Sentiment in financial markets Essay Example | Topics and Well Written Essays - 1750 words

Sentiment in financial markets - Essay Example But if you have no feel for what the expectational environment is, you're kind of flying blind. You might have a good feel for the fundamentals and the technicals, but very often it's the expectational backdrop that makes the difference. For example, many investors are frustrated because they own a stock and the stock's earnings meet or perhaps even exceed expectations. And lo and behold, the stock goes down and people are at a loss to explain why. But for other stocks, the earnings come in and exceed expectations, and the stock skyrockets. Why the difference The reason is sentiment. Very often, the sentiment had been excessively bullish before the positive earnings report. In the days before the announcement, there may have been a heavy accumulation of call options. So there is a lot of anticipatory buying of the stock, which then pretty much has run its course when the earnings come out. But with these and other measures, you must wait until they get to some kind of extreme level before they carry contrary implications. For example, when everybody who could potentially be bullish is already bullish, then essentially most of the buying power in that particular market has been dissipated. At that point, the market becomes very vulnerable to selling because there isn't enough buying to offset the selling. Similarly, if only a very, very smal... Perhaps they have even shorted the market. That means the market has become more primed to move upward because if buyers should come in they will not encounter much selling pressure because the selling has already occurred. So imagine a poll today that says 80 percent of futures traders are bullish. Remember that people, whether futures traders or individual investors or market-letter writers, tend to be trend followers. Their opinion tends to be a reflection of what's going on in the market. So if 80 percent are bullish that doesn't mean that the market is at its peak. No. 1, you would expect them to be bullish, and, No. 2, they can always get more bullish. I think this points out a trap that the bears have fallen into. They've noticed signs of bullishness, namely the amount of money that's flowing into mutual funds, the investment clubs, the Beardstown Ladies' books and so on. You get into trouble when a market is in a powerful technical trend and you analyze it without reference to the fact that you expect people to be bullish in a bull market. When a stock rises on positive earnings, which also occurs often, there may have been a lot of concern about the earnings report and investors may have bought a lot of put options, or shorted the stock. Without a measure of sentiment that is accurate, you can go down all kinds of blind alleys. Some of those who have been bearish on the stock market will tell you that there are many more investment clubs than there were 15 years ago, or that mutual funds now outnumber the stocks on the Big Board. These are all good cocktail-party things to talk about, but they're not really measures of sentiment that have parameters associated with them. They're just anecdotal. Academic

Leadership - MAO ZEDONG Essay Example | Topics and Well Written Essays - 2000 words

Leadership - MAO ZEDONG - Essay Example The story of Mao Zedong is one the Chinese reflect on to date. People understand that the situation of his growth to a national figure started by the decision to make a difference in the society. The idea was to allow people to understand they had rights. He wanted to show the society that even peasant farmers have a voice when it comes to making the choices within the society. He was born to wealthy farmer. From the beginning, Mao took up the nationalism sceptre as his guide towards the issues taking place within the organization. In many sessions, Mao was willing to lead the people towards a revolution and create a platform that would give them a say in the issues of the society (Shuyun, 2006). However, upon taking the leadership, he created the People’s Republic of China and stated that one party, the Communist Party of China, would control it. This reduced the participation of the people because only those accepted at the party level would have a chance at the leadership levels in the country. He played a psychological card that made it easy for him to consolidate his leadership in the country after taking up his position as the leader of the new republic (Shuyun, 2006). He wanted to see the country develop and his idea of the great leap forward was to see the country better managed, developing, and increasing its appeal to everyone across the world. People would get a chance to participate in the growth by learning new skills that would be essential for the general improvement of their lives. This set the country apart towards the achievement of greatness (Chang, & Halliday, 2005). A variety of leadership styles can be used to define the life of Mao as a leader of the great country of China. At the very start of his journey towards meeting the ideals of his people as a revolutionary, Mao was using a contingency theory of leader. Here, the leader knew that the only way of making it work in the country was by changing the leadership styles to