As I was sitting around reading various things over the week I was struck with a few oddities. So, here is my take on what I read recently and how it fits with what I see as life around me.
Like, I read in the Business Insider, that India has the lowest cost of living in the whole world. Now that really had me sitting up from the slouched position on the couch that I had assumed while reading! Whats this I wondered and how can it be true? Every passing month it only appears that the money that I assign for various expenses always comes up short. How can that be happening if cost of living in India is the lowest? We are better than even neighboring Nepal and Bangladesh and far away Tunisia and such other inconsequential countries. So how come I don’t feel that way? Then I had a sobering thought. Maybe the amount of money that I am earning month is going down? Could that be it? Before going down that road and panicking, I thought it better to change the subject that I was reading about.
Like, at this time of the year, everyone worth their salt in the markets reads the Berkshire letter. That is mandatory reading. You are not anybody in the market if you cannot quote what Buffet says and it doesn’t matter whether you follow FA or TA. Or even astrology. Buffet’s word is even higher than God’s. How many people really see the overall message I wonder. Why is this letter such a talked about event, have you wondered? Is it because he is who he is? But then how did he get to be there? The only answer is deep study and constant practice and loads and loads of patience. Now, I wonder, how many of those who says that they read the letter without fail really have those qualities in them- to study extensively, to practice constantly and to wait for the return to come to them. I would wager, a very small number. So Buffet’s letter, is just another piece of reading material for them, then?
Like, talking of patience, why is everyone so hung up on this word with respect to the Fed statement? Everywhere I read the accent was on whether the word patience would be in the statement or not! How sublimely ridiculous! As though, Yellen’s entire policy approach depended on this one word. And what does it really mean? Has anyone defined what this patience really meant in the context of the Fed statement? Is it a few years or maybe just a few quarters or maybe a couple of months? What is the point in getting hung up on a word when no one truly knows what it means exactly? Seriously, sometimes the market gets into the strangest of the fixations.
Like, people write about option OI concentrations as supports and resistances for the Nifty as though it is some sort of rule that works at all times in the market. This is one of the oddest ways of finding levels in the market. I find it quite fascinating as to how many of these ‘derivative’ analysts blindly believe that OI concentration at a strike is all shorts and hence it would be defended. Time and again we find that such levels are breached without any difficulty. And nothing pretty much happens. But still this practice persists. I don’t really recall reading any author on options writing in his book that we should look at OI concentrations as potential supports and resistance levels. They can be broadly indicative of some localized interest of some players but to convert them into fixed supports or resistances and to convert it into an analysis variable, I think, is a disservice to those that follow such ‘ analysis’.
Well, I guess the markets are full of oddities and we are all responsible in making many of them into what they are. We need to think of what we are doing. But perhaps, that is asking too much in this age of instant gratification? I am perhaps being anachronistic about it? Point for me to ponder, I suppose!