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2006-12-18 22:37:18 · 11 answers · asked by gaurav g 1 in Business & Finance Investing

11 answers

Well, my crystal ball is cracked, or maybe it we me that was cracked and my crystal ball was okay. At any rate, as long as there are people wanting to put their money to work by owning publicly-traded corporations--or, most importantly for many, that there are people who trade stocks in the hopes that they could make money off of the others, then the stock market will be its normal self.

That is the two sides to the market. Real, honest investment, on the one hand, and speculation, trading for an advantage on the other hand. Some people work for companies that have ESOPs (Employee Stock Ownership Plans), so they are buying themselves a stake in the company they work for. Some people want a piece of that money they shell out to the gas station every week, so they buy stock in the oil company that owns or supplies their favorite service stations. Some people think that the store they shop at is a really good company, so they also buy some of the shares for their retirement. Some people see that such and such a bank pays a dividend almost as good as the interest they pay in their savings account, so they buy some of it as well as put money into savings.

Then there are people who say things like XYZ keeps going up and up, so if I buy some of it and the market price goes up, then I can sell it and make a profit. Others are saying XYZ has gone up so long that it is bound to go down soon, a market correction, so I will sell some share short and buy them back when the price is lower, keeping the difference.

The market situation will be that some things will go up, some things will go down, and somethings will waffle between the two. Which ones? That is where understanding the business, economy, and world affairs comes in--a drought here but not there? Buy ag stocks of companies that center there, but not here. Oil exporting countries having troubles? Buy stocks in companies that get most of their oil elsewhere. And as the king in that wonderful music used to say, etcetera, etcetera, etcetera.

Good luck.

2006-12-19 01:38:57 · answer #1 · answered by Rabbit 7 · 0 0

Which stock market ? which country ?
What sector ? finance ? health care ? communications ?
transportation ? biotech ?
There a a number of major stock markets , even just in the USA , and sectors within them .
But , over time , ALL markets cycle up and then down.
Pull up the 1 yr, 5 yr, 20 yr charts on whatever market you are interested in and see the relevant cycles.

2006-12-18 22:48:49 · answer #2 · answered by kate 7 · 0 0

You'll get laid off from top institution and must keep residence gambling video video games. Heh, that could be cool. Actually you are in well form. By the time you move out into the truly global and seem for a task, and even by the point you want a school mortgage, matters can have recovered. In reality the more difficult we fall proper now, the quicker matters are going to be developing then, definitely.

2016-09-03 17:47:44 · answer #3 · answered by ? 4 · 0 0

market should keep going (bullish) for a little while but more slower. The effects of gold and oil will be reflected in the market.
Remember the golden rule: "The Trend Is Your Friend"

2006-12-18 22:40:00 · answer #4 · answered by Anonymous · 0 1

It will move forward for next 4 months until the budget. Only after budget anything can be said. Until them it will move forward and slightly lower occassionally to stabilise. Expect sensex to go 15500 to 16000 in the next three months.
VR

2006-12-18 22:41:44 · answer #5 · answered by sarayu 7 · 0 0

The economic forces which determine equilibrium market volatility and risk premia (stock market condition/situation) are probably the most debated topics in the analysis of financial markets. Part of the debate is the empirical evidence revealing market "anomalies" which have challenged students of the subject. Consumption-based asset pricing theory, closely aligned with dynamic general equilibrium theory, has had a profound impact on our view of financial markets and of asset price determination process.
There are many factors that define the situation and development of the stock market, particularly market states of belief, Agents’ states of belief, market capitalization. This is because:
1)To forecast prices agents must forecast market states of belief which are beliefs of ‘‘others’’ hence the equilibrium embodies the Keynes ‘‘Beauty Contest;
2)A ‘‘market state of belief’’ is a vector which uniquely identifies the distribution of conditional probabilities of agents;
3)Two properties of beliefs drive market volatility: (i) rationalizable over confidence implying belief densities with fat tails, and (ii) rationalizable asymmetry in frequencies of bull or bear states;
4)Market volatility is driven primarily by market expectations;
5)real income, saving rate, financial intermediary development, and stock market liquidity are important determinants of stock market capitalization;
6)macroeconomic volatility does not prove to be a significant determinant; and;
7) Stock market development and financial intermediary development are complements instead of substitutes.
There are two simple forces through which beliefs drive volatility: (i) over confidence of an agent’ forecasts described by amplification of the agent’s probabilities which, in turn, generate densities with fat tails, and (ii) asymmetry in the frequency of bull or bear states. Although these principles can be satisfied by different belief formation models, the simplest way to think of them is as an expression of animal spirits.
The important role market states of belief play in theory is reflected in the fact that agents hold diverse individual forecasts of future market states of belief when they write down their Euler equations.

However, on a deeper level, heterogeneous individual forecasts of future market states of belief is entirely equivalent to heterogeneous forecasts of future asset prices and interest rates and heterogeneous price forecasting is the essence of modern macroeconomic theory. In a general equilibrium context the tool of a market state of belief is a formal method for allowing agents to be rational and use the same equilibrium map, yet make heterogeneous price forecasts. This suggest that we could build models in which agents make heterogeneous price forecasts but then it will be equivalent to a model in which they know the equilibrium map but make heterogeneous forecasts of an object like the market state of beliefs.

2006-12-19 03:29:49 · answer #6 · answered by Augustine Pius Thliza 2 · 0 0

What are the winning nos. of next week's lottery?

2006-12-18 22:38:50 · answer #7 · answered by Dirk Diggler 2 · 1 0

When?

2006-12-18 22:40:22 · answer #8 · answered by What, what, what?? 6 · 0 0

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