What is zero sum game: Game theory is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. A game could be either a zero sum game or non-zero sum game. A zero sum game is a situation in which one person’s gains exactly equal net losses of the other participant or participants. Here one may think of stock market as a zero sum game as for every profit maker there is a counterparty making a loss of equal magnitude. Is it that straightforward or we are assuming few things to call it so? Let us find out.
Foreign Institutional Investors commonly known as FIIs are the companies and some big proprietor investing in the financial market. International institutional investors must register with the Securities and Exchange Board of India (SEBI) to participate in the market. Also, we can say FIIs are those institutions that invest in the assets of different countries other than investing in the countries, where they are situated.
Investment is basically an outlook on the future. On where we expect the next growth phase is going to happen? The assumptions are sometimes based on technical analysis, sometimes on fundamental analysis. More so on insider news, gossips, hear-say, current events or sometimes just plain gut-feel. The historical trend in our country over centuries has been Gold, Gold and Gold. Over the last few decades, Real Estate has become a major pick for most of the affluent class.
Securities market is bound to have crests and troughs. It’s a cycle of tremendous falls and amazing rises. Backing on recent history, 2007 was an amazing year for the Indian market followed by major downfalls in 2008. It took some time to bottom out completely and came back stronger to become one of the top performers in the Emerging Markets segment. Among all BRIC nations, India market outperformed all others with a whopping 26% in 2012 and even bettered it in 2013. Several triggers such as recovery of Global Markets, reduction of Global Commodity Prices and Foreign fund inflows have boosted the Indian economy overall.
It is often observed that traders tend to be attracted towards building complex strategies that process a huge set of instructions built into their algorithm. Several books are read on statistics, technical analysis, fundamental analysis, algorithm building etc. that promise winning strategies.
It’s a rainy day in a distant town secluded from the busy life of Mumbai. Because of very heavy showers, the streets are completely vacant. With the crumbling economy and poor employment, everybody in the town is in debt and everybody lives on credit.