i have always been inquisitive and i like to do deep dives in my areas of interest...tht's exactly how i got involved with stocks and in trying to understand abt how the markets work. assuming u r better than me ( and that's easy), u would be able to pick up the knowledge much faster and get ready to go...but the continuing point i'm trying to make from the first part in this blog is....IS IT WORTH IT? is the effort-return ratio favourable?
i feel that the stock market game changed forever with the emergence of mega size hedge funds and wealth managers, with their having created new instruments in derivatives like futures and options ( The Economist referred to the emergence of these as " an alphabetical soup of new instruments". Warren Buffet called derivatives as "financial weapons of mass destruction"). like all 'pundits', the hedge funds and money managers have sought to write in 'sanskrit' wht could be explained in simple english and create a select club in the process. they have thus not only increased the complexity of the game vastly, they have overtime garnered the muscle to move the market their way, interpret the stocks their way and force them up or down in the direction best suited to their positions.
there is even talk of some investment banks having become as powerful as the 'illuminati' or the 'church' with ability to affect not only the markets but the surrounding environment of main street business, politics and the media.
come back to the retail investor now; even if he does pick up genuine winners but the 'pundits' dont like 'em, they can just beat the stock down ignoring its winning qualities till everyone looking at their fall believes them to be no good too. and though each share holder is supposed to have a say, does a retail investor have any genuine ability to choose the management of the company or advise them in any way?
where lies the joy of investing for a retail investor then? to be contd...
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