November 19, 2019
“Be fearful when others are greedy.” – Warren Buffet
Markets are thriving like anything for quite some time now. Sensex is now trading over 31,000, Nifty has also crossed 9600. Between January and now markets have risen by over 20% in just about four months. This reminds me of the similar surge in market during 2007-08.
Between 1st Sep 2007 and 7 Jan 2008 sensex had risen by about 35%. Somewhere in September 2007 we had started asking our investors to be cautious but the markets continued its hike and rose by another 16% or so, before it went for free fall. And when it fell, it fell by almost 60% just within nine months. All analysts were clueless about the sharp rise and could not sense that free fall as well.
Will the history repeat – ??????
“The four most dangerous words in investing are “This time, its different”– John Templeton
Well every time when markets achieves new highs or fall by good margins, its different. Markets are currently trading on stretched valuations. But at the same time a lot of regular money is being committed to markets from mutual funds, pension funds, insurance companies etc. This may result for these stretched valuations to be new normal.
Events to be watched out are RBI’s bi-monthly review of monetary policy, movement of monsoon and corporate results for first quarter in July-August. In our view none of these factors looks to impress market to keep the current momentum. It would only be post September/October when monsoon’s performance would be clear, GST has seen its initial implementation and corporate are out with their report card for second quarter-first one post implementation of GST, markets should get some booster.
As advised in our earlier commentaries, you as investor should start booking some profits after markets breaches 31,500/32,000 levels. For those who wish to invest for long term and invest in equities, should spread your investment across 6-9 months.
Caution– midcaps have already seen some correction in past few sessions.
You may contact us through whatsapp/sms or calling on the same number for any advice or making investment. Your positive criticism is welcome.