Gordon Gekko rightly said that a Fool and his money are lucky to have been together in the first place.
Well, if you are one of those gaping at the raging rally in the stock market and cursing yourself for not buying quality stocks when the market was down and out, you know what Gordon Gekko thinks of you.
Rakesh Jhunjhunwala and Shankar Sharma rarely come out and tell investors when to buy stocks. However, both these masters did step out and sent out a clarion call that investors must step out of their rabbit holes and brave the markets.
Much like Warren Buffett had done during the great crisis of 2008 when he said “If you want for Robins, the Summer will be gone“.
Rakesh Jhunjhunwala, with his multibagger stocks like Titan Industries, CRISIL, Lupin etc, explained that the entire depression in the market was due to inflation and the corresponding high interest rates. However, these factors are necessarily temporary in nature. The high interest rates result in a cooling down of the inflation and a cooling down of the inflation means a cooling down of the interest rates. Rakesh Jhunjhunwala opined that we were close to the peak of the interest rate cycle and that when interest rates begin to taper down, the markets would soar. Investors should position themselves in the beaten down rate sensitive stocks said Rakesh Jhunjhunwala.
Shankar Sharma is usually very reticent. But this time, he couldn’t hold himself. He advised investors that this was not the time to be defensive and that the current environment was actually an opportunity for Indian investors to buy into quality stocks. Shankar Sharma advised that investors buy rate sensitive stocks like Autos and Banks. Not content with giving general advice, Shankar Sharma even identified two stocks – Bajaj Auto and Tata Motors and gave strong logic to back his recommendations. Shankar Sharma prophetically predicted that investors could easily make 20-30% return in just a few months. And that’s exactly what happened. Both stocks and those of the Banks are on fire and investors are rejoicing.
If you don’t trust people who have made millions and billions on the stock market, who will you trust? If you are averse to timing the market, then the best thing to do is to follow Raamdeo Agrawal‘s timeless advice – to start a SIP and keep nibbling on your favourite stocks all the time without bothering about where the market is headed.
But whatever you do, don’t stay out of the market!
Model Stock Portfolio 2012
High Dividend Yield Stocks For 2012: HDFC Research Report (109.5 KiB, 14,676 hits)