What is the first thing that comes to your mind when you think of the stock market?
Have I correctly guessed a few?
Considering the fact that the stock market is associated with money and equity and other similar things, it’s not too hard to imagine what a person would think of on hearing the words “stock market”.
But let me ask you something.
All the aforementioned things are without a doubt, extremely important. However, isn’t it kind of boring?
I mean, if the stock market is all about the money, doesn’t it get kind of dry and mundane?
So advertising these facts isn’t the best way to attract amateur investors, is it?
Once you understand the thrill of share investing or trading, you’ll be hooked and nothing else will matter anymore.
How would you attract potential investors, though?
This is where I come in.
All of you know what the stock market is about and what happens there. So I’m going to tell you about some of the lesser known, more interesting facts about the stock market.
Let’s get started then, shall we?
When do you think the idea of a stock exchange first came up?
That’s right. Stock exchanges have been around since the fifteenth century. The first stock exchange was set up in Antwerp, Belgium. But it was an informal market.
Of course, this was a much much watered down version of the stock exchanges we know and love.
Another milestone in the history of stock exchanges was in 1602, when the Dutch East India Company set up the Amsterdam Stock Exchange to ease trading. Amsterdam stock exchange was the first formal stock exchange in the world.
Something to think about, right?
This one is going to make you guys proud.
In terms of the number of listed stocks, the largest stock exchange in the world is the Bombay Stock Exchange with 5,689 companies. The National Stock Exchange has around 1,750 listed companies.
Of course, in terms of market capitalization, the New York Stock Exchange has us beat by several light years.
But still, it sounds good, doesn’t it?
I don’t know about you, but these terms innate to the stock market, have always perplexed me.
Ever wondered how they came up?
The terms “bear” and “bull” are thought to have originated from the way these animals attack. The bull generally thrusts its horns up in the air, while the bear swipes downwards with its paws.
So, if you picture a bull or a bear attack without cringing, you’ll actually get a very clear picture of the movement of the stocks and the whole point behind these seemingly nonsensical terms.
If you don’t know bulls and bears of the stock market, then you can learn more about bulls and bears here
If you had thought stock brokers and stock traders are all about the numbers and pure black and white logic, think again.
Ironically, you’ll find a lot of traders and brokers tend to be superstitious.
Of course, you can’t really blame them. When you’re dealing with truckloads of money on a daily basis, it doesn’t really hurt to have Lady Luck on your side.
October is considered to be the jinxed month as the two worst stock market crashes both happened in this very month.
The first occurred in 1929, when the stock prices declined by 25%. By 1932, the value of the shares was just a fifth of what they were in 1929. This landslide started in the month of October.
The second occurred in 1987, when the stock markets declined by a fourth of their value. This too, happened in the fated month of October.
Now do you say where the apprehension about October comes from?
Even though India has a bursting population of 1.252 billion, it turns out most of them aren’t really into stocks.
Do you see why I’m writing this blog now?
In 2013, India reported annual household savings of 22,124.14 billion INR.
Can you guess how much of that was invested in the stock market?
A meagre 2% of this enormous figure entered the stock market in India.
Isn’t that just sad?
It turns out most people in India prefer to invest in gold and real estate, rather than our beloved stocks.
I’m sure you guys have heard of Warren Buffet.
I mean, he’s one of the most well-known and most successful stock market investors ever. He’s also an American business magnate, investor and philanthropist.
Oh, and most importantly, he’s the 3rd richest man in the world right now.
Do you want to know how he got rich?
Warren Buffet was quoted saying that he’s owned between 400 and 500 stocks in his life, but he made most of his money on about 10 of them. The rest were just fodder.
I am not making this up.
The man said so himself.
So it’s really not that hard, is it? Any one of you could be the next richest person of the world.
Oh, and the most expensive stock in the world right now?
Warren Buffet’s Hathaway, Class A.
It’s priced at an unthinkable 2,13,330 USD per share. The reason for such a high price is that the company doesn’t split its shares.
We all know about the “dot-com” bubble and its subsequent burst in 2001, but financial bubbles have been around for much longer.
Have you guys heard about the Wall Street crash in 1929?
It’s actually called Black Tuesday nowadays.
Very dramatic, I know. But it can’t really be helped, can it?
This crash is the worst in the history of the United States. The market actually lost $30 billion in the span of two days.
Can you believe it?
There was also the time in 1711, when the shares of the South Sea Company collapsed in the midst of a huge bubble.
Scary, isn’t it?
When asked about the founders of Apple, the first person that comes to mind is Steve Jobs. I mean, the man is Apple, right?
The second co-founder, Steve Wozniak, AKA (Also Known As) Woz, is also quite well known.
The third co-founder is a man named Ronald Wayne.
This man left the job after a mere 12 days. He sold his stake for $800 in 1976.
Guess how much his stake would have been worth today?
If only he had had a little more confidence, right?
What do you think affects the prices of stocks?
Company performance, investor confidence and a number of related factors, right?
I have another to add to the list.Cricket.
A study conducted by Monash University, Australia, has shown that there is sharp and significant decline in stock prices the day after India loses a match. The fall in stock prices after a loss is more than seven times the movement after a win.
Now for the icing on the cake.
When Sachin Tendulkar is involved in the losing match, the market goes down 18% more than when he is not involved.
We Indians are crazy, aren’t we?
Have you guys heard about Rakesh Jhunjhunwala?
He’s an investor and trader. He’s also the 53rd richest person in India, with net assets worth 2.2 billion USD.
This man started investing with Rs. 5000. 25 years later, he converted that to Rs. 8000 crores.
Mr. Jhunjhunwala bought 6 crore shares of Titan when it was priced at Rs. 4
Today, each share of Titan is worth about Rs. 355.
I will leave it to you to figure out exactly how much he gained.
As you can see, there’s a lot more to the stock market than what meets the eye. It’s a place of intrigue, opportunity and incredible adrenalin rushes. And the only way you’ll experience or even glimpse any of it is if you delve deeper into the wild yourself.
So don’t lose interest if you don’t succeed the first couple of times because I promise you it gets better. Keep researching and keep investing.
Oh, and if you want to add something or express your opinions, feel free to leave a comment. Happy trading/investing!