Imagine you’re aboard a Plane in Flight and hit turbulence…the Plane drops altitude…sometimes very sudden…..Sensex is akin to this situation…dropping 2.1% on Jan 21 and then near 3% today…Suddenly from reaching up for 18000 recently it is now poised to dive below 16000!…It closed at 16290 today…..and those who were proclaiming glory are quickly reversing opinions to predict a sharper fall ahead…some even to 12000 !…Remember the Nursey Rhyme “Ring a Ring a Roses….Pocket full of ……Hush ah Bush ah we all fall Down !…you gonna hold hands with those who are singing this,you will fall down !
Despite continuing World Economic and Political Turbulence, and intense FII selling past few days,Indian Equities remains in the best position to move up…20-X is going to see a Sensex range that could extend down to 14000,maybe 13000, and up to 20000…so we are at 16000 right now…we are not going to test 8000 again,like we did in March 2009 and October 2008…so macro situations and large caps trends are going to be harder to read in 2010….It’s a bottom up low and mid cap approach that’s going to get you the Winners in 2010….So playing the Sensex or the Nifty or the Large Caps,either in Cash or Derivatives may cause you tense moments…like today
Concentrate and Focus on Specific Stocks in the Low and Mid Cap Range…..Most of Our Clients Portfolios over Rs Ten Lakhs are in 25% Cash at this time….New Clients have been advised to hold Cash and not be in any hurry to invest…..and at any given time we have @ 15 stock selections…..portfolios have from 3 to 10 scrips from this selection……one scrip was on upper circuit this morning and we reckon atleast three of our selections would be clear and minimum money doublers in 2010
So we enjoy such falls in the Markets….gives us opportunities at lower prices
But if you’re a die hard macro and large cap player because of high volumes and liquidity,then do a simple exercise…Make a list of your Top Ten Sensex Scrips from the 30….Rewind to 2009 when the Sensex was 13000 and 14000 and 15000 and record what were the prices of these Ten scrips at those levels……will give you some sense of where these scrips can yet correct to !…and save you the agony of jumping in impulsively