Stock prices fluctuate owing to a combination of changes in intrinsic value or changes in multiples. Multiples change because perceptions about the Company in terms of growth prospects, business quality or longevity change or also because there could be excess liquidity chasing stocks. In the short-run, a large percentage of price fluctuation is due to perception changes. While, at times, there is strong research backing a perception change, sometimes it’s just to do with the mood of the market participants. Sometimes, it is also a self-fulfilling prophecy where the multiples change first, giving more reasons to justify the change to people who take comfort from price momentum leading to a further price movement until the entire thing collapses. This works when stocks are rising as well as falling. Read More
In the epic, the Mahabharata, on the final day of the lessons from his guru, Parashurama, Karna bravely bore a scorpion’s sting while Parashurama was resting his head upon his lap. As the blood from Karna’s thigh trickled down and disturbed the sleeping Parashurama, he realized that only a Kshatriya (a warrior) could bear such pain without a murmur and that he had been tricked by Karna into believing he was a Brahmana (of the priestly class). Karna explained that he was actually a Suta (a mixture of Brahmana and Kshatriya) in an attempt to placate his irate teacher. Furious at being deceived, Parashurama cursed Karna that he would be unable to use weapons, especially the Brahmastra, when he needed them the most. This curse came into effect when Karna was unable to remember the incantation to invoke the Brahmastra while fighting against Arjun on the battlefield.