Markets fell by 240 points yesterday and has fallen 230 points already today. For people like us markets means sensex!

Markets are driven by 3 factors – Earnings of the companies, the future expectations (price-earning ratio) and the liquidity in the market. In the current market earnings are at their peak – the next couple of quarters is likely to see flat or slowing down of the earnings. This itself reduces the price expectation (or the p/e goes down) and the Greece problems might mean some FII money could get pulled down.

So the market is surely headed down, correct?

Well not so fast. What I told you in para 1 is known to everybody in the market – so you could argue that all this is already played out and therefore the market will remain stable. Difficult to say.

MY PERSONAL view is that some shares in my portfolio that I felt was overpriced and therefore I sold were – GMR Infra, Eid parry (sugar prices are softening), Mahindra Holiday Resorts (looked like a good buy at 340 and a good sell at 544), Hero Honda (needed money to fund Shivam Auto an auto ancillary), Cummins (at some stage in life you need to sell some shares – been holding it for 19 years, so sold a miniscule 200 shares), Dabur, Marico, (fmcg was fully priced??), Ashok Leyland (had a choice of holding on to Tata Motors or ALL, sold ALL), Kerala Ayurveda (If I did not know why I bought how can I tell you why I sold!!?? – but made a fantastic 30% return over a 2 year period, so no regrets), Idea, Themis Medicare (bought @ 188 sold @ 298 – bought because the fundamentals were improving, the p/e was not, SOLD because it went up too fast. Had thought it would reach 300 in a year’s time – it reached in a months time. Serendipity ??)

Shares which I felt was not yet fully ripe to sell, but might fall in the market – Cholamandalam Investment, Coromandel Fertilisers, Gillette, P&G, Colgate, Hindalco, Tata Steel, Hdfc, Bharti Airtel,  – cannot go against the sentiment.

Shares which there was no logic in holding but am still holding – Deccan Gold, Crest Animation – will surely fall, but no action to be taken perhaps purely on sentiment. Sad.

If you are in the mutual funds continue your SIPs – those people who continued their SIP in 2008 and 2009 are better off compared to those who shut it in 2008 waiting for the market to improve!

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  1. Ravinder Makhaik

    A falling market makes an interesting commentary from an otherwise reserved Subra, forcing him to make disclosures, which normally he does not make on this platform.

  2. Not disclosures…just all my transactions – I have done enough of my mistakes. This is just a current update on some more transactions – wise or foolish time will tell. Since I do not run a brokerage firm (any more!) I have no interest in getting brokerage clients. LOL.

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