Economics assumes that human beings are rational. But human reactions to stock market movements are utterly irrational.
When markets rise, everybody cheers. When markets/stocks crash - everybody moans. A hunt for culprits often ensues.
No such hunt is ever announced when the markets are rising.
In past scams, when manipulators like Harshad Mehta and Ketan Parekh sent share prices through the roof, they were hailed as geniuses and became celebrities.
Some market experts cautioned that the markets had shot up to insane levels. But this plea for sanity was widely dismissed as stupid, and ordinary housewives and college kids bought frenziedly in the belief that share prices could only go up.
However, when the markets inevitably fell, the hero-manipulators were suddenly denounced as villains. They were accused of the dreadful sin of rigging markets, and thus misleading small investors.
Ironically, no investor complained as long as the manipulators rigged prices upward. The complaints began only when the manipulators were unable to rig markets any more, and prices crashed.
Truth be told, the real public complaint against Harshad Mehta and Ketan Parekh was not that they manipulated prices upward, but that they failed to manipulate it upward forever.
For that, this could not be forgiven.
The underlying assumption of small investors is that share prices should rise forever. Now, if the price of rice, sugar or petrol rose forever, the small investor would complain bitterly. Yet he seems to think it perfectly fair that share prices should go up forever, and very unfair if share prices crash. How greedy and hypocritical humans are!
They want Petrol@30rs ltr bt BPCL @900
They want call@1 paisa per second bt RCOM@700
& so many examples
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