A Review Of Previous Posts

For the last 2months I have been warning about market correction and many following me would have invested around 8000-10000 levels in Sensex and 16k was good return and right time to take profit and we have talked about Telecom, Realty, Ambani brothers stocks and these stock have corrected more than market.  In SUNNEWS interview on 09/October/2009 30-40% correction was strongly said and duly posted in blog on that day.
 Today in modern day investment, investors are more carried by daily stock movement, and want to buy as low as possible and sell @ possible highest price.  Many tell me I am always few months in advance in my prediction maybe they are right, “But when I asked to book profit there were buyers to all the stock, now where is the buyer?”.  Investor Greed & Fear have always given way to euphoria and panic and before my Graph can suggest market is going to correct, my interaction with investors has given me advance signals.
 When many investors who have not seen Graph tell me about Support & Resistance then Mr.Market has become maniac. Many times people are worried about I being right or wrong this time, which I think is never important, Think about your hard earned money and the risk you have taken.  If I go wrong it will be talked out of 10 times he was wrong first time.
 Common mistake investor make when we say correction many book profit and stay out and any 10-15% correction they feel the stock are sector has become very attractive and they start to buy, check how many investor hold Telecom stock, UNITECH, SUZLON and Realty stock where we have in advanced given adequate caution.


Written On 17-Sep-2009:
Market has given excellent return and Investor who had followed me should be happy as for the past 7years we have almost been right but, always being right will be very difficult and by increasing cash position we can always find good stock ideas even if the market where to rise. When we can find buyers for our stocks @ fancy price time we take some profit, and have cash. Correction never happens when we want it, it always happens all of a sudden and many reasons will be attributed to it.
Like before I am unable to say (Predict) if correction is going to start, Time period wise market may be nearing its top so Caution is advised.
Recent correction in Telecom stocks was rightly predicted on 19-Sep-2009:
Index is @ 16month high while Telecom stocks IDEA/BHARTIARTL/RCOM are underperforming the general market and IDEA is looking the weakest of all Rs.74.50 below caution is advised in the stock.
Understanding Equity market is the most difficult thing as the world is a Global village and events happening in any corner of the world normally has impact on Equity market. Frost in Brazil will impact tea prices in India and tea stocks move up this was my 1st lesson in my M.B.A in 1991 and today Sugar and Tea stocks are proving that with SUGAR being @ 28years high.  Investor should understand there are multitude of factors impacting market but best Investment is made following “You try to be greedy when others are fearful and you try to be very fearful when others are greedy”- Warren Buffett


Good Caution Was Given Beforehand on 14 Oct 2009:- 
Everyone is aware of all the facts and figure and confusion is all around and caution is seen on both sides, bullish on long term no one has any doubts after 5-6 years markets will be more than double from here but is the pain over. Economic recovery has been on stimulus and continuing stimulus for long with create excess and can lead to more problems latter.  Many talk of V-Shape recovery while few talk of W-Shape recovery, the problem comes only if this recovery is W as the correction could be deeper and this time recovery will not happen so fast as it did before and for a recession which is worst in 80years things can turn worst before it can get better. Times have changed and world is better equipped to deal with help of past history but investor avoid being euphoric in next few week advance tax figure will be known and results also will flow in next 30-40 days this quarter would be important to judge if there is real overall growth and Global Hedge fund allow their clients withdrawal once a year and all maturity will be known end of this month.
Risk: Many retail investors have invested seeing the huge return equity market has given in last one year and their expectation is very high from market and with Derivative position very high after January 2008 leverage trader can soon feel the pain. But excess correction and pessimism led to this rally where chance of excesses on positive side would create bubble and risk to reward ratio is not favorable in my view and holding cash level above 60% would do good.