What intrigues me in this market are the Robinhood investors – which have now soared to more than 10mn. What’s going on in their minds? Most of them have made profits they wouldn’t have ever imagined, encouraging them to further invest in search of easy money. And we have a wide range of such investors, right from retirees, housewives, students, unemployed, employed, but part time investors, entrepreneurs, shopkeepers etc. I am sure by now many of them would have breached prudent capital allocation norms with most of the weightage tilted towards equities, mostly speculation. The most common logic for buying stocks is “accha lagtaa hai”, or “looks good”. Although all of them are earning well, it’s an apt state of “disguised unemployment”. So I wonder what is their contribution towards the real growth of India. Las Vegas too contributes to the US Economy, but tourism forms a decent part of that.
Having been in the markets for more than 35 years, and having experienced number of such boom and bust cycles, I sincerely believe we are in a bubble zone and that this euphoria too will end. When can it end is a billion dollar question, since the bubble can grow bigger before bursting. A prudent investor, is one who has control over this thoughts and expectations. One should decide how much is enough and most importantly not regret moving out. The most difficult task for the investor in the current scenario is to sell his investments and stay in cash as the itch to reinvest is very strong. And it’s important to have a Plan B to keep oneself occupied as good times may not last long….
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.