Lets remember cash is king. Especially in the short run. In the long run it is a bad asset class and gives you pathetic return. Of course 8% pre tax in liquid is not really pathetic if the inflation is really 4% p.a.

I have no idea about what will happen in the market, however, I see too much optimism. This is scary for me. Even now when I go around the country people ask me “when will the market go up”? I am stunned – we are not really at a low. Sensex 40,000 is not really a low. People still want the market to go up. We are at an all time high even in PE. Frankly i do not see the PE going up further.

Nbfc crisis has ensured that the Nbfc share prices have been beaten down. Look at Cholamandalam Inv and Finance. It recently raised US $ 222 Million – I am assuming that it would have been sub 9%p.a. Not bad at all. 5% of this amount will go to the bottomline directly. Just repricing is enough.

Maruti is suffering from a young population which is refusing to learn driving or buy a car. We need more research on the age at which people are buying cars, and the age at which people are learning driving. My daughter is not keen to learn driving now – I was dying to be 18 to get my license. I got it exactly one month after my 18th birthday.

Indigo is doing well, but the PE is surely at an all time high. Do we really see it flying high from here? I know not. I am not too happy holding on to Reliance Industries – I just now rode the ride from 800 to 2600 (I bought it cum bonus). In fact I am happy to hold on to Bharti Airtel – I know I will make money, I do not know when. Of course I am playing a high risk game – it could bleed to death duing the time that I am sitting doing nothing.

Frankly Siemens, Cummins, etc. look good from a business point of view – but I do not like the price.

Will NaMo empower the PSU entities? I hope so, but he did not do anything in the first term to inspire me to think that he will do something dramatic. However, NaMo has always surprised us with what he does.

If you have Rs. 1 crore in the bank account, you should put Rs. 20L in a liquid fund, and Rs. 80L in an Ultra short bond fund. And then maybe do a SWP of Rs. 1L into a Multi cap fund – Mid and Small fund.

Of course if I have Rs. 1 cr to invest I will keep it in Reliance Liquid Bees….so that whenever I want to buy some share I can just sell off the Liquid Bees …and I will buy some small cap share – but as of now I have no clue what.

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  1. So what about the money flowing into mutual funds – thru SIP’s? Won’t they have any dilemma on what to do with the money? or do they just keep investing the same stocks and increase the allocation?

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