Dalal Street seems to be in a bearish grip as the Indian stock market has been witnessing a sharp correction for over a month. Both Sensex and Nifty 50 have been trapped, losing more than 10% each from their all-time highs – enough to make even the boldest bulls a little nervous.
Amid this market downturn, top investor Vijay Kedia couldn’t resist poking fun at self-styled 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 yet thought-provoking post on the microblogging 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 seven days. In a bear market, a genius becomes a novice in seven hours,” Kedia wrote, alongside an image depicting this transition.
The illustration humorously depicts the transformation of a novice investor into various roles such as analyst, chartist, advisor, economist and finally a ‘genius’ during a bull market. This tweet resonates with the experiences of many retail investors who are swept up in the euphoria of rising markets, but are harshly reminded of their limitations during a recession.
Bull vs bear market
In a bull market, where stock prices are steadily rising, even novice investors often feel invincible, buoyed by consistent profits and a seemingly endless upward trajectory. This optimism can lead to overconfidence, with many thinking they have mastered the art of investing.
Conversely, bear markets – characterized by falling 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 underlines how quickly sentiment can change in the unpredictable world of stock markets.
The Indian stock market has recently reflected this trend. From June to September, the benchmark Nifty witnessed a strong bull run, gaining 16.6% and hitting an all-time high of 26,277.35 on September 27.
However, continued selling by foreign investors in October and November, coupled with weak earnings and concerns about domestic growth, have weighed on Indian equities. As a result, the Nifty 50 has fallen 10.5% from its all-time high and is entering the correction zone.
Disclaimer: The views and recommendations expressed above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to contact certified experts before making investment decisions.
