media (especially TV) is a load of rubbish. However, I don't think you can expect the media to change - after all, they are simply chasing eyeballs. If the public is glued to ...  more
    July 10, 2012 - 1 likes this

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