When I was in school the movie 300 fascinated me and I am sure you too have not missed it… even people who do not like violence, wars, politics & rage appreciated it. The movie was rich in VFX technology and it was the first time we saw blood flying, true grey emotions & huge war scenes come alive. The same is happening, when media discusses market corrections. Look at the headlines… Markets & Bloodbath are used so extensively… and mostly all media houses are involved.
Market corrections are like VFX-d, blown out of proportion & shown like terror.
Everytime markets lose a few points “Blood on Dalal Street” or “Bloodbath in Markets” is a front page title.
I have previously written how markets are emotionless, how can you blame them bloodthirsty? Imagine the psychological image it projects in the mind of investors.
- Don’t you think using term like bloodbath or carnage is not good for investors learning to cope up from the decrease in interest rates?
- Do you think one would advise his son or daughter to make a career in this field?
- Do you think any sane person will invest if you tell them the investment they are investing can shed blood… investor’s blood?
Look at the screengrab when I searched bloodbath in markets term in google.
The so-called market corrections & bloodbaths
Market corrections have spoiled MARKET’s image – Courtesy Media
It looks like the market is some psychopath, violent person who finds pleasure in spilling blood.
Now, I am not accusing media that they are doing it knowingly.
In fact, the first person who had coined (or copied from foreign media) would have been a genius.
But the fact also remains that other bozos are just copying-pasting to create sensation because brazen emotions sell.
Blood sells… or at least attracts eyeballs. The sadist part is attracted to pain… someone else’s pain.
How calling markets bloody impacts?
You want to buy a new car and you go for a test drive. The car salesman – a brilliant young guy explains you only the security features of the car.
You ask for the performance like mileage, top speed but he says all these are of no use as “safety” is the most vital aspect.
He then narrates you cases of road accidents, when a car overstepped and fell in a valley or when an overspeed vehicle had a head-on collision on the highway.
Will you buy?
What he is saying is not untrue, but he is showing you the bad side only.
He is not telling you that safe driving and a safe vehicle are perfect for protection.
Similarly, when we have an entire class called as the devil, the other asset classes tend to enjoy. Look at the Bank Deposits Vs Mutual Fund Ratio in India!
Till six months ago we had an interest rate contraction, but bank deposits increased on a YOY basis.
Many investors remain underinvested or invest in products with returns less than inflation.
In fact, very few people have shares of business houses.
They buy products which are just wastage of money and time – like endowment plans or plots of land.
Similarly look at property prices! They fluctuate and correct too. But it is a general perception that one never loses money in real estate. People often ignore illiquid feature just for safety misconception.
Gold prices, interest rates, property rates, and currency exchange rates too have their ups and downs…
But no one calls it a bloodbath.
So why a correction in Equity a Bloodbath?
I have already written a few articles on equity & power of equity investments.
Here are the links:
What Wine Cork Industry Tell About Equity Investing
Do Not Rent Equity- Own it
Equity Investing is a Marathon NOT a Sprint
Best Investment in Long Term – Equity Investment
Equity Performance – What Lies Ahead In 2017-18
Market Corrections : A Fire Drill Activity
Hope media understands that market corrections are normal phenomenon helping the system. Also maybe they still do something to change the images of markets in common man’s mind.
