Posts Tagged ‘Sensex’

With the recent ups and downs in Bombay Stock Exchange our economy looks like an infant being rocked in the cradle. I wonder what potential investors would be doing who are waiting with deep breath to do bottom fishing ….Is it time to put the fishing net down ? Or we should still wait for some big fish coming exhausted and dried out ?. Not to mention millions of investors who have already seen valuation of stocks in their portfolios erode like icecream melting in my mouth. With the market sentiment down worldwide, people have started lauding indian government to have good regulatory framework(read license raj and red tapism) in place which somewhat insulated some of our other systems in place.

With nowhere to run and nowhere to hide the ‘aam addmi’ or common man has reverted back to good old Fixed Deposits and saving account in PSU Bank since they would have insurance cover from Almighty Government.  Suddenly everyone’s eyes are over the Forex reserves RBI has built between 2003-2008 to be used in variety of instruments and measures. Every industry is looking forward to relief packages ; they want goverment to loosen their purse strings and inject the bare minimum relief/operational capital.

I look at these turbulent times as the window of oppurtunities we Indians have. One thing, we haven’t been affected as much as European and US markets by mortgage turmoil. Second thing, our growth estimates are still at a good standard of 7% which is fairly decent. Third, most of our inorganic growth ( read mergers and acquisitions) can come up in no good time as this. Fourth, foreign sovereign funds have nowhere else to go but come to Asian and Latin engines of growth. Fifth and most important thing, we indians have ‘Jugaad’ the inscrutable ability to find workaround. So all we need is prudence and a good plan to ride this turn.

Apart from the capital injection which goverment needs to provide to support the worst hit SMEs, they need to lay roadmap of infrastructure investment. I am totally in agreement with Swaminathan Iyer  who suggested using Oil Reserve Funds to build coffers when oil is hitting low globally and not pasing immediate relief to consumers. After all we can be sheilded by same fund when prices ride back to original levels. Investors need to make their bets on long term view of the economy reasonably for a period of 2-3 years. Traders should be able to make their way by using Alternative Investment Methods(AIM).  As for retail investors, stop looking at your portfolios everyday and scream on seeing red. People who are unfortunately laid off can turn a new page in their life and career by pursuing higher studies for different area or discovering self employment oppurtunities. Well all said easily then done. Always remember this quote “For a tree to become tall it must grow tough roots among the rocks”


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Today a news popped up, the Mutual Fund market is going to collapse. MFs were always considered a safer bet for investment among all the high risk ones. The assumption is that there are people who are putting stakes to manage your investments. But, no longer true!

It’s not even a month before it all began. During one of the classes of our orientation came the news of the great Lehmann collapse. Since then a string of events in the finanical world (bubble burst – remember dotcom burst) have brought upon a never seen before liquidity crisis. The world is panic stricken and everybody has stopped cribbing about the rising crude prices (they have dropped now actually) and inflation.

Many of my friends have opted for a SIP (or Systematic Investment Plan) and I was really surprise to hear them talk about losses. I have stayed away from MFs only because I believe I can earn more by investing directly into the stock exchange (of course even I have lost money). Every time a stock falls, I feel encouraged and buy more – only needing to buy even more. The colors of the week are RED,

Despite this, we always find time to talk about cricket. Sloppy fielding, Australian (cribbing) media, Spinners vs. Pacers, Sehwag…

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