PREDICTING SENSEX

Can anyone predict future? If someone can do so, it will be an easy life for him. He can take appropriate steps in time and avoid pitfalls. If he is philanthropic he can take steps to avoid major world crisis and make the planet most peaceful to live. In due course of time, he will be the leader of humankind and will be no less to God. Can we imagine God as a trader? But alas, no one can predict anything ahead of time, and probably that is the reason our life is so exciting.

But one can sense that some thing is brewing and is most likely to happen. Name it sixth sense or good judgment or approbation of incidents. It does not need great intelligence to predict a rush-drunken driver to meet with some accident, a beautiful intelligent girl to ditch her dumb and poor boy friend. It does not need any dose of intelligence to forecast that tomorrow the human population in India will be more by half a million. To predict that during Market-crash the small investors will suffer most. These all predictions are mainly based on statistics and our pre-designed prejudices. But these predictions may not always hold good. If the drunken driver stops his car, locks it and takes a taxi to his destination he will avoid accident. Similarly, the boy sees the light and ditches the girl before the girl ditches him. Population growth is in the hand of government, any strict law of abstinence will stop it overnight.

What about small investor? It is an enigmatic repetition. Always the greed overcomes the sense of small investor. And the build up frenzy of Bull Run becomes a snowball which simply grabs him and pulls him into a deep ditch. It is not that he cannot see the market is balancing on thin ice, but still he will wear his skating shoe for a dance and he will regret for a long time to come. It is always easy to advice but difficult to practice.

What about big investors or market operators, they hedge their position and minimizes their loss in this kind of situations. They have enough resources to see well ahead of time what is going to happen in other words they always have the correct information.

But who could forecast the household spending power of North Americans has so much bearing on our market, which is not even a major consumer-good producer.

Was it a kind of pretext to pull the market into red?

Lets not be so “Faberish”, or Doom-sayer.

The present correction is presenting the small investor a great chance to revise his position and invest some more spare money. Pundits say that sound basic makes a stock strong candidate for investment. It is the time to forget short term trading for the time being. I believe the India Shining story very creditable and stock market is the platform to make fortune.

But I should be cautious, to what level the market will correct is most difficult to guess. I should actually see or can feel it. Because by that time; I will be pacified, devoid of any excitement of this Bull Run. I can even buy stocks in small batches, less than 25% of my buying capital at one time. Some good stocks are there which merits the attention of small investors at any time and remained expensive in Bull Run.

Reliance Industries: great pick if price is lowered by another two hundred
BHEL: yet to realize potential with good order book, difficult for valuation.
L & T: long term story, but should we pick below two thousand?
SBI: PSU, with its own limitation. INR 1400 should be OK.
HDFC: fantastic and consistent run, may need revaluation in your portfolio.

Correction are welcome for any bull run, it brings the traders to earth and makes them humble.

A humble person can always judge better.


NB: I am suffering from tech phobia, a slight here and there in the dash board, the look of my blog got changed and the links got missed, which I did not wanted to. I am sorry and I will correct it soon. It happened when my blog picked up momentum with increasing number of readers.