Tuesday, 7 February 2012

Beware the ides of March

It's popular to do what's popular, but its not profitable to do whats popular - Rakesh Jhunjhunwala

The current rise in the market has been dramatic and a lot of people have made significant money in the last month. FIIs have pumped in dollars and that has helped both the equity markets and rupee-dollar conversion ratio.

Most people have turned bullish and are trying to follow the herd and buying stocks. As history has repeatedly showed, retail investors usually get in at the wrong time in a market rally. It is important to ignore the liquidity and be cognizant of the event risks that are coming up.

March 16th Pranab Mukherjee is going to present the Union Budget. UP elections results should be also available at that time. There will be more news flow with respect to Greece's debt situation.

It is probably the time to be more cautious than adventurous. If you have spare cash, get into debt funds or buy into good fundamentally strong companies. Increase your time horizon of holding your stocks - buy to hold for the next 2-3 years.

I am looking at a couple of companies at this time and will post details about them once I complete my study.

6 comments:

  1. Are you making cash available by selling out your current positions? Or just NOT investing fresh money?

    Ideally I would not try to time/guess the market and just go with the flow.

    ReplyDelete
  2. I am investing fresh money very very selectively. I am not smart enough to time the market successfully. So, I try to look at undervalued stocks and buy into them. I did sell some stock where the story did not pan out the way I thought it would when I had bought them, but they were not core portfolio holdings.

    I am buying gilt and bond funds now with my spare cash (never thought I will do that)!! But probably move back into stocks if I find a really compelling buy.

    ReplyDelete
  3. I am also looking at 'Gilt and bond funds'. With the change in interest cycle hopefully decent returns in a year or two.

    Your conviction in sintex seems to be paying up :-)

    Keep it up. Looking forward to your next post.

    ReplyDelete
  4. waiting for your next post as suggested

    ReplyDelete
  5. Nandi,Kishor,
    I am actually moving into a completely new role at work so am very busy these days. However, the stocks that I am currently looking at are HSIL (Hindustan Sanitaryware), IFB Agro (run up a lot since I bought a small quantity a few weeks back), JK Lakshmi cement (I have already posted about it). I have 4 more companies that are on my study list that I am not getting any time to look at :-(

    ReplyDelete

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