Subra the market is crashing what to do?

The market is not ‘crashing’. The market had hit a peak of 40,000. At least till it reaches 32000 it will be called a correction. Far more importantly ‘crashing’ is a wrong word. You can say it fell till yesterday. Today what will happen none of us know.

But Subra the market is not going up for a long time, is it not?

Maybe. I have no clue how much up it should go, so I can’t comment on that.

Subra I have bought some shares – like Ta Mo Dvr, Tata Power, Tata Steel, …all good quality shares. I am losing money in all of them what should I do?

I have no clue why you bought, what analysis you did, and how long you will hold. Most importantly I do not have PMS license so I can’t comment on these shares. Personally I have Ta Mo Dvr, and I am also bleeding badly. Luckily some DVR I had sold…but I bought it back in a hurry. Maybe I should have waited longer.

Should I move some money to gold?

I do not know about that. I have some gold in my portfolio. I do not agree with Warren Buffett’s theory that gold has no role. I have very little gold, very little debt, ..I am a focussed investor keen only on equities. So wrong person to ask about asset allocation.

Should I invest in US Markets?

Again difficult to answer. Personally I have invested in the US Markets over the past 5 years. I do think it is a good idea. HOWEVER, do remember that the US market is booming and hence the PE looks small (Google at 20 for example), and Indian markets are at the bottom of the earnings. See the IT companies like Wipro. It is available at a PE of 16. Looks low? do remember IT companies have not suffered…So do not get carried away by PE. TA MO has posted a HUGE loss which means the PE makes no sense.

I also bought some other shares on GREED..could you comment on them? Jet Airways, Dhfl, Suzlon, Vodafone-Idea, …I have lost about Rs. 20L in this. What should I do?

Well you should kiss that money goodbye. Its almost always gone. My total investments are about Rs. 40L. In some shares like Vodafone I have lost much more than others. In Jet Airways I have lost Rs. 5L – I am assuming that the share will not go up much further. I have no clue about Dhfl and Suzlon.

But Subra if the market goes down it should go up no? I was wondering whether I should sell of everything?

Well I have no clue what you should do. Seeing your portfolio I can assure you that you need an adviser. You need to understand risk, asset allocation, balance in your portfolio, etc. God bless you. I am here to write my thoughts about investing. I can’t teach you about which share to buy, how to build a portfolio, etc. You have to learn it yourself.

 

 

 

 

 

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  1. Add to the Crash list : Yes Bank, Manpasand, Vakrangee, JP and LEEL. Even Mahindra and Ashok Leyland are at nearing 5 yr lows.

    I always tell people, don’t get in to direct equity. Get into MFs through SIPs. With bit of luck, you might beat inflation but not guaranteed formula.

  2. Krish, I can’t comment on other shares but – Yes Bank – there is fundamentally very little wrong in it (vis-a-vis other top banks)…all have NPAs.. all have had bad books for an year or so… I think it will bounce back in next 3-5yrs…
    SIP is THE right way to go as your first brush with equity.. however, after having adequate exposure (adequate is again subjective to an investor), he/she must get into direct-equity too. Now if an investor doesn’t have patience or gets panic-attacks with a downfall – then they will behave the same even when MF goes down..

  3. Mohit, I completely disagree with you on Yes Bank. Unlike other private banks, YB aggressively pursued Corporate loan growth which is hurting it much. We all know NPAs associated with Corporates is very high and every quarter, some new story emerges. Complete picture of YB’s association with IL&FS still to come out so as with other NBFCs who are on the verge of collapse. The problem with YB is two fold. It can’t raise funding at attractive terms and NPAs are still likely to grow putting its business model at complete risk. In 3-5 yrs time, YB might not be there and could be the candidate of takeover or merged with other bank. Everyone is entitled to their own views and my post is not intended as counter argument.

  4. Sir, is there a freaky correlation between Dow Jones Index and Sensex, From observation (yahoo finance overlay sensex over dji) it is strongly a 1. When DJI goes up a bit, our markets climb up with double speed. when the DJI falls a bit, we crashe with double speed. I haven’t seen many days when they move in opposite directions. Significant portion of our market caters to US markets through IT services and pharma. May be that’s why… Whereas fundamental valuation of individual stocks is relevant, in global context it is like DJI is chaining sensex and just pulling our index here and there. Our market participants have so much of obsession with US index!

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