What time is it?

Ye fatne wala time nahi hai, ye bull market correction hai.Most people will be out of the market in no time and when it recovers, only the true believers, who have stayed invested and bought more will be rewarded.

This blog emanates from a conversation I had with my wife yesterday when the screen was bleeding and indices fell another 3% for the day. Portfolio ofcourse would be down some more and we scrambled for money to add something we always wanted to buy.

Basically it happens this way- it’s a Bull run, market falls, you buy, market recovers, you feel happy. It goes on until when it dips and you buy, market doesn’t recover. Then you see it happening for some time that whenever market moves up, more selling happens. Now you’re in deep shit. You see market recovers 100 points and falling 500. So you stop buying and get out of the market. Then one day, bull resumes its upwards journey. Market moves up and people sell. Voila, it doesn’t fall. People cover their shorts and market zooms upwards on thin volumes. By the time people gather their nerves and begin to participate, it’s already up good 10% and mst stocks which have fallen are up over 15-20%. Thus, those who went out not only sold at the wrong Time, they also missed on the gains when it recovers.

Having the nerves to buy when your portfolio is down nuts and there is bad, very bad news on the screen required a sense of maturity which if you develop, and you don’t load up on junk or the fancied stocks, you’ll make handsome gains.

Two months ago, India was the shining land of Sun which was on path to recovery and CNBC made you believe it’s India’s decade. You wanted to buy Tata Motors at 540 believing it’s marching to four digits. Now two months and some Omicron cases later, you don’t buy it at 440 because their will be no sales as there is an impending lockdown maybe and what not. Well, I’ve spoken about it multiple times that when the price is right, news will be horrible and screen miserable.

In order to sustain gains in markets, you’ve to develop a sort of immunity to market grapevine. You’ve to believe in the work you have done and that the stock is a living company which has survived multiple decades of turmoil and this too shall pass.

The problem is we tend to focus on decadal growth stories when the market is right and pay a heavy price buying into the. On the other hand, when the market falls, we tend to believe the company will never make any money . The biggest fallacy of stock market is to equate stock price with company’s future.

So what am I saying here? Nothing different. Stay invested, fully and totally. Buy into what you believe are the companies which can make greater profits over three five seven year periods and which you believe are on the right side of technology. This has been my biggest learning. I’m now only looking to invest into firms which are adapting and developing new technologies and which can scale non-linearly. Happy investing.