How the Markets work?

 
Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for Rs. 10. The villagers seeing  that there were many monkeys went out in the forest and started catching them. The man bought thousands at 10 and as supply started to diminish and villagers started to stop their effort he announced that now he  would buy at 20 rupees.This renewed the efforts of the villagers and they started catching moneys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to 25 and the supply  of monkeys became so that it was an effort to even see a monkey let alone catch it.The man now announced that he would buy monkeys at 50! However, since he had to go to the city on some business his assistant would now buy on  behalf of the man.  
 
In the absence of the man, the assistant told the villagers, "Look at all these monkeys in the big cage that the man has  collected. I will sell them to you at 35 and when the man comes back you can sell it to him for 50."
 
The villagers queued up with all their saving to buy the monkeys. 
 
 
 
 
 
Phir na woh aadmi mila na us ka assistant........... Sirf bandar hee bandar.....

Bill Gates : It's all in the name

I was just going through the shareholdings of some companies. And guess what did I find when I saw the share holding pattern of Allianz securities. To see for yourself click here.

Well in the FII list I figured the name of none other than Bill and Melina Gates foundation. While at first I was surprised at to what was the foundation started by Bill Gates,  which is dedicated to bringing innovations in health and learning to the global community, doing investing in his company. However, a little closer look made me realize that “it  was all in the name” . While Bill gates foundation is “Bill and Melinda Gates foundation”, the one listed in here was Bill Gates and Melina foundation. (Without a “d” in Melinda).

Now I am not sure if the website spelt it wrong and it is actually bill gates invested in here or it is somebody masquerading as Bill Gates.

Anyways just found it interesting.

  

More quotes

Some thoughts and quotes from recently read books:

“Mr. Market is there to serve you, not to guide you…and it will be disastrous if you fall under his influence” – WB

When investors lose sight of fundamentals and base their decisions on price signals and super contagious emotions,…..it is trouble because the tails of unrealistic expectations can come to wag the strategic dog”

“Stock markets only tells you when you will be right, the strength of your analysis tells you whether you will be right” -WB

Change : John Maynard Keynes

John Maynard Keynes famously said, "If the facts change, I change my mind, sir. What would you do, sir?"
 
The above quote is so apt for markets and stock calls. While it is admirable to be patient and sit tight but nothing like the virtues of flexibility and willingness to accommodate information and adapt views.

Well as it goes: “Put all your eggs in one basket and view the basket closely” but be ready to change some eggs in the basket when the “Facts” change.

Listing of Brokerage IPO's

The Indian market is seeing a number of IPOs, in every possible industry segment you could think of. However, what amazes me is the recent run up in Brokaerage firms offerings. Three companies Multi commodity exchange, Emkay share and stock brokers Limited and Steel City Securities Limited.

I am reminded of a few lines from Adam smith: The money game which I produce Verbatim:

….But if a room full of people called a sales organization can go public (many have), and another office of people called an ad agency can go public, there is really no end to the concept. A number of brokerage firms are hungrily waiting for the day when they can go public, i.e. not only sell everybody else’s stocks but their own ,too. (Before they do , you will hear that the tremendous capital needs of Wall street can only be met by outside financing, that the present commission rates simply do not cover the expansion that has to be made, and that half the members of the New york stock exchange are going broke. Then one offbeat firm will go public, followed by a stampede, so that the members of the NYSE, instead of having one or two million dollars’ worth of other people’s companies and a share in their own, can have one or two million dollars’ worth of their own. As Lincoln Steffens said,” I have seen the future , and it works.”

Eventually there is no reason why doctor and lawyers should not go public too; …but at some point of time a smart lawyer is going to see…they could sell the stock at twenty times earnings. …( In good markets, there is always a hungry underwriter. In bad markets, everybody is hungry and all the energies go into demanding that commissions be raised.)

Once the lawyers make it safely public, you can look forward to brain surgeons, Incorporated, which will be sold by brokers as “the most direct way of participating in the broadening growth of medical care, of federal aid programs, of the increased attention to the nation’s health and of the growing trend to such schizophrenia.”
-Adam Smith The Money Game (Page 88-89)