March has come and gone where’s the update

hey friends,

my profuse apologies for not posting in March. It was a month that was momentous for an investor. After the correction of January and February, at an IIF Meeting I was asked to give a talk on investing. The market had fallen some 1600 points on bse in 4 consecutive days and the investor mood was solemn.

Hardly anyone in the audience was keen to discuss a market up look. Most were worried about how fast and furious the fall could still be. Levels of 5500 on the nifty seemed to be in general consensus and china, bank npa in india and what’s for lunch that afternoon was more of the mood.

I was promoted in the order of speakers to deliver the talk, much to do with the generousity of the event organizers and a bit more to do with the fact that some felt one bull could be done and over with before a more serious talk on markets and technicals and charts and dooms could set in.

as I went ahead to start by talk, I changed stance. I told the audience I am prepared with my traditional talk but looking at their moods of gloom and doom felt it was better to ask them to quantify their concerns on china, fii selling and on psu bank npa’s. At a 7000 nifty level and several scrips beaten down I tried my bit to suggest the extreme side of fear vs greed.

as an indicator I suggested that only a few days back in August 2015 the market had tanked 1600 odd points in a single day but no one remembered that as the market pulled up immediately thereafter and things were back on track. This would be a no different situation was my thought or if not, it would not fall as sharply as was the concensus. My only logic (absurd as it may sound) was even the worst of companies and troubles were in the stock prices. I explained an inverted structure. Assume you wanted to make good gains in he market not by buying but by selling what could you sell at the prices that then prevailed to safeguard your capital and make a decent return.

Having been negative on metals and psu banks for years, I emphasized that even those looked dangerous to sell by the inverse theory. I told the audience the market had an imperfect recollection of its problems. China, Greece, Brazil, bank stress tests, currencies. That moment also trending were fears of long term capital gains (we were in the midst of February), a wild mid cap crash, a complete overdose of everything negative.

 

you need to factor this now in hindsight:

-a room full of investors who had assembled with less interest in buying that in soothsaying

  • a super active electronic media predicting doomsday we most time being given to intra day technical guys who were sounding like they were sent by th lord himself to curse a wrath on anyone daring to buy
  • all across fii selling and market pull down despite the fact that even after such selling and market fall, Fiis has 90 percent plus invested in india. In other words for the bit they sold they already pulled down a substantial part of what they owned
  • My own cfo in our office despite being a finance guy with years of experience and lots of wisdoms, gyrating between whether he should sell his pms at a loss, just a few days after he had delayed his decision to add new funds
  • Debates across admitting on nifty targets and on a sure shot belief that long term capital gains would come despite a steep market fall
  • a correction in a stock to the tune of 5-10 percent on any selling amidst low volume as there was no buyer
  • god knows what more

the scenario was making me more bullish.min fact I remember and thankfully found a support in another friend, Nooresh Merani joining in later to blow his bullish trumpet. It excited me so much that much to the surprise of most, I rushed back on stage to draw more attention of the crowds on why a good rally was around. A few took notice.

 

We we are now through March. Call it luck or randomness or whatever you feel. We had a rally. A good rally. A decent rally. A rally that left many. Several sold off equity, several reduced allocations and several moved into deposits and gold and became mr doom in the chance to bloom.

whether history rewards the brave or the cheeky survive- we don’t know until it passes through. However investing is not about shouting shop in uncertain times when the uncertainity itself is beyond expression. The fears of 2008 seemed to be more in impact brought in by a strong historical bias and fear than a rational check on general world awareness, monitoring, inter global dependency, pockets of isolated growth such as in india, RBI’s superb intervention (Gov Rajan is one of India’s best thinkers in control) and the fact that as a cardinal rule stocks being attractive when their valuations move to cheap or relatively cheap conditions seemed amiss.

some of us took a deeper breath and lived through. Opportunities like these are blessings for a passionate investor has an inner self that tells him xyz is now better, safer, cheaper and opportune than say another co that he may own. Portfolios undergo their own stress test and some stocks stand out almost automatically at that time.

I used the opportunity to enhance my position in the stocks of highest conviction as the relative valuation of your best bests stands corrected against relatively experimental bets.

In one month we are back to decent levels. Some smiles, some joy of returns and a lot more strength in the comfort of the portfolio. Until the next time when opportunity strikes. And we again march on.

Happy investing.

i have just concluded an interview for Vishal khandelwal of safal niveshak who does an excellent passionate task of educating investors across. Do read it if you are a subscriber to his almanac. Sometimes I erroneously say a few things that turn out ok driven by passion rather than intellect. Or may be by smart editing of people like vishal.

 

cheers

 

disclosure:

i type fast on an iPad

i don’t check spellings when in a frank flow that’s like a chat ( I check a lot of spellings when I advise on IP)

I am not sebi registered and though I took care not to talk of specific stocks I recommend you to consult a sane person for your investment decisions

I may be currently going through an astrological phase of randomness. But i am praying it lasts and I spread it well.

 

 

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2 thoughts on “March has come and gone where’s the update

  1. Pradeep says:

    Thanks for giving a nutritious break fast!!

  2. Hemant says:

    Enjoyed every bit of thought ,Esp against Media:)

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