Dismayed

A few days ago, I read a news story on SEBI directions to Media companies about ‘Private treaties” between these companies and companies coming out with public issues. It seems that the media companies entered into agreements with companies which were planning issue of shares to public. Under the agreement, the media allowed the issuing firms to place advertisements in the media and in exchange, provide shares of the company to the media house. So, the ads were placed at no cost, instead the company gave shares to the media company. Now services in exchange of equity is fine, but when the receiver is a media house, then a lot of questions are raised.

SEBI has now directed the media companies to disclose such agreements. This is fine. But, what about past agreements? By accepting such shares, the media becomes an interetsed party in promoting the company. They are no longer a neutral reporting entity. Such acts cast a long shadow on the reputation of media personalities. When the media describes an IPO as worthwhile or similar, was it giving an honest opinion or was it trying to push the value of shares owned by it?

I am dismayed when I come across such news. It seems that 120 crore Indians are surviving somehow amidst a sea of corruption.

Poll Results Summary

Here is the final result of a poll taken over six days, ending on Aug 28.

Correction continues

One of the underlying principles of technical trading is: markets will correct.

The corrections will not come on demand, but they are inevitable. just when ‘everyone’ said that 5500 has become a new base, the Nifty decided to fall. Today morning as I write this, the U.S. markets have gone down overnight. Asia is lower and the Nifty may well test 5350.

I feel there are two trades in the Nifty: First, a sell on rally for a test of 5350 or lower. Second, the bounce from whatever lows are made. I usually take only one side of the trade (long or short, ignoring the signal for the other side) but these two trades seem to be worth taking.

I cannot say if we are in ‘the’ correction. We may well be. If this is the normal down move after an intermediate uptrend, then we should expect 500 to 600 points of decline from the top, eventually.