It is an arbit number I agree. Why is 20% fall called a bear market and a 19% fall called a correction?
What if the market has fallen 20% and your portfolio has fallen 25% ? were you in a bear market even earlier?
The media will tell you that we are in a bear market and you should be brave. Then they will go on to use the following words:
heavy sell off, market crash, huge NPA, bankex crash, what is hurting the markets, how you bleed in a falling market, record sales of stocks by FII, FII selling is unabated, Puts are gaining, market sell off, collapsed, complete sell off, fall by 30-40%, good news being ignored, new lows, new 52 week low, will we touch the new 200 week low?, nifty new low, market is down AGAIN by 2% today, on a weak market it is falling further, Euro crisis, Japanese crisis, China melt down, China completely gone, Currency crisis, Cash flow crisis, Trillions of redemption in Emerging Markets, the loss of market cap fall in world market is 340 Trillions, Apple has lost 200 billion in market cap (ignore the numbers, it is just to scare you not necessarily accurate), carnage, value trap, buying put options is profitable, be careful in a slippery market, catch a falling knife, bleeding, ROA of all banks is NEGATIVE, international banks sell off, all banks sell off, all banks quoting below book value, state run banks may go negative, Europe and Japan are making matters worse, languishing in the depths, red in the market, blood in the streets,…..
and you are expected to stay calm. The only way you can stay calm is by knowing this:
- bear markets and bull markets are linked. One follows the other.
- Economists say it is healthy, but when it happens, they see whom to blame!
- if you are a new investor and you do not panic, pinch yourself. New investors will be made to panic by the MEDIA.
- Bear markets are easy to handle if you stay away from ticker channels
- Markets are emotional. So people who were looking for better entry points panic instead of buying.
- You cannot go wrong buying some brilliant scrips, but I dare not name them in a public forum.
- Buy and hold looks good in a bull market. The media will now do articles on ‘how debt would have given you better returns’
- Your job is to laugh when you are actually scared
- Fund managers will suggest rising SIP for 240 years or their retirement which ever is later
- You should also talk to fund managers who have retired
- If possible you should talk to Long Short Fund managers who have more flexibility and are expensive to hire!!
- Talk to traders, brokers, investors and fund managers – you will get a balanced view
- Your favorite market pundit (no I am not one) will not be able to help you, you have to do it yourself.
- Investing, sex, swimming, driving, running, cannot be learnt from books.
- History is a great indicator of what all can happen. What is happening is new.
- Fear is natural, media watching and panic is optional. You are choosing it.
- Discovery, MTV, National Geographic, can teach you more about fear and panic than the ticker channels.
- Seeing ticker channels is foolish, reacting to them is fatal.
- Staying calm is the only solution, but then, meditation has to be learnt, it cannot be taught.
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