Investors are like deer in the headlights

This post rhymes with my earlier post on investor fatigue. Fear and uncertainty are at all time highs. The frequency, intensity and persistence of negative news has frozen people into inaction and made them disengage from financial markets.

We see this phenomenon clearly playing out in the Indian markets. As investors have disengaged, underlying cash market volumes have plummeted. Many stocks outside the top 200 have not traded in weeks and some in months (beyond a few hundred token shares). More...