Some market guru informally talks of 5000 for sensex.
Economic times carried 7500 level. It was touched yesterday.
My strategy remains the same. Buy in small lots and acquire a big holding in this downtrend for long term portfolio.
I wrote my 400th knol yesterday on bearmarket side speculation using longterm equity portfolio.
http://knol.google.com/k/narayana-rao-kvss/narayana-rao-kvss/2utb2lsm2k7a/400
Showing posts with label Investment stategy. Show all posts
Showing posts with label Investment stategy. Show all posts
Monday, October 27, 2008
Monday, October 20, 2008
Stay Safe, Don’t Trade
Stay Safe, Don’t Play is the caption that Shakti Shankar Patra (shakti.patra@timesgroup) gave to his commentary on the derivatives market on 2010.2008 in the ET Investor’s Guide.
This caption is interesting to me to clearly bring to the notice of investors an example where traders are running away from the market thereby providing bargain offers to investors. Benjamin Graham advises investors to buy when traders are running away from the market. This is a clear example of the possibility that Graham indicated in his book.
Dangers of picking bottoms for traders: Picking a bottom for a trader is risky. Momentum is safer for a trader than a contrary position. The present market is one such where any trader who entered a long position suffered innumerable times. Shakti echoes other technical analysts when he writes all traditional forms of analysis and conventional indicators have become absolutely useless.
Put call ratio was of no use. Analyzing the build-up at various strike prices has become even more redundant. CBOE VIX hit an all time high of 81.17% which means that S&P 500 option contracts are bought or written with an implied expectation that with a 68.2% confidence (one standard deviation interval) a 81.17% move in S&P 500 over the next year. This means S&P 500 can be below 200 or above 1600 in a one year span. In terms of Dow Jones, it translates to 1700 or 15,300.
Shakti says his trading call for the second successive week remains the same – Just stay out of this madness. Don’t trade.
These are interesting times for investors. Fearful times for traders.
Plan and make your investments.
This caption is interesting to me to clearly bring to the notice of investors an example where traders are running away from the market thereby providing bargain offers to investors. Benjamin Graham advises investors to buy when traders are running away from the market. This is a clear example of the possibility that Graham indicated in his book.
Dangers of picking bottoms for traders: Picking a bottom for a trader is risky. Momentum is safer for a trader than a contrary position. The present market is one such where any trader who entered a long position suffered innumerable times. Shakti echoes other technical analysts when he writes all traditional forms of analysis and conventional indicators have become absolutely useless.
Put call ratio was of no use. Analyzing the build-up at various strike prices has become even more redundant. CBOE VIX hit an all time high of 81.17% which means that S&P 500 option contracts are bought or written with an implied expectation that with a 68.2% confidence (one standard deviation interval) a 81.17% move in S&P 500 over the next year. This means S&P 500 can be below 200 or above 1600 in a one year span. In terms of Dow Jones, it translates to 1700 or 15,300.
Shakti says his trading call for the second successive week remains the same – Just stay out of this madness. Don’t trade.
These are interesting times for investors. Fearful times for traders.
Plan and make your investments.
Assets still not cheap; Sensex should be 7,500
Assets still not cheap; Sensex should be 7,500
It is also where you come from. In 2002, it was around 3,000. Six years, we have grown at an average in nominal terms of about 15%. 1f one compounds it will be in the range of 120 or 130%. If one takes this calculation, then the index should have gone to 6,000 or 6,500. Instead it reached 21,000. So we can make ourselves very happy or unhappy. All I am saying is assets even now are not very cheap.(Rahul Bhasin, Barings Equity Partners)
In 2002, average profits after tax as a percentage of sales in India was 1.77% of GDP (gross domestic product). Last year it was 6.77% of GDP. So we are off a cyclical high.
If you look at the liquidity situation globally and you look at how global capital is in India the probability of them pulling out is high and therefore I see more downside.
The real GDP has grown 15-16% a year since 2002, maybe slightly more. Maybe the index should be 7,500.
I am happy to see these statements from Rahul Bhasin. I already wrote in my eariest posts that 7500 could be taken as a fair value level. With this expectation announced by Rahul Bhasin, one can hope for index level to touch fair value level.
But still acquiring a portfolio involves tactical action to do various trades and acquire the portfolio. Mya advice is to start acquiring bits and pieces before the big bang buying at a level considered as very close to the lower level.
http://www.livemint.com/2008/10/19234336/Assets-still-not-cheap-Sensex.html?h=E
It is also where you come from. In 2002, it was around 3,000. Six years, we have grown at an average in nominal terms of about 15%. 1f one compounds it will be in the range of 120 or 130%. If one takes this calculation, then the index should have gone to 6,000 or 6,500. Instead it reached 21,000. So we can make ourselves very happy or unhappy. All I am saying is assets even now are not very cheap.(Rahul Bhasin, Barings Equity Partners)
In 2002, average profits after tax as a percentage of sales in India was 1.77% of GDP (gross domestic product). Last year it was 6.77% of GDP. So we are off a cyclical high.
If you look at the liquidity situation globally and you look at how global capital is in India the probability of them pulling out is high and therefore I see more downside.
The real GDP has grown 15-16% a year since 2002, maybe slightly more. Maybe the index should be 7,500.
I am happy to see these statements from Rahul Bhasin. I already wrote in my eariest posts that 7500 could be taken as a fair value level. With this expectation announced by Rahul Bhasin, one can hope for index level to touch fair value level.
But still acquiring a portfolio involves tactical action to do various trades and acquire the portfolio. Mya advice is to start acquiring bits and pieces before the big bang buying at a level considered as very close to the lower level.
http://www.livemint.com/2008/10/19234336/Assets-still-not-cheap-Sensex.html?h=E
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