What intrigues me most about TV Business channels is the way the TV Analysts and Anchors portray the market movements – like happy investors their face radiates like a thousand volt bulb, when the Sensex and Nifty keeps rising and the tone of their voice mimics the rise of the indices – higher the indices, higher the tone but the same person fumbles when markets go downhill as if somebody is squeezing the vocal chords of the Analyst /Anchors.
In fact, when the markets fall they should smile like a Star and tell investors – hey guys, the rising and falling of the markets is in nobody’s hands, but what you can buy and what you can sell is very much in your control. In other words, the TV Analysts should convince investors to patiently wait and watch the erratic movements of the markets instead of doing something foolish like buying / selling stocks when the markets are crashing. Selling stocks for whatever reason when markets are down is sheer foolishness but buying stocks during depressed market scenarios can prove to be a very rewarding experience and very few people like to indulge in such simplicities – so do wait patiently for the market to go down further and then rush like a brave soldier onward and forward to hug the bear with all your love and affection by buying stocks that you were dying to buy but could not afford to when the markets were at greater heights
The problem with most investors is that they start getting ready for a party which is not going to happen – for instance I know quite a few guys who bought Reliance Capital when it was close to its peak of Rs.881/-per share thinking that the share price will double in a years time and they don’t want to miss the party! But see what happened – the Market cap of Reliance Capital has come crashing down from a 52 week peak around Rs.21,686 crores to Rs. 12198 crores, that’s a mind boggling erosion of investors wealth of around Rs.9488 crores.
I fail to understand why people believe that they will miss the party and therefore they go shopping for stocks when the bourses are heated – what party are they talking about, what grandiose enjoyment they are talking about. Had they taken my suggestion before buying at such high price, guess these folks would save their hard earned money. In fact, these guys would be better off had they joined a political party where they can at least live like a Raja!
Nifty ends above 5400;A Raja arrest spooks sentiments
Why should investors look at this event with a bearish overtone – if Raja goes behind bars will Corporate India or the Governance of the country suffer by any stretch of imagination or will the Market Capitalization of companies come crashing down? No way. So, all this does not make sense. But then, as investors you need to use commonsense and take advantage of falling prices. In this matter, investors must learn something very valuable from Mr. Buffet. Warren Buffet’s value investing strategy works like a patient eagle, it can wait for suitable prey for hours together. And when the time comes, he does no delay in catching the prey. Warren Buffet can wait for one value stock for year and years. So, you need to wait for prices to crash further and then go for the prey, your target stock.
- Don’t touch any stock when the market is red hot.
- Buy stocks only selectively when “blood is running in the streets” which in very simple terms means buy when everyone is selling and sell when everyone is buying.
And in the markets, there will always be contradictions- without contradictions and opposing views there won’t be a market in the first place – some say “all is well” and some say “nothing is well” and now you decide whether you are well. If you are well, then be alert to what’s happening in the markets because this will help you to buy some very good scrips at beaten down prices .if you sense that the price of the stock you want to buy, is still in a downward trend, wait and allow it to slide gracefully. And when it falls, pick up the wounded stock not with cunningness but with humility and then watch the magic happen.
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