‘Genius in 7 days, beginner in 7 hours’: Vijay Kedia on investor psychology during market swings | Stock Market News
Source: Live Mint
Dalal Street seems to be caught in a bearish grip, with the Indian stock market witnessing a sharp correction for over a month now. Both Sensex and Nifty 50 have taken a tumble, shedding over 10% each from their record highs – enough to make even the boldest bulls a little jittery.
Amid this market downturn, ace investor Vijay Kedia couldn’t resist poking fun at self-proclaimed market ‘gurus’. These are the novice traders who, during a bull run, suddenly think they’ve cracked the code to wealth and start doling out advice like seasoned veterans.
In a witty, but thought-provoking post on the micro-blogging website X (formerly Twitter), Kedia humorously shed light on the psychological journey of investors during bull and bear markets.
“In a bull market, a beginner becomes an analyst, chartist, advisor, economist, and genius in 7 days. In a bear market, a genius becomes a beginner in 7 hours,” Kedia wrote, alongside a graphic that depicted this transition.
The illustration humorously traces the transformation of a novice investor into various roles like an analyst, chartist, advisor, economist, and finally, a “genius” during a bull market. This tweet resonates with the experiences of many retail investors who find themselves swept up in the euphoria of rising markets, only to be harshly reminded of their limitations during a downturn.
Bull vs Bear Market
In a bull market, when stock prices rise steadily, even novice investors often feel invincible, buoyed by consistent gains and a seemingly endless upward trajectory. This optimism can lead to overconfidence, with many believing they’ve mastered the art of investing.
Conversely, bear markets – characterised by declining stock prices – often bring a harsh reality check. The confidence of even the most seasoned investors can be shaken as market volatility erodes profits and exposes the fragility of investment strategies. Kedia’s observation underscores how quickly sentiment can shift in the unpredictable world of stock markets.
The Indian stock market has recently mirrored this trend. From June to September, the benchmark Nifty experienced a strong bull run, gaining 16.6% and reaching a record high of 26,277.35 on September 27.
However, persistent selling by foreign investors in October and November, coupled with weak earnings reports and concerns over domestic growth, have weighed on Indian equities. As a result, the Nifty 50 has dropped 10.5% from its all-time high, entering correction territory.
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