Everyday I read in papers that Indian capital market don’t have much investors which is needed for both development of the market as well as of the economy. But the question is why the common man is afraid of investing into this market. I gave it a thought, including some of my friends’, and came on a conclusion (not a conclusion actually but a point at which I ended my thoughts which were running rapidly).
I went to few stock brokers for interview and during the free time I asked some of the NEAT and BOLT operators about their work. I was shocked to know that many of them didn’t invest their own money and if they did it was a very little amount. They made the transactions on behalf of their clients which were either on the basis of research done by the broking company’s analysts or on the instincts or so called tips received by the investor or trader. The share broker many a times suggests his/her clients to buy/ sell some shares which were recommended by his/her analyst. But tell me when he/she can suggest someone else to buy a share why can’t he/she do it for him/herself. Why can’t a broker take risk when he has such trustworthy information on which his company is dependent so badly that if the info gets wrong they lose money and the investors as well? I think there is a take here. Firstly, may be the broker is risk averse and don’t want to get involved into trading. But if this is the case then how can we expect people from outside the company to take active part into capital market. If I were to invest money through a broker I would ask if he himself trades in those stocks and if his answer is no then how can I expect to get better suggestions from him. Or secondly, he does not have faith in the analysts of the company and don’t want to risk his money just because some a*****e is telling him to do it. This means the analysts who work 24*7 and get tons of information from thousand sources (exaggeration) have not earned the trust of their own colleagues. They can’t even persuade their fellow employees about the correctness of the information they have derived upon with such difficulties and hardships. This might be true because if the analysts could have done better then the most profitable company would have been his and not others on which he is trading. How many of you have known analysts earning money through share market. In other way do you know any analyst following his own analysis for his own benefit? I know none. May be they are also not so confident about it.
Let me ask you one simple question (which can extend to multiple question-answers). If every broking company comes with same analysis then what’s the use of having all of them? Why cannot we have a single analysis department countrywide which will give the info to all brokers and investors? This suggestion won’t work because brokers won’t do that (because if they do it they will confirm that their analysts are useless). Then, why can’t we go to the broker better information in best possible time from which the investor benefits? This also cannot happen because different news channels have their own exclusive news shown only on that channel for first hour (metaphor). So what should the investor do? He can definitely do one thing if he wants to benefit from the trades he does. He can put some of his time in analysing the stocks he want to invest/trade in rather than depending upon some idiotic reports which may take him anywhere. By adopting this way they will at least be confident of their investments (and if they lose money they know that they are not alone). Everybody follows Warren Buffet but very few tried to be like him but who tried they have or will become successful.
And the other simple way can be of having some better analysts who don’t only shout but also come with good analysis. This depends on the analysts whether they want to become one or not. But if they do it will be benefit for all of us for sure.
I went to few stock brokers for interview and during the free time I asked some of the NEAT and BOLT operators about their work. I was shocked to know that many of them didn’t invest their own money and if they did it was a very little amount. They made the transactions on behalf of their clients which were either on the basis of research done by the broking company’s analysts or on the instincts or so called tips received by the investor or trader. The share broker many a times suggests his/her clients to buy/ sell some shares which were recommended by his/her analyst. But tell me when he/she can suggest someone else to buy a share why can’t he/she do it for him/herself. Why can’t a broker take risk when he has such trustworthy information on which his company is dependent so badly that if the info gets wrong they lose money and the investors as well? I think there is a take here. Firstly, may be the broker is risk averse and don’t want to get involved into trading. But if this is the case then how can we expect people from outside the company to take active part into capital market. If I were to invest money through a broker I would ask if he himself trades in those stocks and if his answer is no then how can I expect to get better suggestions from him. Or secondly, he does not have faith in the analysts of the company and don’t want to risk his money just because some a*****e is telling him to do it. This means the analysts who work 24*7 and get tons of information from thousand sources (exaggeration) have not earned the trust of their own colleagues. They can’t even persuade their fellow employees about the correctness of the information they have derived upon with such difficulties and hardships. This might be true because if the analysts could have done better then the most profitable company would have been his and not others on which he is trading. How many of you have known analysts earning money through share market. In other way do you know any analyst following his own analysis for his own benefit? I know none. May be they are also not so confident about it.
Let me ask you one simple question (which can extend to multiple question-answers). If every broking company comes with same analysis then what’s the use of having all of them? Why cannot we have a single analysis department countrywide which will give the info to all brokers and investors? This suggestion won’t work because brokers won’t do that (because if they do it they will confirm that their analysts are useless). Then, why can’t we go to the broker better information in best possible time from which the investor benefits? This also cannot happen because different news channels have their own exclusive news shown only on that channel for first hour (metaphor). So what should the investor do? He can definitely do one thing if he wants to benefit from the trades he does. He can put some of his time in analysing the stocks he want to invest/trade in rather than depending upon some idiotic reports which may take him anywhere. By adopting this way they will at least be confident of their investments (and if they lose money they know that they are not alone). Everybody follows Warren Buffet but very few tried to be like him but who tried they have or will become successful.
And the other simple way can be of having some better analysts who don’t only shout but also come with good analysis. This depends on the analysts whether they want to become one or not. But if they do it will be benefit for all of us for sure.
