Monday, March 28, 2016

About the Stock Market

Most Chinese in Singapore would have heard of or are avid fans of the variety show "隐藏的歌手 Talent Singer"

The premise is very simple, each episode revolves around a famous singer plus a few voice imitators. Each round they will be randomly assigned to a closed booth and they will be cued to sing bits of the famous songs from the episode's guest star singer. At the end of the singing, the audience together with various talking celebrity guests will try and guess which is the real singer and vote who they think is the real singer. Upon revealing the votes, the lest voted will be 'disqualified' from the next round of singing and guessing.

Most part of the show revolves around the reactions of the celebrity guests as they talk it out who they think is the bona fide singer. Each episode typically have one 'best friend celebrity' in the mix. More often than not hilarity ensues regardless of their guesses/votes/outcome.

If I could not explain it clearly, please look at the video below. Even non-mandarin speaking people can figure out what is going on more or less.



Apart from the entertainment this show brings about, I would like readers, to understand that this is exactly how the stock market works.

In each episode, it is not uncommon for the original singer to be voted out midway. As more often than not, singer's voice change over time and modern music recording techniques tend to alter the voice through sound engineering and manipulation (aka auto tune).

The people involved:
The singers (original singer and imitators) = the stock counters, their voices are the company's balance sheets/income statements/annual reports.

The celebrity guests = the various stock brokers, financial institutes, big banks who provides commentary on which they think is the real singer.

The rest of the audiences = general investors


How it is the same?
No matter how these singers guess, never have all of them been able to be consistently correct. Even those industry veterans who supposedly have a very good ear for sound, they are able to guess wrongly. And some case, be very very wrong when they even cock-surely declare one particular booth is most definitely not the original singer when it really is.

This has happened all the time, it gets to be even more ridiculous when they try to refer to previous rounds or build confidence based on previous round's results.

The audiences, being non-professionals, will be more or less swayed by the celebrity guests' discussions and votes. Evident by the tabulated results.


Of course, no way is this show going to teach you how to pick stocks, but this show is one of the best ways to show you how the stock market behaves and reacts. It is a good lesson to follow and learn from. Literally, learn how to listen and siphon through the noise.

"Oil price up, stock market will go up"
"Oil price up, USD will go down as commodity is opposite of currencies"
"USD up, stock market will go up too"

These are the three most common fairy dust, magic bean, medicated oil sales pitch used. If history is any indicator...(you complete the sentence however way you want to).


Just so you know...






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