Aug 07

WHEN WILL THE MARKETS CORRECT?

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That’s the question I am being asked very often these days. Ever since, my last blog post, I have been inundated by my readers and friends with two questions:-1. When Will the Markets Correct ? Especially when you were bang on about markets touching   10000 on Nifty much before it actually climbed that peak. 

2. Now that you were right about the market going up, when is it coming down? 

I just laugh it off. If I knew all of that I would be obscenely rich. Nobody can predict the market. Not even Warren Buffett. In India a lot of punters and brokers are able to predict and take advantage of the market because we still have weak laws and structures in place. Look at NSE authorities getting away with the market manipulation which favoured “some brokers”. Ms Ramakrishnan who was the previous CEO made some Rs50 Cr in official remuneration and bonuses apart from what she might or might not have made due to the “glitch” in her exchange. We are a tolerant people who manipulate and in turn are manipulated. We have evolved like this. Not our fault. That’s the pride we take in ‘Being Indian’.

Market prediction is like Met prediction without a radar. Will it rain or will it not? About 30 years ago when we watched TV with our extended neighbourhood, the Weather News or Mausam Samachar newsreader said that there are chances of a heavy shower although it may be bright and sunny. So one did not know what would happen. The Indian market predictors are also like that. They always cover their asses by saying both. The stock may rise to 200 levels, but also keep a stop loss at 170.  What the fuck? 

My answer to the first question is that markets will soon go down south, but before that they may just surprise you and touch 10300 or thereabouts on Nifty. The punters ensure that all those fence sitters, like a lot of you my dear readers  who have been waiting for the correction in order to invest lose their patience and start thinking, “Oh shit, I missed out the gravy, my friend Rajesh just made 50% money on Reliance Industries or ABC Chemicals in 3 months. My counter question to such people is, “If Rajesh got rich, did you become poor?” In case the answer is NO, then chill with a glass of beer.

My aim is to ensure you do not make stupid mistakes. BUT I CAN SAY WITH SURETY THAT THE FALL IS NEAR. I CAN READ ALL THE SYMPTOMS like BROKING HOUSES BRINGING OUT ADVERTISEMENTS FOR PEOPLE TO TRADE ON MARGINS — TELLS ME THE CLIFF IS CLOSE BY.

If the correction/fall is close by, what should you do? Make a buy list and keep cash ready. Today was Rakshabandhan and Dr Reddys Lab was just the right present for my sister Neelam, whom I have been gifting only stocks on every Rakshabandhan festival. I realised pretty late in life that she never sold any of those stocks and made a fortune out of them. That story I reserve for another day. Till then go buy Dr Reddy’s Lab. And if it falls further, buy some more.

 

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