i Develop Stocks Advisory

Double bottom formed... ANALYSING THE MARKET OR DOING PROPOGANDA It is really useless to analyse whether we are in bear grip or market is still going through a correction which has happened earlier also on no of occasions..? It seems that majority of the people have started believing that the bear phase has started. Wire media reporters have become world class analysts to predict the bear phase, the wrongs of F M and the mouth watering valuations as ‘too useless’ etc. Generally market runs on sentiments which help investors to invest in stocks at supportive valuations but when continuously it is being propogated that market will test 4400, 4200 and 3600 then question of somebody making fresh investment does not arise….? I have only one answer “I do not subscribe to these views.” Only time will give the best fitting reply. LET THE SANITY COME TO THE MARKET Market tested the double bottom of 15332 which was earlier made on 22nd JAN 2008 and majority of the stocks too tested that bottom. If market goes below 15332 decisively then market could even go towards 12000 as predicted by few media reporters. Unfortunately if it happens what impact it will have on the working of the Government…? With 35% correction in stock market and especially 20% correction post Budget is a big fall whichno Govt. can afford to put on global clues….? If stock market can’t recover from these levels to respectable levels then I think Govt should take the charge rather than leaving it to few bears and bulls. The perpetual entry of the bear grip means GDP shooting back to 6% as claimed by ex F M from BJP and in that case forget about winning elections. F M is known for his sharp skills and acumen and all his acts are based on facts and figures. He has an impeccable track record of achieving his targets. It is interesting to note that he had taken over reins when economy was not doing well. The India growth story started only with commodity Bull Run which is not seen halting anywhere in the near future yet if the growth story is reversing then investors must sell even at these rates and sit on cash. The question is which assets class he is going to invest..? What if you buy gold at 13000 and it crashes to 10000 or 9000…..? What if you buy a property today which corrects by 40% because of the Dharavi and BKC 4 FSI …? You invest on fixed deposit and what if the rates crashes to 5% again…? With rising cost of living and cash surplus what is the guarantee that you will not take any non sense call on the currency….? Will your investments in business and expansions sustain….? What are the chances that you will not be again at the wrong at end of capex cycle which had happened at 1995..? ONLY PATIENCE WILL PAY I do not think that 2 months market behaviour can answer all these important questions about growth, cycle, capex and future of all assets class. The answer can be found only after 3 to 4 quarters and hence all the theories seem to be erratic and self motivated without any sustainable reason. I would search for my answers for sure and for that I will wait patiently. Till that time I would avoid any speculative bets which can really damage my cash flows though I do not mind getting my valuations affected. We had survived the dot.com bubble of 2000 and we emerged as one of the strongest player in the industry. Similarly those who remain fit and slim in such disturbed times will immerge even stronger later on. Is it fair for Larsen to announce losses in commodity at the time when Sensex was being battered and Larsen being one of the representatives of the Sensex..? It is a prudent question raised by one of the investors for which I have no answer. All RIL and ADAG gr stocks are being hammered on rumour which is being circulated in the market through SMS even since FRIDAY projecting this could be a black Monday. MARKET REACTING TO RUMOURS Market had to open weak because of global clues and to fall further because of the aforesaid rumour which seems more a planted one. All global markets have fallen close 18 to 19% whereas we have fallen 31% though we have the highest visibility of growth and earnings. It seems that the manipulative interest in India is of highest standard. Therefore when market rises it keep on rising as if it can’t correct forever and when it falls like as if there is no tomorrow. This crash is more damaging than May 06 has done one thing for sure that Retail investors are now totally out and a new level playing industry is maturing i e insurance and mutual funds. Suddenly the size of MF has started rising and very soon it will catch its global peers. This will help them to take head on with FII’s for sure but the only issue on hand will remain is that whether the same aggression will be shown by MF’s …? WILL MUTUAL FUNDS TAKE THE LEAD? There are only few MF which are as aggressive as FII’s like RIL but all old aged MF’s are docile in taking market call and they join only when the gets going is smooth. They follow the leaders and can’t become market stabilizer in true sense. Only Govt can transform them to become a more market stabilizer which if happens will help large retail and upcountry investors to divert more funds to MF. The more the stronger this industry, the healthier markets will be. The good life, as I conceive it, is a happy life. I do not mean that if you are good you will be happy; I mean that if you are happy you will be good.