Emotional People and sensitive market
All
mathematician lovers are waiting for the movie of Vidya Balan on the great
Mathematician of the time “Shakuntala Devi, the Human Computer”. Being a
professor, I feel very happy that we are having films on teachers,
mathematicians after “Super 30”. Eventually I was watching the 2.5 minutes
trailer and was stunned by the last sentence. Trailer concludes with one
sentence which got my nerve, “We are Indians like that only DRAMA or Nothing”. We
may agree with this situation as we have to go through many dramatic situations
in day to day life. The question is whether the influence of our emotions and
feelings is restricted to the family or it affects the financial decisions as
well. Do we make such emotional decisions when it comes to investments or do we
react to the purchase or sale deals emotionally? We need to understand the
situation and analyse the data before jumping to any conclusion. I have taken one
example from the past, which is well known and published. Let understand impact
of news on traders, investors and ultimately on the share price.
When Mr Vishal Sikka resigned from Infosys
Every person has
the right and freedom to choose the tenure of his or her working with any
company. His/her decision should be accepted and respected by acknowledging
his/her fundamental rights. The situation changes when you are working at the
top positions, as your movement may have impact on many things. On 18th
August 2017, market was wake up with the news of the resignation of Mr Vishal
Sikka from Infosys and immediately traders, investors started taking their
moves.
If we think
logically, people gain the experience from the job profile, try to make the current
company better and then switch to other company for betterment, which is very
normal culture in the corporates. When the resignation news became viral, many
financial analyst, new reporters seen 15% to 16% drop in the share price.
Let’s scrutinise
whether the impact on the Infosys share is only due to the resignation news or
economical other factors are also responsible. We can judge the same by
analysing the NIFTY50 curve of the same time horizon.
It can be seen
that NIFTY50 is showing the upward trend, indicating the no signs of the any economic
problems. It can be concluded that the drop in the Infosys share price was
primarily due to the news of the resignation by Vishal Sikka.
Now let’s
analyse whether this downward trend continued or Infosys shares jumped back to
its normal shine. I have downloaded the daily share price of the same period
for the year 2018 and 2019.
Due to sound
financial records and dynamic leadership, Infosys share price was bounced back
to the range of 650 – 690 in 2018 and 750 – 800 in 2018 during the same time
period. Now just think, those who have invested in share in 2017 probably at
Rs.410, bagged the profit of 60% in the year of 2018 only. What could be the return
for the same investor in the year 2019?
Being an investor what one should learn?
1. Investment basket having
shares or mutual fund along with FDs, gold and insurance can give us the
maximum or optimum returns
2. When the market is showing
the downward trend, it’s always wise to invest in the company having strong
fundamentals as per one’s risk appetite.
3. Fluctuation in the share
price is most essential and prominent feature of the share market. When it’s
moving upward, it gives opportunity to make profits on earlier investments
while on the downward train, it welcomes the new investors in the market. We
should look at the fluctuations as an opportunity instead of horrified
movements. One should mark right time of entry and exit as well to maximise the
returns.
4. Everyone has different
financial requirements, dreams and goal. It also changes the risk taking ability
of a person. One should not trade in the market under anyone’s influence
instead you should understand your requirements clearly and it’s better to take
the expert’s advice in case of lack of knowledge.
5. It’s good to start
investing in the market from the young age and also to teach the trading
concepts to younger ones also. You can start building your investment portfolio
even with Rs.100 also. E.g. If you missed Starbucks coffee by any reason, you
can purchase the 2 shares of TATA coffee for Rs.80 per share. This will give
you the opportunity to make decisions and analyse the trend of the shares. With
Rs.160, you can enjoy the demo of share trading as well.
6. Indirectly, we can learn
the skill of taking the calculated risk. Young generation can learn how to
channelize the favourable situations and can be more confident while dealing
the situations like loss. “If we don’t give or get the freedom of understanding
the impact of losing the money, then how we can create the eager of making
money”. As stated earlier even Rs. 160 are fine for getting such valuable
lesson in the life. No need to have bags full of cash for learning.
7. Share price fluctuates on
the absorption of news by the investors. It is necessary to get the updates
about the share market to surf on the tide of fluctuations. If you are really
interested start reading the financial news on the daily basis.
8. 1790 companies are listed
on NSE, while more than 4000 companies are listed on the BSE. You must have
noticed that selective listed shares are being discussed in media but one can
create a good portfolio by studying maximum companies as she /he can.
In this blog, I
have discussed about the fluctuation in share price and its trends over the
years. We can yield the benefits in share market with the help of the study and
knowledge about the market. In case of lack of time for acquiring the
knowledge, one can consult the expert from the field as well. It pretty clear
that investment in the share market will be fruitful not only for the personal
benefits but building the strong economy as well.
Let’s understand the share price trend of
the Infosys for the last 6 months.
In this blog, I
have discussed about the fluctuation in share price and its trends over the
years. We can yield the benefits in share market with the help of the study and
knowledge about the market. In case of lack of time for acquiring the
knowledge, one can consult the expert from the field as well. It pretty clear
that investment in the share market will be fruitful not only for the personal
benefits but building the strong economy as well.
Let’s understand the share price trend of
the Infosys for the last 6 months.
It can be seen
that INFY share was declined to Rs.526.45 per share in the month of March 2020.
Good growth in the share price is observed during July 2020, due to declaration
of quarterly results and investments news. Share price has reached the level of
Rs.942.95 per share.
In other words,
we can conclude that risk taking community have made profit of around Rs.300
per share during the last 4 months.
What
you are waiting for? Kindly take decision and start making your own portfolio.
(If
you are comfortable with “Marathi”, the regional language of Maharashtra,
India. Please click the below link to read the blog in native language.)
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