Lehman bankruptcy, Merrill Lynch acquistion, Global Meltdown – Are we doomed?

Original post at http://theindiastockmarket.blogspot.com/2008/09/lehman-bankruptcy-merrill-lynch.html

Meltdown of the markets following the lehman bankruptcy and Merrill Lynch acquistion, on one hand, provides an opportunity to pick up some of the blue chip stocks at attractive prices but I think only the bold and the experienced can have the heart to get into it. I, as a novice, was in double mind whether to pick up stocks and continue with my strategy of value averaging or just give up on investing altogether.

With the markets so bad and never ending shocks I had to think hard whether investing in stocks is such a sensible option after all. I know for sure that the markets can be very different in another 2 years time but the emotions were stronger than logic. Even though I was confused I did manage to pick up a small piece of Reliance Industries. But I learned something for sure during this past year – its no use listening to all the analysts out there. They seem to know as little as what I know.

Beginning of the year there was a herd shouting that the Sensex will reach 25k and just a couple of months ago there was another herd that predicted oil reaching 200 dollars. Where the fuck are these people and on what basis do they predict things.

Its very obvious that analysing the global environment and the performance of an index and that of companies are so god damn hard and, maybe, impossible that many of them were just guessing. I agree with some studies that some of the successful managers were just plain lucky and if you hold stocks for a long term then stock picks from a novice like me can outperform these highly paid and knowledgeable professionals.

Maybe I am just overreacting at how greed of these big banks and institutions is causing so much distress. They are not at fault totally since I also got into stocks to earn double figure returns and its in, well, most of us. They are also human so we can forgive them.

I truly think that the world is getting complicated all the time, people dont like things simple anymore. Otherwise why the need for such complex financial products? And people are now more materialistic, we are never satisfied with what we have. We perenially want better devices, better returns, better lifestyle, bigger houses, bigger paychecks and so on. I have the feeling that we, humans, are paving the path for our own destruction. Its clear everywhere you see!!

RK

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