As mentioned before a couple posts back along with charts of nifty, we have had three major falls and three major rallies since last October. i.e within last 11 months. Each time there is a different narrative as to the reason of the fall. And similarly with rallies, there is a different narrative each time. The sectors that rally within these nifty rallies keep changing, barring a few names which seem strong enough to ride all corrections with minimal damage.
Few weeks back there was the theory of de-coupling from rest of the markets because “India was a shining example of growth” and once this correction from 18 k began, all this de-coupling theory got punctured.
So for someone who wants to worry, markets will provide enough reasons at any given point of time to worry. For those who want to go stock specific, things cannot be better. Each correction provides very good opportunities to find winners and ride them. The other option is to do investment in compounders in an SIP mode.
For me, the guru mantra of cutting the weeds and watering the winners has always worked all throughout these corrections. And as long as that continues, there is no reason to give up a strategy that has worked.
Some day we might have a bigger correction or a bigger rally, which might surprise us, but the basic idea is to make hay while the sun shines. Make as many hundreds as possible against weaker bowling attacks, so that when good bowling attacks get you out cheaply, your average does not suffer.
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