Jun 24, 2010

Why Bubbles continue to create?

Why Bubbles continue to create?
People’s memory is short term and they forget how last bubble was formed and prickled.
The sure beneficiary from a bubble like brokers, analysts, corporate wants the bubble. Because simply their profit increases in such periods and decreases when bubble busts or absence of it.

New players:
Every time there are several new players (investors, students, analysts, brokers, fund managers, mf company, foreign financial company, new FIIs, traders etc.) who enter in markets. They generally do not have any past market (bubble) experience and hence no institutional memory.
People with memory and experience have lost in earlier bubble and now out of market.
A big class of so many people with memory and experience start taking things for granted. They either have learned that bubbles do get created and prickled or have become habituated of bull market and bear markets. That is why they do not react rationally and joins the market in way it goes.
Every time different themes are contended for bull markets, but
Posted on Thursday, June 24, 2010 | Categories:


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Posted on Thursday, June 24, 2010 | Categories: