India Vs Englad. India Wins! Markets go up!

A trader friend of mine who is lives, eats, drinks Cricket has a theory.

Here’s what he says – “In next few hours India plays against England. Tendulkar scores big 100 and India wins! And markets will go up starting Monday”

Sachin Tendulkar Hits 100 - markets go up next day

Sachin Tendulkar Hits 100 - markets go up next day

Stock market sometimes reflect what will happen in future, but most of the time there is disconnect from real world. Market is made up people and people have emotions. Emotional areas inside our brain are all near each other. Our decision making process always gets influenced by quality of our mood. Feeling low means making decisions with less objectivity.

Let me give example:

scenario one) India looses match badly. Funny looking Gadaffi from Libya (I have no idea where Libya is on map) said he will fight back — “this is not good. I don’t feel good – if my shares go down, I am going to sell them before I go home”

Emotions mess up our economic decisions.

scenario two) India Wins match, Sachin made a extraordinary century. Now Gadaffi from Libya says that he will fight back — “Man this Gadaffi fellow is a big fool. Anyways let me see how my shares do today. Most probabaly it’s goign to be flat or good day for everyone. I am going to stick to my plan

Markets are going through lot of after effects from Libya, 2g scam and what not. Many stocks which have nothing to do with these news and events, are getting whacked. Indian markets in short term (couple of weeks) are probabaly going to go sideways (within a range). Any good news that makes them feel good is going to do wonders.

Enter Your Mail Address