Jul

10

Indian Stocks Fall, Ending Worst Week Since October on Monsoon Deficiency — Bloomberg News

This kind of article was rampant in 1900-1910 when US had farm workers at 30-40% of working force. Not enough rain in monsoons causes market to break a psychological level.

Sushil Kedia replies:

Thirteen monsoons in a row classified as good, with just in-between as not as good, rather say fourteen monsoons that have not been bad in a row have made this generation of traders in India rather unaware of the havoc less-than-kind raingods can bring for an economy with 70% of the population still scrounging for a living on the farmlands. This market had in any case been too much of a paradise to be the world's number one performer moving from October '08 lows of 2200 to the recent 4700. Money, it seems, was to grow on trees here and suddenly each is faced with a situation that the trees might not grow the usual also enough.


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4 Comments so far

  1. Craig Bowles on July 10, 2009 3:17 pm

    Japan climatologists were predicting El Nino all along based much on the Indian Ocean Dipole reversing. I think it was positive three years in a row and overdue to reverse. The Browning Newsletter has been way ahead on all the crazy weather and even the cool, wet northeast. Accuweather has mentioned the cooling Pacific Ocean and warming Atlantic having a bigger effects late in the 20-30 year cycle. With the population explosions in California and Florida mostly taking place in the previous cycle, we have our own problems to contend with. In any case, Asia's monsoon seasons are expected to be less dependable. That's a big deal since India's population has expanded so since the 1970s.

  2. douglas roberts dimick on July 10, 2009 4:22 pm

    Random or Global Warming?

  3. Gangineni Dhananjhay on July 11, 2009 11:23 am

    As a trader from India my permanent companions are PracSpec, EdSpec. Bloomberg’s reports remind me of PracSpec Page no 173, Chapter 7. Journalists trying to find reasons and retrospective explanations after market hours do the maximum damage and disservice to the ever gullible investors. Indian Market ( NIFTY ) corrected 15% in last week. Journalists find lot of proximate reasons like Union Budget, Monsoons etc which are descriptive not predictive. I also deeply wonder how financial commentators try to provide explanation for insignificant moves of 1% or less in a stock and the same reason for both down and up moves . This indirectly shows even if the market participant correctly knows the news beforehand it is difficult to predict the market reaction to the news. As a follower of this forum whenever I try to explain this subtle difference to many my fellow traders , they refuse to listen and stubbornly seek an explanation for market movement instead of hypothesizing Path of least resistance and managing the risk ( via stop loss or Position Size or non directional bets ).

    Many worthwhile ideas like

    1. Market trying to capture as many players with it
    2. Concepts from TORTURE
    3.Market going to extremes causing maximum pain to maximum participants as a way of maintaining market ecology

    which are understood from this forum act as a torch for understanding market machinations and mysteries.

  4. Tushar on August 22, 2009 7:03 am

    The last Drought in India was in 1987 so we had 21 straight good monsoon seasons and not 14.The Bear mkt,then,culminated in April
    `88 when Sensex was at 390.The current situation is more like the
    drought during the 1962-66 bearmarket.However in terms of Elliott
    the degrees are totaly different.

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