How to be a stock markets expert (or sound like you are)

Dhirendra Kumar of Valueresearch just nails it with this piece.

He says like cricket commentators who try and show their expertise with empty talk, same applies to stock market commentator as well:

On social media, there is an entire subgenre of jokes about the cliche-heavy commentary that a certain well-known cricket commentator delivers. There are lists of some ten to fifteen phrases, which are said to make up almost everything that he says. There is even a downloadable sheet of the Bingo game, with each of his favourite phrases in a square. Presumably, his fans print these out and as he says something like ‘that went like a tracer bullet’ or ‘all three results are possible’, they cross out the square of that phrase.

However, cricket and cricket commentators are far from being the only guilty parties when it comes to creating commentary out of a stream of cliched phrases. When a cricket commentator says something like ‘the batting side will be looking to make runs and the opposition will be looking to take wickets’, then the statement is at least factually correct.

However, no such limitation appears to hold back the stream of cliches that makes up news and views about the financial markets. The other day, I came across a list of such cliches that are incessantly used by everyone who talks or writes in the media about stocks in the US. I realised that while some of those were universal and also used in India, there was some more that were unique to India.

So here’s my list of meaningless cliches that are used by investment analysts when they are talking about the equities. But first, an obvious mea culpa–I find that I have either used, or accepted as meaningful almost all of them.

The list is:

  • There’s a x per cent probability of the markets rising
  • The easy money has been made
  • I’m a bottom up investor / I’m a stock picker
  • Markets are down because of profit taking
  • More buyers than sellers

The last one just nails it. 🙂

There has been an explosion in cricket commentary and analysis. In earlier cricket matches, you were lucky to have one commentator. This grew to two and now there are three. There is pre-match analysis, toss analysis, pitch analysis,  lunch break analysis, tea time analysis and post match obviously. Then there is late evening entire day analysis. This is followed by entire match analysis followed by series analysis. If India in involved the series always are billed as some revenge series and there is this feeling of a war around the corner.

Similarly, we have for stocks. There is analysis every second, then at the middle of the day, followed by a wrapping in the evening. Late night sums up what went up and down. Then there is monthly data, quarterly results, mid-year review and then the annual one.

In both cricket and stocks, one has to appear as intelligent and keep coming out with newer ways/adjectives to dissect the game. Much of it is over the top and most of the time people go wrong. But despite that craze for expert views keeps going and becoming larger with each cricket series and new financial year.


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