You have heard this so many times, but just once more -Tough times do not last, tough people do….

Not sure if it is the right thing to say now! Times are really tough. There are no clear signals. The rupee is weakening – BJP says it is because of the deficit and poor management of the economy. Mani Shankar Iyer says it is because the Rupee has been made floating. He says it should go back to being a regulated currency and the rupee should not be allowed to float.

At such a weak rate of the Rupee the technology companies should be happy, right? That is also not happening – their revenues are not going up maybe because of the slowdown in US and Europe. Your tourism industry should be screaming with delight – that too is not happening.

IIP numbers are nothing to write home about and people are anyway skeptical about government figures. Shares which looked good at 120 about 3 months back are now available at 88. You think, now I should buy…and you see the price at 77. What does one do?

Debt yields look very good till you see the inflation numbers. The returns from debt funds will be good only after RBI stops increasing rates – or starts increasing interest rates!

It is difficult to committ to either debt or equity if you take a short time view of the market. Think about it.

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  1. Really heartening to see 10.5% – 11% in the FD for normal people in some banks like REPCO bank.

    Now, if one has a real long term view ( >3 years), this is the right time to enter into some very good stocks and wait for it to double in less than 5 years. For that to happen, the stock picked has to be a good midcap stock which has a strong fundamentals and beaten down in this short term.

  2. Investing in stocks at these times is like a falling knife. One has to be very sure which knife is sharp and can hurt, and which is blunt and is safe to catch. Buy yeah, a good time to catch some blunt knives.

  3. is this a typo? – “after RBI stops increasing rates – or starts increasing interest rates!” should it be “starts DECREASING rates”?

    The time of maximum pessimism is the best time to buy stocks, needless to say for the long term. Are we in / nearing such a situation. Stock investing, at the end of the day is sheer conviction – a well founded one that is!

  4. I do not understand what value add people make when they respond to an article in following ways.

    1) one should look at fundamentally good stocks.
    2) Should have a long horizon for investments
    3) Should monitor their investments periodically
    4) Good time for buying “Good” stocks.
    5) One must be careful while choosing stocks. etc etc.

    Everyone knows that these are theoretical and important concepts to be kept in mind while investing. At least most of those who are reading this blog do know about it.

  5. The IT revenues are not going up because most ( about 80% or so) of future cash flows are hedged… hence there is only limited volatility in earnings…

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