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Don’t be in any hurry to Buy into Equity…stagger,if at all

No matter the ‘nasha’ generated ,rather provoked, by most media,brokers,advisors,companies,bureaucrats,ministers et all…..simply don’t be in any hurry whatsoever to buy into Equity…when liquidity and sentiment,more than valuations,drives the momentum and when you receive an alarming quantum of unsolicited Equity advice,then it’s time to be wary…even when you hear an ‘iconic’ investor being contrary for the sake of it,when he opines that’s it’s not liquidity that is driving momentum…he’s polemic in his arguments…at times facetious…at times filibustering

Reassure and revalidate the Integrity of the Advice you’re receiving…is it rational ? is it logical ? Is it vested ?…Is the advisor and close clients attempting to offload what is being recommended to you to buy !?….an advisor was penalised for this by SEBI but yet appears regularly on the stock channels !……..Remember how late last year,a leading securities firm,who after,in early 2008, thrusting the Reliance Power IPO at Rs 427.50 down you’re throat recommended strongly to sell your full equity portfolio and even short sell the market as the Sensex would seek 6000…it was 8000 to 9000 then…the Sensex took off to 17000 !…those who acted on such extreme advice simply lost it all !

The Sensex has dropped a 1000 points from 17k to16k and should correct further

Even today,a leading anchor on a leading Stocks Channel was recommending an aggressive, dangerous and immature strategy of seeking and investing in High ‘Beta’ stocks that will bounce back strongly to beat the Sensex….surely such a strategy is not suited for all investors across all risk profiles….de-addict yourself from stock channels

As interest and inflation rates firm up,half yearly performance unwinds,stretched valuations are no longer termed irrelevant,geo-poiltical tensions escalate in our neighbourhood,as USA continues to print dollars in increasing and alarming quantum to fund it’s increasing and alarming deficits and debt and as we approach 2010,a year just before 2011 when the new Direct Taxes Code is to be implemented…..we need to be wary in the short to medium term

So if someone tells you that it’s a ‘Do or Die ‘Buy’ situation,like late October 2008 or early March 2009,tell them you’ll not ‘Do’ and they can go ahead and ‘Die!’

Don’t be in any hurry to tranfer Available Cash to Equity Investments in your Networth…unless you are convinced of a good ‘value’ buy…you’ll get less riskier opportunities ahead…staggering investments is always a safe strategy     

All the Best !…go watch it,leaving your brains at home…I did…I enjoyed

For now,to state it naughtily in striptease lingo… “Watch,Observe,Enjoy but Don’t Touch !”….let the scrips bare their recently gained excesses away ! 

Cheers !



3 thoughts on “Don’t be in any hurry to Buy into Equity…stagger,if at all”

  1. looks a good advice Gaurav.But peple dont want to miss the bus that they did when market jumped from 8000.
    At this moment dont you think buying good fundamantal stocks can be a prudent decision.

  2. Of course Ashish…but think long term…like I said we need to be wary in the short and medium term…so if you’re buying into Larsen and Toubro at Rs 1550-1600,lovely…buy more of it on significant declines…but don’t expect short term gains….and i don’t think you’re going to miss the boat…the sensex is unlikely to run away fast,so you don’t need to run into stocks fast!…take your time to find Value and be selective…in any case,I’m suggesting a stagger approach

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