Experts' Predictament

“Prediction is very difficult, especially about the future”, said Niels Bohr, aptly.

For this predicament faced by experts, in making a prediction, I have coined a new word, “Predictament”.
hurrah – I just coined a new word!
That's how much I love neologism!)

However it doesn’t deter experts from sticking their neck out to indulge in crystal-gazing of sorts and make those prophesies, that forecast the course of future events or results. We have just seen the psephologists take centre-stage during the electoral process that just got underway. Equipped with a great deal of information in their chosen field of study, they boast of possessing various techniques to predict the outcomes of the polls. The season offers them ample airtime to showcase their skills and put forth their own “verdict” – not before putting forth several possible scenarios and the most likely outcome and their reasons for their choice.

Well, this is generally the time, I am itching for those zoozoos to come up and provide the much needed comic relief. Anyway, finally all that matters was the real results, which came to us live all of yesterday – we finally have a car without the “Left-Hand Drive” sign tagged to its rear! The shear thought of handing over the brakes to one party, the accelerator to another, the steering wheel to yet another gives the citizen enough fright to ride such a vehicle. We are glad that such not being the case, all that is needed is to have some wheel-alignment check done before continuing on our journey of reform and progress.

Though experts in every field are entrusted the task of envisaging what lies ahead, it is the stock market experts that have drawn my attention and held me in a vice-like grip for several years now. Be it the Annual Budget, the monetary policy, the foreign trade policy or the election results – how will the markets react to the various possible scenarios is something that this bunch of enlightened professionals embark upon before each such event.

Predicting the course of the stock-markets, indeed is like handing over a car fitted with a windshield mirror instead of a glass and asking a Formula One champ to drive it based on how the road wound and swerved behind him! The poor fella’s got to figure how the road will turn in front – there is no way he can peep into the road ahead and neither is anyone driving back in the opposite direction to ask him for some tips. At least not until the time machine becomes a reality.

So I like these smart chaps coming one after the other and tell us, “If the Sensex crosses 13000, it will see 14500 and if it slides below 11500, it will see 10250”

“I don’t know why people are not buying into the markets – the fundamentals are really strong!”

“I don’t see buying coming until the bottom has been formed”

Well, the hunt for the elusive bottom at the bourses is something that is every investor’s fancy. “Do you see a bottom?” “Is the bottom in place?”

“If all goes well the bottom is behind us!”

Listening to all this, it appears that anyone of us could be those experts! If you can figure out the bottom by the time the artist is working on the shoulder, I suppose I could handle that!

The recent rise in the stock markets – the run up from Sensex at 8k to 12k before the announcement of the results is a case in point. It reminds me of the comic dialog by the legendary comedian Asit Sen ,who characterized his funnies as a stockily built man swinging his arms as he walked and talked slower than his movements. In one of his movies, he enters the room of the Sethji seeking his permission thus:

“Kyaaaa main andar aaaaaaaa saktaaaaaaa hoooooonnnnnnnn?
Arreeeyyy, main to andar aaaaa bheeeee gayaaaaaaaaaaa...!” (Hindi, for "May i come in? Oh, I have already come in!")
as he stood in the center of the big room in front of the Sethji!

This is how the markets had already climbed up before we knew they were bouncing back. And that indeed is their Predictament!

Often, when we watch the news on any non-eventful day the market has surged a couple of hundred points and my wife asks me “Why did it go up today?”
“Because it had gone down too much, I suppose” I reply.
Let alone predict, I cannot even explain why the markets went up or down after the event. The entire fun is in not knowing, I suppose.

Blogger’s Postscripts:
1. For once, I will be able to tell why the market went up on Monday 18th May 09 – because of the prospect of a stable government at the centre! But will my wife ask?

2. Just when I was typing out this piece and a suitable heading for it, the idea of coining the new word came to me – it was my Ah-ha moment!