J U S T C H I L L A X.!!!
Dear investors,
I know how painful it is to see our portfolio erode by 30~50% in a matter of two days. Its like, our hard earned money is just evaporating in front of us and we are helpless. Interestingly, this is happening without any unfolding of scam or political fallout or any major change in fundamentals on domestic front. But that’s how stock market is. So just Chillax – as we have no better option left with.
To begin with, nobody on earth expected such a massive fall in such a short time. Although few analysts and broking firms were bearish on Indian market, but they too were shocked by the magnitude of fall and the pace at which market crashed. No doubt, large caps had run beyond the so called fundamentals and a healthy correction was overdue. But the main culprit for this carnage is the global factor; especially sub-prime issue & potential recession in USA. I am not sure, but I think the biggies like Morgan Stanley, Merrill Lynch, Citigroup, UBS have already taken a hit of 40~50 billion US $ in their books till now and the world is still busy in calculating the extent of total damage. To worsen the situation further, rumors are afloat that CITIBANK will file for bankruptcy, which I feel is a rumor only. However, the way Asian markets like Hang Seng, Nikkei, Straits, Kospi, Taiwan market or even European markets like Brazil, Russia, FTSE are correcting there is some serious problem.
One can simply evaluate the pressure in which US Fed might be reeling under, as it has just announced an emergency interest rate cut by whopping 75 basis point taking it down to 3.5%. This is the biggest single rate cut in last two decades. This proves that USA’s economic condition is indeed deteriorating. In short, global issues will continue to haunt & dominate our domestic market. It will be interesting to see whether the ‘V” shape pull back takes place in our Indian market as anticipated by most of the market players. Personally, I am expecting a partial pull back but complete recovery or a new high will take much longer time. I hope and expect that our honorable FM - Mr. Chidambaram should announce some good news in this budget for our market as well as corporate world. To conclude, one may call this fall a deep correction or a crash but eventually it’s a comma and definitely not a full stop to the Indian bull market.
And oh yes, if you are among the lucky few sitting on huge pile of cash, I would advise to invest 50% of it immediately at current levels and balance 50% at further 10% fall, in case it happens. Buy any quality mid cap or large cap company with strong fundamentals, great visibility and good management. As most of the scrips are at mouth watering level its very difficult for me to name few of them. Do your own due diligence.
Regards
S A A R T H I
I know how painful it is to see our portfolio erode by 30~50% in a matter of two days. Its like, our hard earned money is just evaporating in front of us and we are helpless. Interestingly, this is happening without any unfolding of scam or political fallout or any major change in fundamentals on domestic front. But that’s how stock market is. So just Chillax – as we have no better option left with.
To begin with, nobody on earth expected such a massive fall in such a short time. Although few analysts and broking firms were bearish on Indian market, but they too were shocked by the magnitude of fall and the pace at which market crashed. No doubt, large caps had run beyond the so called fundamentals and a healthy correction was overdue. But the main culprit for this carnage is the global factor; especially sub-prime issue & potential recession in USA. I am not sure, but I think the biggies like Morgan Stanley, Merrill Lynch, Citigroup, UBS have already taken a hit of 40~50 billion US $ in their books till now and the world is still busy in calculating the extent of total damage. To worsen the situation further, rumors are afloat that CITIBANK will file for bankruptcy, which I feel is a rumor only. However, the way Asian markets like Hang Seng, Nikkei, Straits, Kospi, Taiwan market or even European markets like Brazil, Russia, FTSE are correcting there is some serious problem.
One can simply evaluate the pressure in which US Fed might be reeling under, as it has just announced an emergency interest rate cut by whopping 75 basis point taking it down to 3.5%. This is the biggest single rate cut in last two decades. This proves that USA’s economic condition is indeed deteriorating. In short, global issues will continue to haunt & dominate our domestic market. It will be interesting to see whether the ‘V” shape pull back takes place in our Indian market as anticipated by most of the market players. Personally, I am expecting a partial pull back but complete recovery or a new high will take much longer time. I hope and expect that our honorable FM - Mr. Chidambaram should announce some good news in this budget for our market as well as corporate world. To conclude, one may call this fall a deep correction or a crash but eventually it’s a comma and definitely not a full stop to the Indian bull market.
And oh yes, if you are among the lucky few sitting on huge pile of cash, I would advise to invest 50% of it immediately at current levels and balance 50% at further 10% fall, in case it happens. Buy any quality mid cap or large cap company with strong fundamentals, great visibility and good management. As most of the scrips are at mouth watering level its very difficult for me to name few of them. Do your own due diligence.
Regards
S A A R T H I
3 comments:
you are absolutely right Saarthi...no risk no gain....we really dont crib when we are making handsome profits so we should take these losses in our stride
hello
good mornning
your report is good and on the facts but one thing we lern from this type of corrections we have to invest only 50% of our savings not more then that and wait for this type of corrections to by more aND EARN MORE AND TO SAVE OUR money and panic our indian market.
vimal kumar dhawan
Great work Saarathi.. you are a real S A A R T H I, meaning the guide for our raath... question is spreading the buys.. don buy at one go.. all r good scrips and therefore buying b spread, in case mkts again fall, u hv some more to money to buy.. and then again don forget to sell... Saarthi is good guide.. thnx and Regards to our SHRI KRISHNA.. SAARATHI of Arjun..
WARM Regards
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