Wednesday, February 19, 2025

Suppose there are no sell orders...

 Suppose there are no sell orders for a particular stock. In that case, it means there are currently no sellers willing to part with their shares, which could lead to the stock price increasing significantly as buyers compete for the limited available shares, potentially causing a situation where your sell order might not be executed and you could be stuck holding the stock until someone is willing to buy at your desired price; this is especially true for thinly traded stocks with low liquidity.

Key points about a situation with no sell orders:

Price Increase:

Without sellers, buyers will need to offer higher prices to entice anyone to sell, potentially causing a rapid price increase.

Order Not Filled:

If you place a sell order, it might not be executed as there are no buyers to match with your offer.

Low Liquidity:

This scenario is most likely to happen in stocks with low trading volume, where finding a willing seller can be challenging.

What can you do if there are no sell orders:

Adjust your price: Try lowering your selling price to attract potential buyers.

Use a market order: If you need to sell immediately, consider placing a market order, which will execute at the best available price (which might be significantly higher due to the lack of sellers).

Wait for market conditions to change: If the stock is not urgently needed to sell, you can wait for increased buying interest to create more selling opportunities.

This is AI...

"If everyone buys at the same higher price for an asset, the price of that asset would likely skyrocket due to a sudden surge in demand, creating a "bubble" effect where the price becomes significantly inflated beyond its actual value, potentially leading to a market crash when the bubble bursts as people try to sell at a profit, causing a sudden drop in price as sellers outnumber buyers.

 

Key points to consider:

Supply and Demand:

The fundamental principle of markets is that when demand exceeds supply, prices rise. If everyone is buying at a higher price simultaneously, it creates an extreme imbalance in favor of buyers, driving the price up rapidly.

Market Manipulation:

This scenario could be considered market manipulation, where coordinated buying activity artificially inflates the price of an asset.

Bubble Formation:

When a large number of people buy an asset at a significantly inflated price based on speculation rather than intrinsic value, a "bubble" forms.

Market Correction:

Once the bubble reaches its peak, sellers will likely start to outnumber buyers, causing a rapid decline in price as people try to sell their holdings to avoid further losses, leading to a market correction.

Example:

Stock Market Bubble: If everyone decides to buy the same stock at a much higher price due to hype or speculation, the stock price could rapidly rise, creating a bubble that eventually bursts when investors lose confidence and start selling."

 

If a large number of intraday traders set the same limit sell price for a stock, it would likely create a significant selling pressure at that price, potentially causing the stock price to rapidly drop as the market struggles to absorb all the sell orders at once, leading to a potential price drop and difficulty in executing all sell orders at the desired price; essentially creating a "sell wall" at that specific price level.

Key points to consider:

Market Liquidity:

If a large volume of sell orders is placed at the same price, it can quickly overwhelm the available buy orders, leading to a significant price drop as sellers compete to offload their shares.

Order Book Impact:

The order book will show a large concentration of sell orders at the set price, making it difficult for buyers to find willing sellers at a higher price, further pushing the price down.

Partial Execution:

Depending on the market conditions, not all sell orders may be executed at the desired price if there aren't enough buyers willing to take on that volume at that specific price level.

Market Volatility:

This scenario could create significant market volatility, especially if the stock is already experiencing high trading volume or is considered to be a "high-beta" stock.

Potential Strategies to Mitigate Risk:

Spread Out Sell Orders:

To avoid a large concentration of sell orders at one price, traders can place their sell orders at slightly different price levels to create a "price ladder."

Market Orders:

In extreme situations, traders might consider using market orders to ensure their sell orders are executed quickly, even if it means accepting a potentially lower price.

Monitoring Order Book:

Closely monitoring the order book to identify potential imbalances and adjust sell orders accordingly.

High Beta Stocks in Nifty - List of High Beta Shares in NSE (2025)A high beta stock is a stock that is highly volatile, meaning its value fluctuates more than the market. These stocks are riskier but can also be more profitable.

What are the characteristics of high beta stocks?

They have a beta coefficient greater than 1

They are more likely to experience large price swings

They are often associated with sectors like technology and biotech

They are often issued by small and mid-cap companies

Why are high beta stocks risky?

They can result in significant losses during market downturns

High risk does not guarantee high returns

Who invests in high beta stocks?

Experienced investors who want to create wealth through stock market investments

Investors who are comfortable with volatility and are seeking potential higher returns

How to consider high beta stocks?

Consider your risk tolerance and financial goals

Weigh the potential for higher returns against the heightened risk of significant losses

Align your investment strategy with your risk tolerance and financial goals



Wednesday, January 29, 2025

“Nothing is permanent in Economics or, in Life, in the short-run, there is more upheaval, the effort is to make the long always bright... "

Nothing is permanent in Economics or, in Life, in the short run, there is more upheaval, and the effort is to make the long always bright... we move in cycles... Good and bad are repeatedly followed by each other... Low base increases expectations..."

 

“According to recent data, India ranks around 133rd globally in terms of GDP per working hour, indicating a relatively low labor productivity compared to other countries; with an estimated GDP per working hour of around $8.

Key points about India's GDP per working hour:

Low ranking:

Due to its low labor productivity, India is positioned near the bottom of the list when compared to other countries.

Source:

This information is based on data from the International Labour Organization (ILO).

Long working hours:

Despite long average working hours, India still has low productivity per hour worked.

High productivity means high supply...

In economics, "productivity" refers to the efficiency of production, measuring how much output is produced per unit of input (like labor or capital), while "supply side" refers to the policies and factors that influence the ability of an economy to produce goods and services, with the primary focus on increasing the productive capacity of an economy by enhancing productivity through measures like investment in technology, education, and deregulation; essentially, supply-side policies aim to boost economic growth by increasing the overall supply of goods and services in the market, often through improving productivity levels.

Key points about productivity and supply side:

Relationship:

Productivity is a key component of the supply side of an economy, as higher productivity means more output can be produced with the same amount of resources, leading to increased economic potential."

 

Masses are not conscious of their power ... if prices are high they shall exercise the choice of alternative... if they lower demand and price expectations... firms would increase supply... which would lower actual prices...

 

"Inflation expectations are the anticipated rate of inflation that people expect to occur in the future. These expectations are based on people's perceptions of how prices will change over time. They are important because they can influence current economic decisions that can affect actual inflation outcomes.

Here are some ways that inflation expectations can affect actual prices:

Firms

If firms expect inflation to be higher, they may raise prices of their goods and services faster.

Workers

If workers expect inflation to be higher, they may demand higher wages to make up for the expected loss of their purchasing power.

Consumers

When people expect inflation to increase, they may spend more and save less.

Inflation expectations are a crucial factor in monetary policy decisions. Central banks should consider both long-term and short-term inflation expectations."

 

Supply creates demand... Suppose supply has to be increased and demand is delayed during high inflation. In that case, RBI must lower inflation expectations which could be self-fulfilling while maintaining high interest rates which could result in actual low inflation and increased demand... Low prices increase demand and price expectations and vice versa... It is the nature of prices to be volatile due to changes in demand and supply... Nowadays inflation moves between a target as set by the central banks, they are responsible for creating price expectations by investors and outcomes. The problem arises when outcomes are not as per expectations due to uncertainty... People try to avoid loss and increase gain, and the central banks, too...

We should not forget that depreciation could increase imported inflation, especially oil prices, as it increases inflation expectations..." Depreciation is ok, but depreciation expectations may delay exports and increase imports... Depreciation and appreciation expectations might increase exports and delay imports..

Domestic inflation indeed increases depreciation and expectations... The mechanism keeps exports competitive in the face of higher domestic prices, to keep the relative exchange price of exports stable... Though the original goal is to lower domestic inflation wages and interest rates to make exports competitive... Inflation and depreciation mean an uncompetitive domestic economy...

Economic growth depends on the expectations that the available data creates. If the expectation is that there would be a rate-cut cycle in the short run, people could delay demand and increase supply -which could lower inflation expectations.." "In the long run, it would increase demand and inflation expectations...

 And, the internet information has been handled at lightning speed, too... 133 becomes 126 and 2.8 becomes 7.6 ... This productivity growth is not reflected in supply and prices or inflation... There is one more important thing ... These days they use RFID chips to harass honesty... This is a real experience... Beware telling the right..."

 

"Productivity and inflation have an inverse relationship, meaning that higher productivity is associated with lower inflation. This is because more productive workers produce more goods and services at a lower cost, which increases supply and decreases prices."

 

In 2016 when Raghuram Rajan left the productivity growth rate fell from 9.5% to 2.8% in 2023 continuously... I do not know if he supported demon-etisation...? Probably not... he left inSep...2016..."

Education and knowledge lead to innovation... INDIA's capital productivity also stands at the bottom... It simply means lower prices and higher demand... The argument is that we are a labor-surplus economy therefore we need to specialize in labor-intensive lines of production, but capital-intensive investment means technology-rich and lower cost of production and prices which could increase demand and price expectations... Saved labor could be further used to increase production and lower prices using scale economies... Education, technology, and skills could also be imported... which are necessary for innovation and higher productivity, supply and higher demand more profits... The budget should promise completely free education for the poor with food... with only one Board with a uniform education code... If necessary attract foreign investment...

This is one of the reasons for high inflation 10% and 15% inflation tells nothing if it is on a low base... It is the relative experience of prices vs wages and real wages or savings ... We invest what we save at the micro level... If growth is not happening for the unit or subject what we could expect at the aggregate level... The economy needs excess supply and more savings... more investment and demand... and more investment in innovation...

 

"After 2014, however, real wages stagnated or declined. In rural areas, agricultural labourers' wages dropped by -1.3 per cent annually, and non-farm rural wages fell by -1.4 per cent annually during the second term of the Modi government.13 Jan 2025"

 

"India's GDP per capita at PPP is $10,233, and Rs 8,50,000 doesn't show the actual case."

 

"जिसमे देश में महंगाई 5% की दर से बढ़ रही हो 10 साल में 50% सफाई हो रही हो मुद्रा के मूल्य में तो यह सप्लाई साइड प्रॉब्लम है... सही है... क्यों की उत्पादकता दर के मालमे में भारत बहुत निचले पायदान पर है l विकसित देश की बराबरी करने में भारत को 150 साल लगेंगे l वैसे भी जहाँ तक बचत का सवाल है उसे दुगना होने में 14 साल लग रहे हैं, FD में l रियल इंटरेस्ट रेट 5% के हिसाब से l""भारत के स्टॉक मार्किट की स्तिथी और धरातल पर अर्थव्यवस्था की स्थिति वस्तुस्तिथि से कोसों दूर है ऐसा होता रहे गा l लोगोंको तैयार रहना पड़ेगा l"

 

"Hame ye samjna padega ki sarkar business karne ke liye nahin hoti... kalyan ke liye hoti hain... Profit is not the motive of Govt... Govt is extracting dividends from RBI... Never heard this news in comparison... High taxes tell the real story... Dosare ke mehnat ke paise par ham ammeer horahe hain, vo garib ho rahe hain..."

 

"When there are expectations of higher prices in the future, it typically leads to a decrease in current supply on the supply side, as producers tend to withhold some of their product to sell at a potentially higher price later on, causing a shift leftward on the supply curve; essentially, meaning less product is available in the market currently."

 

"We want a budget that lowers inflation expectations and increases supply or we can say that one increases supply that lowers inflation expectations and increases savings... We do not want a budget that spends more we need a budget that lowers prices relative to income... and investment and more supply and get the expectations and feel of becoming rich overtime and spending... Lower inflation also increases savings..."

Wednesday, January 1, 2025

"Everybody is worried about rate cuts and nobody for lower interest rates on savings, when all save and few borrow..."

Growth is sacrificed when the value of the money is sacrificed because spending goes down due to inflation, and people buy less due to high prices. However, inflation expectations may increase spending which further increases inflation. Normally, people expect inflation to go up in the long run because they assume that the population would increase, but experience from Japan shows that advanced stages of growth increase supply, and demand goes down due to a lower population growth rate, US, Europe too... However, if the central banks increase the value of money by increasing interest rates it may help create low inflation and expectations people could delay spending and actual inflation would be low which means higher demand... Lower prices are more expansionary, it is the law of demand...

 

This age monetary policy has missed the goal of increasing savings and, then, investment... The people whose savings are invested are poorer than the people who are using their resources... This is a partiality... Wealth is being destroyed by using inflation as a policy... Central banks must target low prices by higher interest rate, it is the only way to create real wealth..."

 

The inflation expectations have been stable around five percent, but the RBI wants lower inflation expectations for low inflation and continued expansionary policy... The central bank shall target value for money by maintaining prices/inflation to increase/decrease demand/supply to achieve full employment, and growth, and expectations... Our ultimate object is price stability with full employment...

 

"Household savings had touched a peak of Rs 23.29 lakh crore in 2020-21 -- the year which saw the second wave of the Covid pandemic. Following that it has been on a decline. It then fell to Rs 17.12 lakh crore in 2021-22 and further to Rs 14.16 lakh crore in 2022-23.9 May 2024. According to the National Account Statistics 2024 from the Ministry of Statistics and Programme Implementation (MoSPI), net household savings dropped a massive ₹9 trillion over the three years leading to FY23, now standing at ₹14.16 trillion.30 Oct 2024"

 

In the US, Fed wants investors to expect no rate cut in hindsight and continue to invest, a rate cut is not expected until an exception arises that it wants them to not delay spending in the expectation of a rate cut and lower cost... A strong dollar makes imports competitive and could boost domestic demand for imports... A strong dollar increases exports uncompetitiveness... Probably others are not imposing higher tariffs on US exports... Dollar is very costly..."

 

RBI is now more concerned about inflation expectations due to investment demand and spending and rate cuts, while consumption demand is lagging due to higher inflation and also due to higher interest rates... If interest rates are maintained or increased a little it could help lower inflation and lower prices increase demand and spending... A lot of consumption demand would increase... It would also help the capitalists who save more than common people... Interest rates have lost the lustre as wealth creators... Real interest rates are 2% pa and if we calculate the speed to double investment it will take 72/2% years is 36 years all because of inflation, same for debtor... People have moved to more risky assets... Lower interest rates are an important concern for risky investment... Inflation and expectations to increase spending is rejected by the law of demand which says lower prices increase demand (and growth) and higher prices actually lower demand... Its a mirage...

 

If the RBI increases interest rate to 15%pa prices would definitely go down to 3%... Business is done by rich.. it would not matter much. It would make people rich real incomes and wealth would go up... demand and growth could increase if people understand this... Good old days of double money after five years... Higher demand would also create employment...

 

Industry must reduce consumers' prices and cutting rates is just an artificial remedy, high interest rate expectations could lower price expectations which means more supply and actual low prices... Low prices would increase demand and growth...

 

The only way to increase profits is to increase scale or sell more and more without increasing prices and reducing demand... Without innovation, a firm could increase investment to lower average cost due to cost inflation and prices... Lower average costs and prices would increase demand for exports... one could sell more... The ability to invest more is quite an advantage in business...

 

Low price expectations could increase supply and lower actual prices... Low prices increase demand... and growth expectations... also due to a low base... This is done by every business... During inflation when demand is low low prices could help increase demand... also if due to high interest rates...

 

INDIA is not demand deficient which makes the fundamentals strong but supply-side is weak, inflation tells... High inflation expectations have also reduced supply...

 

Demand is low due to high inflation... higher prices low demand... When demand is high we need a high supply which could be carved out with low price expectations, high inflation expectations would not let supply materialise, people may hold or spend less or save more for the future... High inflation reduces expenditure/spending... Year over year demand would go down or have a very low real income or growth rate... Like real interest rates... With 2% real interest rates rates it would take 36 yrs to double deposits... Poor people would work their whole lives to double their wealth... INDIA needs a 2% inflation target to increase the real growth rate and high interest rates to lower price expectations and increase supply... Capitalists save more than common people... Even if the RBI maintains the status quo it could lower demand and price expectations and increase supply which actually could reinforce low prices...

 

Lower prices increase demand and growth... Interest rate cuts do not increase consumption spending, though demand for loans might increase... Increasing consumption spending may require low prices or inflation... People could also delay spending in expectation of lower rates which could lower demand and growth in the short run...

 

Rate cuts are literally possible when we have inflation and expectations between 2-4%... Savings are down too by Rs 9 trillion which could lower the credit multiplier and demand also due to higher interest rates... Higher interest rates and savings are important for lower prices and higher demand and economic growth...

 

As far as, inequality will always be there because people who are poor today take time to become rich and by that time, the rich will be a lot richer... The only way to reduce inequality is to increase interest rates on savings and investment. This would be reaped from the capitalists and given to the masses, though capitalists would also gain by interest income on savings... Higher interest rates would also lower inflation and expectations and low prices increase demand and growth, poor people would also save a lot... While other things remain constant, low prices with sufficient employment would increase the real value of money and demand and supply and growth and expectations... This could be a better way of income distribution... Not only, taxing the rich, but timely distributing it to the poor makes the goal complete, the outcome would be lower equality and poverty... Higher interest rates could definitely help create long-run wealth and lower prices and expectations could make the process self-fulfilling...

 

The economy is finely divided into producers and consumers, and a rate cut would benefit the former, while a higher rate would benefit consumers in the form of lower prices and higher interest on savings which would also increase demand and employment. Politically mathematics supports consumers, though capitalism is a part of the economy, but governments are run by numbers and money... Political favorism and donation are common... Favoring the rich is unjustified on political and economic grounds... It is simply not feasible...

 

 

Suppose there are no sell orders...

 Suppose there are no sell orders for a particular stock. In that case,  it means there are currently no sellers willing to part with their ...