When the eminent economists at RBS yelled that investors must “sell everything” on the basis that “danger is lurking out there for every investor” and “this looks very much like 2008” we had a good laugh at them.
Similarly, when George Soros, the veteran & legendary trader, surfaced from retirement to warn us that the present crises is a “serious challenge” and “reminds of the 2008 crises”, we mocked him and wondered whether he had lost some of his marbles.
Today, there are no smiles on our faces. The Sensex plunged 807 points (3.4%) to touch 22,951 while the Nifty plunged 239 points (3.32%) to touch 6,976.
The markets are now officially in Bear market territory because on a YoY basis, they have lost 20%. This was confirmed by Sridhar Sivaram, investment director at Enam Holdings.
“This is a bear market … I don’t think this is bull market without any stretch of imagination … The asset class itself is facing a bear market … this correction was overdue because we were basically a hope trade which was continuing to the last 18 months and now the fact that even globally the headwinds are against risk appetite right now…. We haven’t seen any selling at all. So, if this happens we will see some bit of selling coming from emerging market funds who have heavily over-weighted India …” Sridhar Sivaram said with the warning that if the EM Funds decide to exit India, the selling that we have seen so far will appear to be like a picnic.
It goes without saying that a fall of 20% at the Index level means that individual stocks, especially mid-caps have lost much, much more of their value.
The worst case scenario appears to be here because even the Gurus are now buckling under the pressure.
Sandeep Sabharwal, who runs a popular stock advisory service, offered a “special discount” to new subscribers.
On the request of many
Spl discount code for WINNERS PLAN under https://t.co/zSSEbAv54G stock advisory is
PANIC3000
Valid till 18th Feb— sandip sabharwal (@sandipsabharwal) February 11, 2016
While Sabharwal was obviously joking, one can sense the state of mind of the market participants.
Porinju Veliyath, the eternal optimist, also appeared to be shaken by the intensity of the fall. He advised traders to take refuge in the Bhagwad Geeta even while maintaining a brave face and saying “Can’t feel bearish still; I don’t give up!”
Can't feel bearish still; I don't give up!
Some badly affected traders seek refuge in Bhagwat Gita:
Tum kya leke aaye the,
Kya lekar jaoge????— Porinju Veliyath (@porinju) February 11, 2016
However, Porinju was clearly feeling the strain because his favourite stocks continued to get hammered. Sahyadri Industries slumped 18% while Royal Orchid tripped the lower circuit filter by plunging 10%. Arvind Infra continued its southward journey by plunging another 10%. It also tripped the lower circuit filter.
Fortunately, Porinju did not lose his sense of humour. He pulled out an old tweet where he had recommended Unitech when it was at Rs. 17 and had opined that it would surge 50% to 100%. Unfortunately, Unitech has gone the other way. Today, it plunged 16% to rest at Rs. 4, resulting in a loss of 76% since Porinju’s tweet.
Interesting old tweet: looks like Unitech had another stock-split!https://t.co/mhilve6RDC
— Porinju Veliyath (@porinju) February 11, 2016
David Stockman, an eminent businessman who has been very pessimistic about the state of the markets, warned that the present crises situation is going to deepen. “The markets are being pawed by the Bear right now but they are going to be mauled” he said in a sinister tone. “This is not just the end of a Bull market. It is the end of an era” he added. Stockman proceeded to several reasons in support of his thesis.
However, some Gurus offered a more optimistic perspective.
Manish Chokhani, the former Enam veteran, soothed investors’ nerves by reminding them the present crises is a great opportunity to buy top-quality stocks at rock bottom prices.
Similar advice was offered by S. Naren and Nilesh Shah, both mutual fund veterans. They suggested that investors nibble into top quality stocks in a slow and steady manner.
The unanimous advice of all the Gurus is that we must stick to high quality companies with good free cash flows, low debt etc and avoid junkyard stocks at all costs!
Basant Maheshwari encapsulated this advice by emphasizing that the three things that investors have to check are (i) earnings, (ii) EPS growth and (iii) predictability of that growth.
3 important things to check in our portfolio stocks now 1) Earnings 2) EPS Growth 3) Predictability of that growth. #TheThoughtfulInvestor
— Basant Maheshwari (@BMTheEquityDesk) February 11, 2016
Basant’s advice makes a lot of sense. If we do get stocks which are continuously increasing their earnings, there is a good chance that we will be able to pocket a tidy profit when the tide turns and the markets surge again! Now, the million dollar question is which are those stocks?
Dear Investors friends,
Do not worry. Market will take U turn after touching 18,500.
This is my second message. I said the same message when sensex was 26000.
I have seen lot of ups and downs in market for the past 25 years. (US war, Kargil war, anthrax, sep11 attack, bomb blast, new Govt., Scam, bla bla). FIIS will not get huge returns anywhere in the world (ONLY IN INDIA). They will come back. Operators and FIIS, management are playing the game.
My request:
Do some work or business. Invest your hard earning money in the market. Identify the correct stock; invest; sit tight. Only invest on 10 paid up stocks. (avoid 1, 2, 5 paid up) It will fetch you great returns. Do not involve in trading. It will affect your health(both mentally and physically). Traders are ATM for market operators.
Thanks
YogaRaj M
Great advice sir. But what is the meaning of 10 paid up and 1, 2 and 5 paid up?
Dear investor,
Fave value should be 10.
A stock Rs.70 (face value is one) that means real price is Rs. 700.
Moreover I am not at all suggesting any stock. Please do your own homework. It will give more knowledge about the market.
Thanks,
Yoga
Oh you mean stocks with FV value of 10 not 1,2, or 5. What is the rational that stocks with FV less than 10 will not do well ?
Mr Yoga what do you mean 1,2,5 paid up ? thx
Dear Sir,
Fave value should be 10.
Thanks,
Yoga
Which are those stocks? Ok, I will tell you.
Suprajit engineering, Suven life sciences, Nitin Spinners, Dai Ichi Karkaria, Transport India Corporation, Cadila Health.
YOU ARE WELCOME.
If you want to buy them or not is your choice. But don’t dare say you can’t make money in the stock market 2 years from now. It’s written in plain English above.
The question was for Mr. Yoga but thx, are you sure these stocks are the ones to buy in this market crash when blue chips have crashed so badly ? I mean I really can not see any great value in any of these stocks.
Hi
The choice is utterly yours to invest or not. But don’t worry. If you are a trader, then do not invest. If you are an investor, just remember the company names listed above and check back in 2 – 3 plus years. You will know for sure if I was right or wrong.
There is a secret that Buffet only told certain people. It is called a trigger. Happy investing.
Well thx, I am sure this forum must be visited by hundreds if not thousand of investors so its helpful you put your suggestions here. Will review the stocks. Cannot do this in this situation though. But would definitely keep an eye out.
I have been a investor in the “STOCK MARKET” since 1980 investing my parents savings which they normally kept in “Bank fixed deposits”. Hence over the decades have seen numerous “Bear” and “Bull” phases in the Indian stock market and 20156 bear phase is definitely one of the worst.Investors who have parked long term savings into prime stocks need not fear as this “Bear Phase” will definitely become a “Bull Phase” in the ;long run. Its “SPECULATORS” and “Gamblers” who might either win or lose big time in this bear phase as normally happens.
i don’t feel that market is going to be mauled or anything like that,yes it will see 6800 and 22000 but an 18500 is unimaginable,and yes the gamblers and speculators can also earn during this time by earning in the short term corrections that may follow next week,yes this is a bear market but the indian market’s bull run in still intact, long term investors can get amazing returns by investing in pharma and aviation
Let me be clear about one thing today. Listen carefully. Indians and India and not liked by the rest of the world. They just don’t like opus becuase we hold our identify very strongly. When the rest of the world is suffering there is a spasmic move to include India as part of the problem. The truth is far different. There is no country in this entire world we inhabit that has both the man power, educational prowess, and consumer opportunity that is India. Money will be pouring into our laps. All you have to do is put your hand out. And let me explain. There is hardly a percentage of DII that put money in stocks. If gold and the big fixed deposit money flows in from nowhere but Indians then the stock market will instantly reach 50,000 plus. Are you starting to see a little flash of light. FII,s cannot stomach that India is great compared to the developed nations and will rightfully pull out during turbulent periods. But do you realize that mkney has to go somewhere? And do you also realize that those who have money love to make more, even if their emotions come in the way. Ahh so another flash of light appears. FII will come back to India and realize that where there is money, there is honey baby. Even if it means declaring that India and Indians are the bright spot in this world. Very important. Listen carefully. Before they come back, those who have money should trust the fate of India, and invest to welcome to FII,s when they arrive. India will become a dominant force in this world, and there is no greater yard stick than economic prosperity. The stock market is matched to this prosperity. So the verdict is very simple. If you are an Indian, don’t be fooled out by an outsider. Realize what we are going to achieve in this country, and realize this very fast before our outsiders compatriots come back.
I fully agree with u.I have seen 40+ years of market.Long term investors will win.
Apart from global factors blah blah i feel this is a cunning and diabolic plan of FIIs
to buy cheap and sell costly.Our DIIs are gugus with no clue or courage.
This post is really funny. It is the best post I have read on RJ forum. Having said that the Aaj Tak video is biased. But its equally true that the Modi govt. really needs to pull its socks or else they will lose their supporters. The sooner the better.