Red Indians were in search of the new chief after the demise of their experience Chief. They all decided to elect the chief’s son who was well educated. However the new boss never had any skills on predicting the weather or any other such things. It was autumn.
The Red Indians on the remote village asked their new Chief if the winter was going to be severe or mild. He could not predict how the weather was going to be looking at the sky. However he looked at the data and noticed that the winter was harsh at that particular month and hence he told his tribe that the winter was indeed going to be as bad as it was in the previous year and hence instructed everybody to collect wood to prepare for the winter.
Being a shrewd leader, he decided to get some help from the research analysts who work in the weather forecast department. He went to the phone booth, called the National Weather Service and asked, “Is the coming winter going to be bad?” “It looks like this winter is going to be terrible,” the meteorologist at the weather service responded. Buoyed by the answer the Chief went back to his people and asked them to be prepared for severe cold winter and told them to collect even more wood.
A week later, he called the National Weather Service again. “Is it going to be a cold winter?” “Yes,” the man at National Weather Service again replied, “It definitely will be very severe one”. Now the Chief was confident about his instructions. He once again went back to his people and ordered them to collect every scrap of wood they could find.
After Two weeks, he called the National Weather Service again. “Are you absolutely sure that the winter is going to be very cold?” “Absolutely,” the man replied. “It’s going to be one of the coldest winters ever.” “How can you be so sure?” the Chief asked. The weatherman replied, “The Red Indians are collecting wood like crazy!!”
This is how the market analysts in the media predict the movement of the Nifty. None if them has skill set and they are just like the new Chief of the Red Indian or the analyst working in the National Weather Service. There is no evidence that their predictions are right but the retail investors waste their productive time in the media. None of the media experts or the so called independent analysts knows how the market is going to behave- next day, next week, next month or the next year.