Markets fell 1600 points, let us put it in perspective. If the index was at 1600, it would have been a 100% fall. End of stock market.

If the index was 3200, it would have been a 50 percent fall. This too has not happened.

At 30,000 it is a 5% fall. This is PAR FOR THE COURSE.

Let us put things in perspective. If you had a Rs. 10 crore portfolio, your portfolio would have fallen by Rs. 50L – not a hugely big figure right? I have been in the markets since 1979 so I must have seen many, many such falls and I do not remember that I did anything different. It just came and went. Nothing happened.

So what should one do now? Nothing. Sure the market can go down further. After all every investor / trader does not read this blog do they?

What will people do? Typically the conversation will be like this:

Client: Subra, I know 11pm is late and beyond your sleeping hours…but I had to call today…

Subra: abe bolna kya hua?

Client: with problems in China, black money bill, Pakistan,….do you think we should do something?

Subra: If you had asked me last week I would have said “lets go to China..to watch Usain Bolt” – now there is nothing to watch.

OMG Subra get serious. My portfolio is in …

Look this may not be a great time to buy…but take a notebook and write down your feelings. I am saying this because in 2008 when the market crashed I asked you to buy, but you did not. Then you were telling me (in 2010) ‘I should have bought in 2008..ha ha ha…

Let me tell you what. This may be a good time to buy (25/8/15) – not because the market has fallen 5%, but because the market is poised for a run up (no not even that) …because, because, because YOU have money for the long term. In 2016 August you could curse me for not allowing you to buy today, but in Sep of 2015 you could be singing my praises because the market tanked a further 10%. Since you are a well qualified client (CA, MBA, IIT…..) I can only make you understand. However it is your call.

Was 29000 a good index to buy into? Was 65Rs. to the $ a trigger to buy software stocks? Seriously I do not know. I just know that I had sold many Mnc stocks last week (bloody luck) and since I was sitting on cash, I bought, on this Monday. This has NOTHING to do with strategy, it has to do with trading luck. Even if I had bought last week there was nothing to do on Monday. At 25,700 is the index great to buy into? Well I rarely have a view on the index.

Is this the beginning of a recession? Will China’s slow down bring the world economy to a bad shape?

Face it, every country, every company, every individual is trying to live beyond his / its means. Currencies are meaningless with so much of currency printing. We have postponed the Greece crisis. Goldman Sachs still does deals which have too many zeroes beyond our comprehension. The ‘printing’ induced asset bubble could be pricked anytime. The USA is sitting on the next subprime – student loans – and that could hit the roof.

As a retail investor, however, nothing changes. If you are sure of your job (cash flows) for the next 5 years, you have a monthly surplus, your goals are far away continue your SIP. If you have say Rs. 100 SPARE to top up your sip, do not be in a hurry. Top up Rs. 30, and keep Rs. 70 in liquid funds. If the market were to say go to 23000 you will have a chance to invest another 30…and then 21000 invest your remaining Rs. 40.

Then, start with a prayer. It helps.

 

 

I have been in the market since 1979..and have seen about 60 falls which unnerved me…who knows what I did in 1982…perhaps I panicked, perhaps i …ok go …

Enjoy !!

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  1. Hahaha Subra sir… i was waiting for this post. Spot on!!

    Sit back and relax! 🙂

    Personally i feel its a good opportunity to top up
    in some measured Funds/SIPs…But thats just me.

  2. Personally I was waiting for Subra Sir to advice what should do. And I am going to do what he asked all of us to do.:-)

  3. I’d probably wait two more days before buying further. Having fallen 5-6%, there a good chance another short fall is in order (hopefully, too)! The panic induced over-reaction to the reactions in the market is ‘sure’ to pull it down further…may as well make the best of it!

  4. What a fantastic post sir! When markets reached 7850 levels few months back it was a par for course correction according to the so called “experts ” on tv.Now, just because its a single day fall they will shout “the trend has changed”..financial porn at its best!!

    Your mere mentioning of “if the market where to go to 21k” would have sent some shockwaves across for many! Just love it!

  5. Very well said. Very appealing advice in these times when everybody is worried for the fall in his portfolio value.

  6. this line
    “Then, start with a prayer. It helps.”
    reminds me of osho dialogue from strange consequences
    ‘say it 5 times in the morning it clears your throat too’

    @subra sir your way of explanation is simple and funny too.
    thanks for your all the articles i enjoy it all the time.

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