The Three Best theories of Stock
Market
It is not
possible for a common investor to track or to alter the market movements. The
change takes place for every minute, and even the experienced market analyst
cannot track the market changes, and for small investor it is a very difficult
phenomenon to analyze market.
Always the looser in the market is small investor; the large investment groups can able to tolerate any large crisis with their huge investment and large data available about various companies they invested.
But I am giving some fundamentals so that every one can basically understand about market and may avoid the investment failure:
1) Rotation theory:
considering the last 30 years experience the market changes can be divided into cycles, each cycle ends with a large raise and deep possible bottom. In the last three decades the market forms 6-cycles each of 5-years. They are 1978-1983, 1983-1988, 1988-1993, 1993-1998, 1998-2003, and 2003-2008. So the market is going to its peak for every 5 years. So we should invest at 1st or 2nd year of a cycle and make profit at either 4th or 5th year.
2) Opposite investment pattern:
The large winners of the market like buffet and Templeton follow this rule. There winning is not a big secret, it is simply thinking opposite to others. When all are fear of market and investment, they make investment and when all are entering into market with good hopes, they sell their shares and make profits. Investors following this rule never made loss in market.
3) Market PE:
Most of the small investors are entering into market just before the fall and they are making heavy losses. Market-PE can be used as a device to know the exact point to invest. Considering the last 30 years the market never goes below the PE=10 even it is going below it, it is strongly rebounding above 10 PE and reaching maximum of 25 PE. So we should invest around the 10 levels and sell around 25 PE.
Our country had the second financial system that is rapidly growing in the world, for every 6 years our financial growth is nearly doubling, if it continues like this we may achieve GDP of 30 lakh crores dollars in 2038. For this market capitalization should be 50000. So our BSE-sensex may go to 50000 mark in near future. So its wonder time for long-term investors to invest at any time present now.
Always the looser in the market is small investor; the large investment groups can able to tolerate any large crisis with their huge investment and large data available about various companies they invested.
But I am giving some fundamentals so that every one can basically understand about market and may avoid the investment failure:
1) Rotation theory:
considering the last 30 years experience the market changes can be divided into cycles, each cycle ends with a large raise and deep possible bottom. In the last three decades the market forms 6-cycles each of 5-years. They are 1978-1983, 1983-1988, 1988-1993, 1993-1998, 1998-2003, and 2003-2008. So the market is going to its peak for every 5 years. So we should invest at 1st or 2nd year of a cycle and make profit at either 4th or 5th year.
2) Opposite investment pattern:
The large winners of the market like buffet and Templeton follow this rule. There winning is not a big secret, it is simply thinking opposite to others. When all are fear of market and investment, they make investment and when all are entering into market with good hopes, they sell their shares and make profits. Investors following this rule never made loss in market.
3) Market PE:
Most of the small investors are entering into market just before the fall and they are making heavy losses. Market-PE can be used as a device to know the exact point to invest. Considering the last 30 years the market never goes below the PE=10 even it is going below it, it is strongly rebounding above 10 PE and reaching maximum of 25 PE. So we should invest around the 10 levels and sell around 25 PE.
Our country had the second financial system that is rapidly growing in the world, for every 6 years our financial growth is nearly doubling, if it continues like this we may achieve GDP of 30 lakh crores dollars in 2038. For this market capitalization should be 50000. So our BSE-sensex may go to 50000 mark in near future. So its wonder time for long-term investors to invest at any time present now.
