Are futures markets necessarily evil? An interesting comparison between onions, that don’t have a futures market vs. oil, that has a really deep one.
Author: shyam
“Recently, some countries and organisations have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs,” Infosys said in a recent filing to the US Securities and Exchange Commission.
“Legislation in certain countries in which we operate, including the US and the UK, may restrict companies in those countries from outsourcing work to us or may limit our ability to send our employees to our client sites,” it noted.
“If either the US federal government or another governmental entity acquires an equity position in any of our clients, any resulting changes in management or re-organisations may result in deferrals or cancellations of projects or delays in purchase decisions…,” the filing said.
Infosys raises concerns on negative sentiment about outsourcing – livemint.com.
In interviews with more than two dozen fund managers, bankers and traders, no clear cause emerged for the plunge in price. Market players were unable to identify any single bank or fund orchestrating a massive sale to liquidate positions, not even an errant trade that triggered panic selling, as seen in the equities flash crash last May.
Rather, the picture pieced together from interviews on Thursday and Friday is one of a richly priced commodities market — raw goods have been on a five-month winning tear over all other major investment classes — hit by a flurry of negative factors that individually could be absorbed but cumulatively triggered a maelstrom.
Computerized trading kicked in when key price levels were reached, accelerating the fall.
“It was a domino effect,” said Dominic Cagliotti, a New York-based oil options broker.
via Special report: What really triggered oil’s greatest rout | Reuters.
“The reality of risk is much less simple and straightforward than the perception. People vastly overestimate their ability to recognize risk and underestimate what it takes to avoid it; thus, they accept risk unknowingly and in so doing contribute to its creation.
“Risk arises as investor behavior alters the market. Investors bid up assets, accelerating into the present appreciation that otherwise would have occurred in the future, and thus lowering prospective returns. And as their psychology strengthens and they become bolder and less worried, investors cease to demand adequate risk premiums. The ultimate irony lies in the fact that the reward for taking incremental risk shrinks as more people move to take it.
via Hussman Funds – Weekly Market Comment: The Menu – May 9, 2011.
There is a growing trend of market pundits hopping on to Twitter to spread their favourite stock picks. StockViz has collated tweets since the April of this year and put together a leader-board of sorts. The largest twitterer was StocksTips, with a whopping 3140 tweets:
With “India Shining” and all, is it any wonder that most of them were “buys”?
And lastly the sells:
To the active investor, the question is how many of them foretold the most recent market rout? The leader-board for the number of sells after April 25th:
Happy twittering!