If you are one of the many investors who were rattled by yesterday’s savage fall of 500 points in the Sensex owing to the disappointment in the Railway Budget, you need to listen to the soothing advice of Daljeet Kohli.
Daljeet is a battle-hardened veteran who has seen many booms and busts and lived to tell the tale. In his latest advisory, Daljeet straightaway tackles the core question that is haunting investors: What if the Union Budget also disappoints and the markets tank like a ton of bricks: Daljeet answers it with clarity and quiet confidence:
“Stay invested, hold on to whatever you are holding. Do not panic. We will wait for Budget announcements to make a call on whether to use dips as buying opportunity or not. Our call would be more stock specific because immediately after the budget, result season will start & stock prices will react more to quarterly numbers than macro factors.”
At this stage, we must also recollect similar advice given by Sanjoy Bhattacharyya in September 2013 when there was similar turmoil. “Stay Calm. Buy Stocks” Sanjoy said and even recommended a few stocks. When you look at the stocks and their prices today, you will kick yourself for not listening to this market veteran. There is similar advice from Ramesh Damani and Prashant Jain.
Warren Buffet put it beautifully when he gently reminded investors “The lower things go, the more I buy. We are in the business of buying”.
Rakesh Jhunjhunwala’s own recurrent and spectacular losses of Rs. 1000 crore + and how he deals with that will tell you that such crashes are not the end of the World.
If you want even more inspiration, you have to read my piece “Don’t Panic – Use Stock Market Correction To Buy Top-Quality Stocks”. In this, I have embedded the YouTube videos of that fateful period in October 2008 when there was a “market melt-down” and “bloodbath” and the lower circuits were triggered off. The commentators in the video make it look like it is going to be an everlasting misery. Yet, we know how just a few months later, the tide turned and the markets rallied strongly. Anybody who had bought stocks in that period would be a millionaire today.
Speaking for myself, my portfolio has a strong foundation of powerhouse stocks like HDFC Bank, Page Industries & Hawkins Cooker. It will take more than a minor tremor to ruffle these stocks. I also have a huge chunk in Pharma & Info-Tech stocks. The best part is that these stocks are not overly dependent on the Indian economy. Instead, if there is a huge sell-off, they will benefit because the rupee will depreciate and their earnings will increase. I also have a chunk of money in Infra and NAMO stocks. These stocks will take it on the chin if the NAMO dream evaporates. However, that’s the price you pay for being adventurous and I’ll just wait for Daljeet’s stock specific advice to decide what to do with them.
P.S: On a lighter note, one savvy investor who will be vindicated if the NAMO dream does turn dry is Parag Parikh of PPFAS Mutual Fund. His strong-holding of foreign stocks will hold him in good stead then.