predictability of market volatility

Financial markets in the recent times have foxed the pundits. Volatility is a given, and predictabilty is zero, leaving one to wonder if there is such a thing as a financial pundit. There are so many variables ranging from Icelandic ash to Greek tragedies to senate hearings, to UK elections to the Yuan valuation theories, to almost any financial and non financial behaviour of market players that effect markets all over the world, that it is naive to believe that anybody can predict the future price of an individual security or market.
I read almost all the financial dailies and am a CNBC addict and the confidence with which analysts are making buy, sell or hold recommendations amazes me. I suppose it is easier to make these recommendations with other peoples money and with no responsibility. or skin in the game.
To make matters worse we all suffer from selective memories when it comes to evaluating portfolio performance. The losses that we avoided by not following advice are ignored and the gains and losses arising out of following the same are overweighted.
It seems obvious to me that for for every gain made someone somewhere has to have lost and the overall stock market or bond market is a zero sum game. In fact if you take out the transaction costs charged by he exchange and the intermediaries , the markets are a negative sum game, whether you are long or short over a long period of time.
The only thing certain is the current price. How that price will behave in the future, how much it will change up or down and by how much are pretty much a matter of chance, and nobody has privileged information on that, much as they pretend to fool you with jargon, quantum theory, string theory or random theory. Fact is your maid or driver or your teenaged daughter can make as good a prediction and there is a good chance that they will be right 50% of the time, which is better track record than the so called professional view.
Some of my friends consider me a financial genius and often ask me for stock market tips. The only advice I can give them with confidence is to buy low and sell high. That invariably works.

The Greek tragedy

First it was Iceland. It got financially ruined by investing in toxic waste assets generated by Wall Street. It ended up kicking ash, which disrupted flights across the European skies.

And now a Greek tragedy plays itself out creating ripples across the global financial markets. From a peaceful holiday destination and home to some of the worlds wealthiest, to a financial basket case did not take too long. Did they buy something toxic like the others, or did sell themselves short, or did some other genius from Goldman Sachs custom make the Greek recipe for disaster.

Italy Spain and Ireland may soon follow. And then the entire Eurozone is fair game for short sellers. Regardless of what the learned Pranab Mukherjee tells us, it would be naive to believe that India is insulated. We now swim or drown with the global tides, and as Mr. Buffet says, you can only see who is naked when the tide is low. And the global financial tide is getting alarmingly low.

Asset prices in India, across classes, whether it is real estate, gold or stock prices are all over priced and heavily dependant on foreign capital flows. Global money managers are becoming increasingly risk averse, and will also be under pressure to book profits in the few markets where they are in fact making money, India, unfortunately being one of them.

Duetche Bank is maintaining a price target of 22000 for the Indian market. Are they smoking he stuff that has been recently legalised in California and Colarado? Or are they planning to sell before the tide that is sure to wash up here?

It is better to be a spectator to the Greek tragedy, than have a lead role in the Indian financial tragedy that is buiding up.

BCCI

Does anybody remember a bank that went by the name BCCI? that went bust? Nowadays when one talks about BCCI , it is generally about the cricket board. BCCI the bank eventually came to be known as the Bank of crooks and criminals international. Maybe the Board could use the same expansion as well.
BCCI that spawned the IPL (Pirates League), is now distancing itself from the child and pretending that they saw nothing, heard nothing. They must have at least smelt something. Whatever,... they DID nothing.
Meanwhile the brat they spawned, outgrew the board and is now the tail wagging the dog. Everybody enjoyed the parties, sweated their equity, tweeted on twitter and generally had a blast. Who is complaining? not the fans, not the franchisees, not the broadcasters, not the advertisers, not the sponsors..who was the victim in this crime.
The cricket afficiando will tell you that the gentlemans game of cricket has suffered..Really? The game which was dying a natural death having been replaced by the EPL at the home of cricket in England and in cricket crazy India. The IPL was the last big hope for cricket. And the Board may have landed the last killing blow.
Good riddance to bad rubbish.

Love, sex , drugs and the IPL

For now, i prefer the front pages to the sports and stock pages. Between Lalit Modi and Shashi Tharoor they have created the equivalent of a bowl out in T20 cricket. All the ingredients of love (for money) sex (for glamour) and drugs (for performance) makes this an ideal topic for money and other things.

It has been well known for a long time now that there are curtains behind curtains of ownership of the franchises, and that ownership has nothing to do with the investments. In fact control always was and always will be with the powers that be in BCCI. In this case what probably happened was the Kochi franchise owners, bid a little more than what they were advised to thereby upsetting the apple cart for Ahmedabad who had already paid for and been committed to.

When the proverbial sh... hits the ceiling, a lot of unrelated stuff spills out, such as Shashi Tharoors

external affairs, Lalit Modis graduation from armed robbery to daylight robbery, Sunanda Pushkars nose and other jobs..

Wow...why cant they postpone the rest of the IPL matches so we can pay undivided attention and play the role of cheerleaders for this soap opera?

whose bombay is it anyway?

chetan bhagat and 3 idiots

Yes it is one more issue dealing with money and other things...there is a common understanding in commerce and economics that goes caveat emptor or simply put...buyer beware....but in the case of chetan bhagat and the 3 idiots, the concept has been turned on its head...chetan is claiming that seller should beware....after selling the rights, he is pretending to have some kind of interest in the goods sold. It is like the seller of a house complaining that the buyer has painted it blue. Come on Chetan, you are an ex investment banker, you should know better. You should sit back and appreciate the fact that they made a damn good movie of your plot less book and bask in the reflected glory, instead of balming it on your mother who cried cos she did not see enough credit to you..grow up son.

also Aamir, why get involved? you are just an actor and a damn good one at that..plus you have not even read the book..you did not need to.you just acted out brilliantly the script that was handed out to you..why take sides? it just muddies the water further..

tiger by the tail

Speaking of money and other things, Tiger Woods has it all. Talent, money, a beautiful wife and a string of women. Finally the tale telling women have the tiger by the tail.

After doing it to professional golfers on golf courses round the world, Tiger is finally having it done to him off the course..below par again, of course.

But is it news? For me? No. What he does off the golf course is his business, and now a multi million dollar business for all the females involved. In the feeding frenzy that is sure to follow, I only hope that Tiger remains Tiger on the golf course.

Why does the media go crazy about something like this? It is not as if we elected Tiger to the job of the best athlete in the world. It is not as if Tiger was into performance enhancing (no pun intended) drugs. He just slept with a few women on the side. Thats between him and the women..and his wife. It should be no body else's business.

My advice to Tiger. Dont go on Oprah or anywhere else shooting your mouth off..just let your club do the talking ( again, no pun intended)