Sunday, May 23, 2010

Market thoughts

Dear readers,

The market is again on the same deed of flux. Frequent high pace upward movements or profound falls are usual agenda of the market at present. Such fluctuations are compelling to feel dither on the strength of our market or forced to think as nothing exists as a support. The common investors are panic like always and such volatilities placing them in a troubling environment. But actually, things are getting more prolific for us. Another golden opportunity is developing around us to get in the BUS who missed earlier or in other words, the bus is in a reverse gear to pick you back.

Is there any solid reason behind such multiple W shape nudges? Or all the reasons projecting by our media to justify such jolts are genuine? Any way, our media is surmising reasons very quickly for each and every such tumbles whether true or false. I am weighing all these news threads positively or hopefully better to ease my apprehensions. As a long term investor, I am happy and trying to believe all these justifications on market fluctuations in its real depth. Because, they says, the falls are based on global cues. I am so glad; we India, our market, our people, our corporate sector or our economy is not blamed in anyway for this crisis. In other words, we are not responsible for all these anarchies. What else I need to stay calm in such an annoying moment? My home is quiet prosperous, I am confident on my future, growth dimensions, then why should I worry excess on my neighbors, even if I have few deals with them.

I am always in bit confusion as the media is forcing reasons to us for every single point up or down in the market. I usually get baffled when they spread reasons for every such budges on indices. If market made a 100 point gain, our media will credit to NASDAQ or DOW. If the US indices are negative and we are up, they will look for Shanghai or Asian markets to lean. If both the above reasons are not favorable to justify their stands, they will find a responsible, mostly from the European market. If every reason falls illogical, they will proudly declare, our market stood solid even after the global indices are negative. But no one dares to predict a hike or fall in advance depends on what has cooked in our neighbor's kitchen. May be its my lack of knowledge, or the different way of thinking, but most of the times, I am unable to digest majority of these justifications.

Last couple of market years confused us a lot and is even compelling to rethink on the established theories/strategies on share market investments. Let us have a rough look on the market graph. The parliament election results and forming of new UPA Govt helped the market to shoot up; first quarter results fueled that booming too. The negative reports on weather forecasts washed out those good hopes in bulk. The industrial growth figures ignited the market again but the Shanghai issues dragged the market to lower levels. Further quarterly results and some positive economical news were bringing up the market again, but now the Greece factor, crisis developing in Europe including German & Spanish issues, rising geopolitical tensions between North and South Korea added the negative sentiment. I have skipped some small issues in this row, but these are the capsule history of our market. The most important thing to consider is, few good stocks are showing real growth or attaining their real values irrespective of such fluctuations.

I would like to suggest my clients to read one of my previous posts at the following link. Please utilize the current level of market at your best. You can accumulate good stocks in comparatively cheaper valuations, but in small batches only, depends on your fund levels. We have enough good scrips to choose which are corrected even more than 20-40% from their highs.

I have placed a screen shot (modified for better visibility) of BSE statistics of last 10 months on Hindalco Industries Ltd, an emerging company and index player. Please spend some time on this image which may help you to form a strategy to cope up with such market conditions. A close scrutiny on this image will answer you in some way or may help you to shape the strategy you need to adopt. I hope this image will work for you better than 10 pages of write ups. Your conclusions will depend on the time you spend on these figures or the maths you able to find between lines.

Do you wait for a stable market to invest your hard earned money? I would like to say, don't waste the time in waiting the best point of time to enter in the market; based on indices, as there is no such time exists. Or if you started realizing such a time, it will be far ahead of you. After every such fluctuating period, market will surely journeys to new higher levels. It is a basic nature of every market unless any serious injury occurred with the economy. People who enter in lower levels and who keeps the patience till the maturing period will blessed by Goddess of wealth. And I hope, the market is not going to shut down, then there is no matter of a fret. The ongoing time is precious for both long term as well as short term investors, if they choose scrips cautiously and prepared to consider a minimum level of patience.
comment please....

Shabu Thachat


  1. Very nic article and best part is at the right time.... Weight of this article will become more as tim will pass and analogy of figure will clear...

    Example of Hindalco is well choosen.

  2. Sir,

    According to me the main aim of media is to make money and not to help investors or traders. Even if business channels try to help investors or traders, they won't succeed because majority follow business Channels to take investment decisions. The problem is market always move against majority view.



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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