Well, I do not know anybody who knows anybody who has made money by doing market timing.
so said Sir John Templeton. He not only created good amount of wealth, but also looked after his health, and lived till the age of 95…
Now there is a big army of ‘Investor Education Experts’ who are advertising :
– they will teach you to identify the points at which the market will go up or down
– they will teach you market movements (charts) and share price movements (no fundamentals obviously)
– how to find patterns based on data analysis
– they will give you tools which you can buy or down load
– how to build a trading plan (for everything currency, forex, commodities, and shares)
– how they can build a RETIREMENT plan by doing DAY TRADING.
If I were the regulator, I would come down on this like a TON OF BRICKS. Of course it does not matter to the world what I say. My readers think I am too skeptical, the regulator thinks I do not matter, and these people who advertise do not care about me.
So what will happen?
They will say we will teach you all this for a fee. How much is the fee? well I do not know but it should be in the region of US $ 5-7500. This is not bad and allows them to give you an amount of Rs. 100,000 so that you can trade – so that if you lose that Rs. 100,000 – that cost is included.
Obviously about 100,000 people will enroll. Half of them will start trading.
about 80% of them will lose money in the respective market. Some will lose a lot of money leading to divorce, suicides, fights, etc.
By that time the ‘Investor Education’ camp would have reached many cities, villages and towns.
The ‘trainers’ would have made a lot of money.
They would have sold a lot of software, predicting software, and many such tools which these people would have bought.
WHO WILL TELL THE RETAIL INVESTOR THERE IS NO FREE LUNCH?
IS he looking for free dinner?
What will the regulator do?
Well Sucheta Dalal, Debashis Basu, etc. seem to have common sense to see these schemes but the regulator will NOT DO ANYTHING.
Reminds me of a story:
A beautiful woman goes to a lonely pond – a man made pond. She feels like taking a plunge in the water – and anyway there is nobody around. She looks around and finds nobody.
So she takes off all her clothes…and she is about to take a plunge. ….
Suddenly an officious looking guard comes running to her and he is panting…and he says ‘maam you cannot take bath here’.
She says ‘You saw me taking off the clothes…why did you not tell me earlier?’
He says: Maam there is no Rule here saying you cannot take off the clothes.
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