There is an old saying on Wall Street that the market is driven by just two emotions: fear and greed.

One of the best sayings by Warren Buffet is :"Be fearful when others are greedy, and be greedy when others are fearful."

The situation may be critical to understand but then the message conveyed over here is that

Scenario 1

When people are greedy and things go higher.There is a desire in people to make money which ends in selling and when it reaches a saturation level.It starts coming down.Investors get caught up in greed (excessive desire).

Scenario 2

In simple words I can say that the lower things go, or When stocks suffer large losses for a sustained period, the overall market can become more fearful of sustaining further losses and taking advantage of such situation an intelligent investor can buy.

In my previous post as I said USA will lose its AAA rating that means the best one..

It happened actually S&P has reduced their ratings from AAA to AA+ which resulting in plunging of stock markets world wide.

Now i think i should throw some light on AA and AAA+

What Does AAA Mean?

It means the country who holds this rank has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit rating assigned by Standard & Poor's.

what does AA+ means ?

The meaning remains almost the same but it shows high quality, with very low credit risk, but susceptibility to long-term risks appears somewhat greater.

and the bottom line is whether US hold an AAA or AA+ rating, the difference didn't seem to matter and chances of recession happening are 1 in 3 in next coming 6 months.

As far as Indian markets and companies are concerned I think they just over-reacted to the US downgrade.

But they recovered well which was driven by a combination of factors:

The government's efforts to reassure the market with talk of the limited impact of the downgrade on our own growth, some dutiful buying by domestic state-owned players like LIC, UTI and nationalized banks.

Moreover we don't have depreciated currency value and reserves like USA.

Indian economy as well as the world economy wont be hit so hard with this event.Although I came across the fact that hiring by Indian IT's and other banks will be reduced only by 10 % on account of this world crisis.

But this wont have much of the adverse effects on India..

So relax and we should be proud on what we are..

HAPPY INDEPENDENCE DAY...n good luck..:)