I saw an article saying ‘Since the market is over heated Amcs should restrict their inflows’.

Honestly I do not know why should anybody think that writers, media, fund managers KNOW what is coming next?

The numbers look attractive so let us go back to 2002. The Index was at 2000. Let us assume it was 20000. Then it went to 3000 (obviously assume 30000). At this stage did it look overheated? The answer is YES.

Then it went to 60000. Which means it had doubled. And it was actually an INFRA rally. I saw the index go up 7 times to 21000, but my portfolio of Fmcg, pharma, etc. did not go up. Yes the infra – LnT, Thermax, Tata Power, Hdfc bank, Cholamandalam, Kotak….had all gone up for sure.

SHOULD I HAVE SOLD EVERYTHING AT 6000 AND WAITED? 

Well I did not read too much so I did not. Lucky me!

I did sell Tata Power, Chola, Kotak, LnT, Hdfc bank – simply because they had run too far ahead. No, I did not sell Colgate, Nestle, PnG, HUL, ITC – they had not participated at all. I could see tons of value in the market and I did not have anything to sell!

Even in the current market it is a stupidly constructed Index that is up. I can see lots of shares at good and reasonable valuation. Yes of course the market is heated up – BFSI is gallopping no doubt. However at Rs, 400 Sun Pharma maybe a good buy. I AM SAYING MAYBE, NOT RECOMMENDING. Similarly there could be other shares which have not gone up, or actually gone down!

So if you are an investor, do tons of balance sheet READING. There could be some good value gold nugget hiding there. Read Buffett and other writers and come to your own conclusion.

Which sectors have really participated in this rally? Yes Fmcg is high, banks are in the stratosphere. However many other companies are not in such high valuation. Fertilisers are not. Some small fmcg are not. Forthcoming IPOs are being seen as a lottery.

So the market is EXACTLY AS IT IS.

Some shares are over priced, some are cheap, some are anyway worthless……go take your pick.

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