In many ways, Chidambaram has been grappling virtually alone with India's economic emergency since he became finance minister for a third time 13 months ago. Cabinet colleagues, wayward allies of the ruling coalition and an obstructive opposition have together stood in the way of bold steps that might have averted this year's collapse of confidence in the India story. It is a crisis within a crisis. With elections looming, that won't change anytime soon, which means Chidambaram will find it difficult to take robust policy action if the situation goes from very bad to worse. "If parliament is not able to point to the direction in which the country's economy will go, parliament is not able to agree on, say 10 steps which the government should take today ... what kind of a message will it send to the rest of the world?" he asked lawmakers in frustration last week as the rupee tumbled ever-lower into uncharted territory.
First, similar to standard investment firms, they evaluate companies using quantitative methods. Second, they determine whether a companys earnings increases are temporary or permanent. Third, if the companies have surprise earnings increases, they use behavioral analysis to see the market is underreacting. Since the companies have a history of financial difficulties or are in mature industries, the market suffer from anchoring biases or overconfidence and believe the earnings to be a fluke. Sentiment Analysis One tool fund managers use to capitalize on investor irrationality is market sentiment analysis. Instead of using quantitative methods of evaluating the market, companies such as MarketPsych and Lexalytics mine the news and social media to evaluate trends in the market. Fund managers can then use the information to help determine market attitudes towards certain companies and use this information to locate mispriced assets. Expert Analysis Katsuhiko Okada, Kwansei Gakuin University Institute of Business and Accounting and CEO of Magne-Max Capital Management, uses behavioral finance principles to make investment decisions: Our fund aims to capture Japanese Investor psychology through text-mining the media sentiment in the market. We obtain massive textual data from the news media as well as social media such as Message boards and Twitter. In order to decompose the Japanese text into www.firstfinancialuk.com to an analyzable format, we use technologies developed in the area of Informatics, specifically Natural Language Processing (NLP) area. We then create a dictionary of words defining sentiment. At the moment, we have 6000 words and phrases in the dictionary that determine the sentiment of the investors to each one of the listed stocks in the Tokyo Stock Exchange.