Never believe Forecasts

Today’s Daily Byte

It was indeed a day filled with notable events, particularly in the realm of the Nifty index.

Nifty managed to break out once again, overcoming two prior failed attempts to breach the 22,500 mark. This breakthrough was notably robust, driven by a strong performance in the banking sector. As I’ve often emphasized in the past, when banks lead either a rally or a decline, it tends to be more sustainable.

In the past two sessions, an intriguing development unfolded concerning the US dollar and the Japanese yen. . . .

Reading Time : 4 Minutes

Markets have a mind of their own

Understanding stock behavior can be a perplexing endeavor for even seasoned investors. Often, stocks defy expectations, moving in directions opposite to what many anticipate. This phenomenon highlights the unpredictable nature of financial markets, where trends can shift unexpectedly, leaving investors scratching their heads.

Price vs. Earnings: A Divergence

Consider the case of Tech Mahindra, which saw a 40% decline in profits, yet its stock surged by 14%.. . . . .

Reading Time : 2 Minutes

Never believe Forecasts

Forecasting in financial markets often leads to more confusion than clarity. A simple glance at the probability of Fed funds rate over time reveals the futility of such predictions. In just three months, the projected interest rate for the next year shifted dramatically, highlighting the unpredictability of market forecasts.

With each new meeting and economic update, the forecast for future interest rates undergoes significant revisions. What was once projected to be between 3.5 to 4% in January shifted to 4.75 to 5.25% by April. These constant adjustments create a moving target for investors, making it challenging to base decisions on such forecasts.. . . .

Reading Time : 2 Minutes