EQUITY/STOCK/FINANCE
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FLOATING THEORY
I have discovered this theory i.e. “floating theory” all on a sudden, while thinking over economy, recession, boom, rise & fall of stocks & MARKET CRASH, one evening this theory came to my mind, probably on 10/05/2010 & I jotted it down on 20/05/2010.
The Theory is, in nutshell: - Why recession comes at all? Answer is from Boom.
For a boom is created (or a boom time) due to increase in demand of certain commodities, such as for computerization, change of usage e.g. plastic in place of wood & bio products, mode of connectivity e.g. mobiles, infrastructure spending, government money pumping, loans etc etc, so has to recede, just like in a BLAST, an expansion then a vacuum, if you apply floating theory to it (this situation), as in stock market, you probably know when to abandon the boat/ship or to board.
Floating theory says the higher price is(e.g. stock), the lesser the buyers are(with reducing purchasing power), so if you exit a stock at 25 (supposing you bought at 15), the buyers you will find(number of buyersyour value of money i.e. value of 500 will be reduced to almost 15, that is to today’s value(i.e. 500 will be equal to 15), due to inflation, growth of economy, uncertainty factor & cost of things after 10/20 years.
2. There is always a blast behind a shock wave i.e. a shock wave always created by a blast, so there is always an event behind a BOOM and as a blast wave always comes & goes, so a boom must go, if it is an economic boom or boom in a certain sector, it must go & next cycle will come, but difficult to say when & in which sector in case of economy. Even a keen watcher may not predict perfectly but can foresee probability better.
3. Formula of Stocks:-
—2—4—3—2—3--.
-------a piece of paper floathe wind------.
(digits denote heights & lows).
As a float (a piece of paper in the wind) is very abrupt in its flight path, as shown in above graph, so grip it when as low, reasonably l
Now Buying: Buy, when it is reasonably low, no wait that lower it may go, actually it may dip further down, but don’t wait for future, see the present only.
Know, PAST is dead & FUTURE never comes (i.e. the future one thinks).
A reasonable gain is enough, you may lose too, but that will be a reasonable loss, a bearable loss.
Selling: 15/20(low,grip/hold)--(high,overlook)---------------------------------------------(low,buy)20/25.
Above is only an example, a methodology in general to explain the theory & formula.
Subhro Das
Araria
India
Written 20/05/2010
-----------------------------------.
FLOATING THEORY
I have discovered this theory i.e. “floating theory” all on a sudden, while thinking over economy, recession, boom, rise & fall of stocks & MARKET CRASH, one evening this theory came to my mind, probably on 10/05/2010 & I jotted it down on 20/05/2010.
The Theory is, in nutshell: - Why recession comes at all? Answer is from Boom.
For a boom is created (or a boom time) due to increase in demand of certain commodities, such as for computerization, change of usage e.g. plastic in place of wood & bio products, mode of connectivity e.g. mobiles, infrastructure spending, government money pumping, loans etc etc, so has to recede, just like in a BLAST, an expansion then a vacuum, if you apply floating theory to it (this situation), as in stock market, you probably know when to abandon the boat/ship or to board.
Floating theory says the higher price is(e.g. stock), the lesser the buyers are(with reducing purchasing power), so if you exit a stock at 25 (supposing you bought at 15), the buyers you will find(number of buyersyour value of money i.e. value of 500 will be reduced to almost 15, that is to today’s value(i.e. 500 will be equal to 15), due to inflation, growth of economy, uncertainty factor & cost of things after 10/20 years.
2. There is always a blast behind a shock wave i.e. a shock wave always created by a blast, so there is always an event behind a BOOM and as a blast wave always comes & goes, so a boom must go, if it is an economic boom or boom in a certain sector, it must go & next cycle will come, but difficult to say when & in which sector in case of economy. Even a keen watcher may not predict perfectly but can foresee probability better.
3. Formula of Stocks:-
—2—4—3—2—3--.
-------a piece of paper floathe wind------.
(digits denote heights & lows).
As a float (a piece of paper in the wind) is very abrupt in its flight path, as shown in above graph, so grip it when as low, reasonably l
Now Buying: Buy, when it is reasonably low, no wait that lower it may go, actually it may dip further down, but don’t wait for future, see the present only.
Know, PAST is dead & FUTURE never comes (i.e. the future one thinks).
A reasonable gain is enough, you may lose too, but that will be a reasonable loss, a bearable loss.
Selling: 15/20(low,grip/hold)--(high,overlook)---------------------------------------------(low,buy)20/25.
Above is only an example, a methodology in general to explain the theory & formula.
Subhro Das
Araria
India
Written 20/05/2010
