Friday, November 4, 2011

Stay cool ....

Dear Readers,

There was a long gap in blog postings due to some personal issues and related change in schedules. I wished to complete this post even months back, but delayed to this point of time. Any way, will try on frequent interactions.

Lets talk on the ongoing phase of market. Most of our Portfolios are facing considerable loses at this juncture, especially those who started investment in last couple of years. Few of us burnt fingers by unloading entire holdings with serious loses. The second category exited well in advance at profit counters and sitting on good cash as well waiting to green the rest, the third, who are still accumulating in small batches as well averaging selected, but their trusted scrips at lower levels. All these groups are right with their own level of understandings and reasons.Transitory loses are a part of equity investment like always and its true that no one with out a history of mislay could survive the market.  But we required to adopt a positive attitude, need to prepare a confronting mood to loses for a credible recovery. Things are easy to say, but to implement a systematic but tough strategy mixed with extreme patience and dare is exasperating in practical, but not impossible.  There is no point of panic, if you have good faith on the stocks you are holding; even they crashed heavily in the current down turn. But ensure that, the crash is nothing related to stock/company specific issues. We must have to keep a higher level of  patience and sometimes it test us for long duration. Things will surely come bright with in few months and its inevitable in Indian scenario.

Markets always respond in an exaggerate manner to both moods, positive or negative. Some negative developments are there, but I feel, all these does not worth to create such an extreme panic stage especially in Indian scenario. There are no real frantic issues to feel upset on these entire crisscrosses. You can simply digest this point, if recall and analyze the history of our highly dynamic market for past couple of decades. Remember, it’s the same market which rocketed some 2000+ points in a single day after oath of the ongoing UPA Govt under Manmohan Singh. Market simply responded in a dazzling manner on a hollow but positive political news thread. And miserably, we know how things turned and how those so called optimistic rulers are ruling on us, harassing the public, testing our patience at their best.

Market’s positive responses to such spontaneous news were extreme and we need to consider the reverse too and is always hanging on indices. News on any kind of political instability, spurt of a war, unprecedented climate changes, serious terrorist activities or like ongoing global issues, or anything can create a deep sentiment and bring down the market to unexpected levels. But always the then sentiment, only sentiments reflects on indices. People, especially who falls under the trading fraternity practices drastic sells or buys in response to initial but overstated news threads by media with out absorbing/analyzing the reality.  And every time, people who responds in panic, burns their fingers. I strongly believe, nothing happened other than emotions, my point is, no matter of panic, except some temporary emotional concerns driven by media.

Substandard symptoms on global financial indicators especially related to Europe & US as well their serious debt issues are the visible aspects for the current down turn.  RBI’s certain maintenance activities adding fuels at times and like always, the factors works on indices rather than facts.  The unquestionable US economy and few Europeans are under big question marks and fading their charm. The so called muscular US economy is suffering serious internal injuries and struggling for survival. The European scenario is also not promising with countries like Spain, Italy and Greece.   The emotional impact is spreading gradually and reflecting on world wide key indices. DOW downed some 5.5% in a single day in a moaning Monday of August 8. Some European indices crashed more than 20% and keeping the downward trend, Indian market and our BRIC mates also lost around 15-20% at their key indices and moving directionless.  And recently the Occupy Wall Street movement is got fired and spreading its arms. 

We can have a sincere look back on the previous slowdown era and can analyze the reasons with simple lay-man logic. Considering the US, Japan & Europian issues, the so called recovery symptoms were mostly fabricated. It was something like, a heavily damaged vehicle made ready to run forcibly with poor techniques. The interesting fact is, nothing less than an overhaul can run those vehicles again. This time it is irrecoverable for them, especially for US, Japan & few Europeans. The ongoing weakness in the labor market, low economic growth and untenable amount of debts are high degree concerns. It seems, all the above economies may possibly stay in poor health at least for next 3-4 years, even if they succeeded in managing curative measures. Simply, the recovery will take considerable time to reinstate things. That’s too, if everything, the counteractive measures worked out on a deliberated and disciplined manner. Recovering from such financial concerns are time consuming and there is no short cuts other than media hype, what they practiced last time.  The damage of the vehicle was not really solved, now it demands nothing less than a full fledge overhauling and it will take considerable time.

It seems, a credible set up is developing to rationalize the positions of those so called inflatable financial powers. Yes, countries have real inner strength will come forward, and we are there at a significant position.  Keep in mind that, all these market disorders are hardly related to any Indian standards or concerns on its growth measures, but purely external. Its true, we have unrivaled negatives, like heavily corrupted politicians, uncontrollable population, political instabilities at times, frequent terrorist outcomes, alarming inflation figures, disturbing interest rates and related qualms, but our economy is still intact and at an emerging phase.  In other words, India is not going to face a slowdown, but side effects rather than serious infection. Remember, the side effects must reflect on indices for the interim.

I would like to alert you all, who searching the bottom or confused on an entry point, the bottom level is unpredictable like always and investors who jump with big figures influenced on amid sucker rallies will surely burn their fingers. Its the history and tendency of every bear season. Be vigilant, searching the bottom of any bear market is a worthless effort. It always swallow as much traders/investors in its mouth with alluring short term recoveries making them feels a come up of  new  bull season…Bear market works like a defunct rat trap, which can shut we rats  in full or sometimes partially. Waiting the right opportunity to get out once the shutter relaxes, staying idle for a full opening or get out with cuts and bruises….

Comment please .... Happy investing & regards ....


The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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