26 June 2013

Passing thoughts...

It’s been a while since we last posted. This gap is because of some prior commitments and also because of laziness on our part. Nevertheless, we are back. But it seems that since beginning of this month, everything has started looking downhill. The Rupee is celebrating its senior citizenship. Markets are grinding lower and lower. FIIs are pulling out money from the markets. Your portfolio is bleeding. Many short term traders (you know) are making a killing in the market. :-)

So, what should you do in such times?

The markets are slowly (but definitely) moving below their long term average valuations. So, should we consider these as signs of a coming crisis? If you listen to some of the experts, they are of view that one should not be surprised to see 20% correction from these levels. We don’t know whether these experts are correct or not. But the question which concerns us is what are we doing right now? Are we selling our stocks and booking loses? Or are we preparing ourselves for the Crisis? There is no question about whether a CRISIS will come or not. It’s only a matter of time. Sooner or later, a fall is bound to come [pardon our speculative statements]. So when the CRISIS actually comes, would you have the COURAGE? Courage to go out and buy when everyone else is selling? Now, courage comes from knowing what to do when situation gets worse. That is, you should be prepared for the crisis. It is only when you are adequately prepared, will you be able to take a rational decision in hard times.

But Courage alone (in Crisis) is not enough. You need to have the firepower to take advantage of the situation. Someone has rightly said –“Never waste a good crisis.” So in terms of stock markets, what is this firepower? It’s obvious… its CASH. You have CRISIS (when great companies are available at really cheap prices). You have COURAGE (as you are prepared and know the stocks which you want to buy in market crash). The only missing component here is CASH. This is the vital component of 3 Cs which allows you to purchase these great businesses at really cheap prices.

These are just few random thoughts we had during these trying time. So what are you doing? Selling, Buying or hoarding cash for the anticipated crash?

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8 comments:

  1. shares where I have lost more than 20%, buying.

    ReplyDelete
  2. philip9876.com27 June 2013 11:07

    waiting for markets to fall further so that can buy. also buying gold.

    ReplyDelete
  3. Hi all,

    What would you advice a 22 year old like me to do in times like these. I am planning to commit 20-25k surplus cash every month from my salary savings when (if) the proverbial crisis strikes. It is indeed interesting to note one of your previous blog posts where you pointed out cap appreciation in Wipro's stock over 30-35 years time period.



    I am looking at a 20 year+ time period for investing in the markets. Would love to know your thoughts on stocks/sectors you find value in, over such long periods. I was thinking of infra, metals, retail and banking & finance.


    Thanks

    ReplyDelete
  4. That would be great indeed!

    ReplyDelete
  5. i have been a buyer for the last one week

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  6. True. We have stuck mostly with large cap stocks. You can say that it is because of our risk averse nature of building long term wealth, where we would not like to loose money.
    But we will be frank that we do want to find some good small and mid cap cos. which we would like to buy and hold while they grow into large caps. As soon as we are convinced about any, we would definitely share it on the site for everyone's feedback and group-learning.

    ReplyDelete

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