Gambling your Way to the Market
If you have the money and would like investing it in the stock market, you would do well by studying first the market. It is important for you to know the stock market behavior and the factors that would influence it. There are some who consider investing in the stock market as some sort of a gamble. That the stock market behavior is just too unpredictable and winning or losing in the stock market will depend on pure luck.
People who considers investing in the stock market as a gamble believes that the market cannot be predicted as to the course it would take at any given time. They think of the market as some sort of a rudderless boat floating by its lonesome self without any set of direction to take. You will be lucky if the tide sets the rudderless boat or stock market behavior in your direction but if not, you lose.
Indeed, because of their belief that investing in the stock market is some sort of a game of chance, there are stock market investors, who would even go to the extent of consulting their horoscope before doing their trade. Many Chinese stock market investors even have Feng Shui experts guiding them when to invest or trade in the market.
The Feng Shui Experience
A clear case of this situation wherein investors of a stock market believes that the stock market behavior is simply erratic, random and governed by luck and even by the positioning of stars and other unseen forces such as Feng Shui was demonstrated in Hong Kong when Financial Secretary Henry Tang presented Hong Kong’s Budget for 2004/2005.
He made his presentation in a televised coverage. The Finance Secretary was dressed in a dark suit, white shirt and with a corresponding tie maroon red in color. While he was making his TV budget presentation, the TV screen bottom crawler which indicated real time Hang Seng Index performance, started dropping until it dropped to a low of 180.41 points.
Many Chinese stock market investors who have seen the precarious drop of the Hang Seng Index, which is Hong Kong stock market Index, blamed the entire stock market behavior to the colors of the Finance Secretary outfit during the time he made his TV budget presentation.
They pointed out that the colors of water represented by dark blue or black and metal which has white for its color and fire for red and maroon colors are simply against Feng Shui. This is what triggered the very bad behavior of the stock market when the Finance Secretary went on TV, they said.
Economist on the other hand would simply dismiss this behavior of the market as brought about by the color of the Finance Secretary’s outfit due to bad Feng Shui. They reasoned that it was not Feng Shui that made the market behave badly. Rather, it was the belief of the investors in Feng Shui that made the market went down. Thus, in effect, it was human attitude which was fear that caused the market to behave badly.
To point out, they noted that while the Finance Secretary was on TV, many investors watching the proceedings were calling their brokers to sell shares rather than buy because they believe that the colors of the Secretary’s outfit carries ominous and dire consequences to the economy because it contradicts Feng Shui, while all the while discussing the country’s budget for the year. And because of instant communication through mobile phones, there was suddenly a deluge to sell that even while the secretary was still on TV, the Chinese belief in Feng Shui became evident with the heavy downward spiral of the stock market, all because of his color choice of tie, shirt and suit.
Market Behavior and Public Perception
This clearly shows that the market behavior is determined by the public’s perception that will have anything to do with the economy. As many successful stock market traders would say, trading is not determined by gut feel but by how any news or information will affect your gut. In effect, they are saying that a market behavior will depend on the present environment and on the public’s perception of the near future.
Seasoned traders debunk the idea that stock market behaves at random and there is really no basis for predicting its movements by using whatever forms of analysis. They reasoned out that just like its human conceivers, the market behavior will depend on the fears and greed of its maker in relation to material wealth and resources as affected by natural factors. History repeats itself, so does the stock market charts that continuously show similar patterns since the late 60s.