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akashgobari · 3 years

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Hello everyone, it’s been a lot since i posted my last post.

So i’m here with a new post regarding STOCK MARKET.

In this post we are going to know about STOCK MARKET MANIPULATION, INSIDER TRADING,

How do some people exploit the STOCK MARKET?

What are the adverse effects of theSTOCK MARKET on a person and on society at large?

These are the things that people rarely tak about. But these things are very common

In every industry there is BRIGHT SIDE AND DARK SIDE both. Since, we all are well aware with bright side of it. So in this post we are going to talk about “DARK SIDE OF STOCK MARKET!!”

Many of you invest in the STOCK MARKET, so I’m not saying that the concept of STOCK MARKET is wrong, but the things that I’ll tell you in this post will force you to think from a fresh prespective and you’d be able to make better decisons when you invest your money in the STOCK MARKET next time.

COME LET’S SEE:

Have you ever thought about it, friends?

1. What is the need of STOCK MARKET?

2. Why do STOCK MARKET exist?

3. What would happen if STOCK MARKET ceased to exist?

There is a simple and common reason behind all these questions. The reason is like:

Large companies need huge ammounts of money/funds for big projects. An ammount of money that no individual owns singlehandely. So, through STOCK MARKET, people invest their ony in companies, so that companies gets funding for major projects and for new innovations and in exchange for that, people get a share in the company’s owonership.

It means that when the company earns good profit in the future, you can get a part of it too. But the the company incurs a loss, you have to bear the risk.

So this is the basic funda behind the working of the workings of the stock market. But if you look at the stock market from the prespective of a commom individual, a common investor looking to invest in the STOCK MARKET.

Suppose you are an investor that wants to invest in STOCK MARKET. And you have the options of hundreds of companies. In which company would you invest your money? What would you consider before investing?

The answer is simple “You’d ask which company would give you the most profit. For the money that you’d invets, which company would give the highest return on investment?”

Which company would you bet in this gamble?

If I tell you that I have secret information about this Company X, that this company would soon get a bog funding due to which, its stoc price would increase rapidly in the future, so you should invet in Company X. And if I give this secret information to you only, wouldn’t this gamble be unfair for the rest of the people? Because they don’t have this secret information that the stock price of this company will soon go up.

So friends, this is the game of “INSIDER TRADING.”

Generally speaking, “INSIDER TRADING means making a profit by using such information, that is not available to the public.”

This ‘insider information’ can be leaked by any insider whether they are the employees of the company, or an executive of the company or the accountant of the company. If they use this information to invest in stock market, then it would be unfair. It would be Insider Trading. And if they tellthis information to a friend or an outsider that is not a part of the company even then it would be termed as Insider Trading. But it is not illegal to reveal this imsider information in all cases.

Let’s take an example of journalist. If a journalist is carrying out an investigation,and for that, he is analysing the insider information of tha company regarding the earning data or the profit loss data,that aren’t publicly available, it is legal doing that beacuse the journalist is looking at the insider information only for his story as a job. But if the journalist, during the course of his investigation, comes across the information that such and such accounts of the company are managed in a way that it can be reasonably predicted that the stock price of the company would go up or go down, and the journalist uses the information to earn a profit, then it would be a INSIDER TRADING.

Now you’d wonder that who’s checking if you friend is working in a company and he tells you the ‘insider information’ secretely and you use it to make a profit without anyone knowing.

True, it is quite difficult to track these things. And for this reason, stock market manipulation like this is very common. Not only in INDIA but in the rest of the world as well. In fact, not only this to prove this type of stock market manipulation, that crime has been committed is extremely difficult. Because there is lot of ‘grey area’ in between. You can give a ‘n’ number of resons for hiding your crime and there in no solid proof to prove that.

If insider trading type stuff is done by Large companies then think how unfair it would be for the common investors.

Let me use a real-life example to explain this.

“Goldman Sachs’ alleged Aluminium Scam.’

Actually what happened is that a branch of this bank is involved in aluminim production and they controlled the supply of aluminium in such a way that the demand of aluminium keeps on increasing and so does the priceand then thee invest in the Aluminium Futures because they basically can predict the future prices of aluminium.

So this was about how insider can illegally exploit the stock market.

But common investors too can exploit the stock market by using the method THE PROFIT GREED

As while investing the money in stock market most of the investors primarily think about the profit. That means the rest of the aspects are merely ignored. Whether the company is doing good work, whether the ecosystem of the company is good or not, whether the impact of the company on the world is good or bad, these things are completely forgotten by most of the peoples.

Let’s take an example for this:

“let us consider a company that performs cost cutting process and cuts down on the employee’s salary or fires some employess, and the other employees are working at explotative salaries, doing so is good for the profits of the company, nore money is saved by the company means more profit and the investors of the company gets more profit. So they consider the practise good for them nut ultimately they are promoting/encouraging company to treat employees worse”

Similiarly there are various more examples like environment exploitaion.

Investing in such companies encourages them to manufacture greed based products instead on need based products. And that is exploiting the society and market too.

So often people, knowingly or not end up encouraging these things while investing their money.

There is a simple solution to this is that thinks before invest in the stock market about the company, you’re considering investing in.

How are the products of the comapany?

What is the impact of the company on our environment, our society, and on people in general.

Similiarly there are various other methods for exploiting market whic are as:

“HERD MENTALITY

PUMP AND DUMP

BUBBLES AND CRASHES”

HERD MENTALITY simply refers they don’t check the performance of the company themselves, the closig statemnet of the company, what company actually does?

They simple see that their friend/influencer/exp. investor has recommended investing that company. And they go ahead invest in that company.

What actually matters is “How is the buzz surrounding the company?” in compare to “thye actual situation of the company.”

And there is a simple reason behing doing so. “the more people invest in the companywould drive up the share price of the company and you get maximum profits.”

So stock market like fashion. I’d like to wear the clothes that other around me are wearing

The consequence of that is that the stock price of company does not depend on the company’s performance it depends upon the image of company in market and image of the company gets boost up by adds, brand ambadassor etc. Simply, the image of the comapny can be manipulated by using “PR Machinery.”

PUMP AND DUMP simpley refers to creating hypee for a particular stock in market.

“PUMP AND DUMP is responsible for max. Frauds occur in market and also for crashingthe market/company ”

For eg: if i holds majority of share of a CompanyA at very low prices and then, I go and pay news channels and print ads, make trend in social media, Urging everyone to invest in that stock, performs positive publicity a lot to create hype for that stock in market so that more people invest in that and the stock price of Company A goes up. I get a lot of profit and then i sell off my stocks. Suddenly the stock price of the company would crash.

This scheme is called as ‘pump and dump’ scheme.

Same thing can be done reversibly in pump and dump scheme

That reversible method basically includes ‘short selling’

Under this you bet that company going to be crash in future and if this happen then you can earn profits over it. This practise is mainly done by “beers of stock market”

Let’s take a real life example of it:

In sept.2018 the price of INFIBEAM AVENUES share fell by 73% when rumours were spread over WHATS APP aboy corporate Governance issues in this company. Investor wealth of 9200 CR.RS (92billion INR) was wiped in a day when the share come crashing down.

This was’t an indicator of performance of the company but id happen because it is so easy to spread rumours and people work as herd mentality in stock market.

Combining the above 2 methods i.e,’herd mentality and pump & dump’ will give rise to “BUBBLES AND CRASH”

Under this company get bankcrupted at sudden when the stock price gets rapidly incresing.

Consequences of BUBBLES AND CRASH is worst

This basically lead to the crashing up of whole share market and often it may lead to economic crisis.

The global economic crisis of 2008 is the biggest example of BUBBLES AND CRASH which was created by US Housing Bubble.

After the 2008 Economic Crisis, people had raised their voices against ‘Wall Street’, and had even protested. People questioned that how it could be that the stock market is manipulated ny these large companies in their favour and it is the common investor that bears the losses. On the top of that people found it irritating that the government has bailed out these large comapnies and banks. Even after all they had done.

It is said that “BITCOIN” was invented just after this as decentralized tool. People were fed up with the government’s central control over banks and the economy.

So it was said to be major reasons for making Bitcoin.

BITCOIN will not be controlled b any central bank or central agency. It will always be a decentralized tool and will create an alternative financial system.

Variuos more methods for stock market maipulation like: “planting moles, defame by using media outlet, a big MNC can aspects his various branches like controlling supply of things”

In general, there are ‘n’ ways for stock market manipulation. And many of them are valid for cryptocurrencies as well like ‘pump and dump scheme’. What is the major advantage over BITCOIN investment is that there is no scope of ‘insider trading’ in cryptocurrencie like BITCOIN because it is a decentralised thing. It is not controlled by central company. So no central company can maipulate it in way that stock prices are manipulated.

Despite of all these things i will not say that don’t invest in stocks. It is not so.

It’s only that you should keep these things in mind . you need to be conscious about those things that all these things happen and how you can avoid them.

THINK AND MAKE BETTER DECISIONS😊

#finance #stock market

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akashgobari · 4 years

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THE UNIVERSE

The universe is a vast term which cannot be described in one blog but I will try my best for giving you explanation about universe in a very simplest way from my Knowledge.

So hello everybody, this is AKASH GOBARI present in front of your with his very fresh blog. I hope you guys will enjoy my new blog.

So starting from very first universe is a combination of different galaxies, planets, stars, celestial bodies, asteroids, meteoroids and constituents of intergalactic space. And the study of universe is termed as COSMOLOGY.

The universe comprises of billions of galaxies. The galaxies are made up of millions of stars held together by the Force of gravity and these stars posses the most of the mass of the universe. Galaxies are giant assemblies of stars, planets, gases, dust and smoke. These stars occur by huge bunches of clusters. They are big so that sometimes they are termed as island universe.

Milky Way and Andromeda are the two most important examples of galaxies. Milky Way galaxy is our own galaxy (also termed as AKASH GANGA) and Andromeda is our nearest galaxy.

Milky Way galaxy comprises of about 300 billion stars and one of them is SUN. Planet and other abject go around the Sun and created a Solar system with the Sun at the center.

Structurally, the galaxies are found in 3 forms.

· Spiral has a central nucleus with great spiral arms. Milky Way and Andromeda are 2 examples.

· Elliptical without spiral arms.

· Irregular with no shape.

HITTING POINTS FROM HISTORY OF STUDY OF UNIVERSE

· In AD 140, Ptolemy propounded the theory that the earth is center of the universe and Sun and other heavenly bodies revolve around it. Later on the theory given by Ptolemy were proved wrong.

· In 1543, Copernicus said that Sun is the center of universe and not the earth.

· Kepler supported Copernicus but said that Sun is the center of Solar system and not the universe.

· In 1924, Edwin Hubble first demonstrated existence of galaxies beyond Milky Way.

Evolution of Universe.

The three main theories put forward to explain the origin and evolution of universe are

i. Big Bang : (Proposed by George Le Maitre further explained by Stephen Hawkins) Big Bang was an explosion that occurred 13.8 billion years ago, leading to the formation of galaxies of stars and other heavenly bodies.

ii. Steady State Theory: Bondi, Gold and Fred Hoyle developed this theory and states that although the universe is expanding, it nevertheless does not change its appearance over time and it has no beginning and no end.

iii. The Pulsating Theory: According to this theory, the universe is supposed to be expanding and contrasting alternately i.e., pulsating. At present, the universe is expanding.

So with all this, this is AKASH GOBARI ending up this blog.

And join me socially on my social media profiles:

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#universe #universefacts #likealways #share #theblog #akashgobari #blog #universeblog #save

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