Just like 1929 and then 1987, and then 2001, and then 2008!!!
So stock market is at all time high and there is so much gush of liquidity that all investors are astonished. Even after so much of FII selling, markets are at the top because of support from the domestic investors. With every Mutual fund manager brainwashing for SIP’s the markets may have no dearth of liquidity in near future. Mutual funds which are 100% invested all the time are the happiest lot and fund managers who are or were waiting for markets to correct are having a hard time.
So for last one month markets are flirting at 9000 level to 9300 level and we are booking profits bit by bit.
We have booked some profits in Adani , Rain , Westlife ,Escorts , Dewan housing etc and sitting on 15 % cash as of now. Some of the profits booked from small and mid cap like associated alcohol etc are plowed back into Reliance and Tata Motors.
So, it’s tough times as — “I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy. –Warren Buffett”
Warren Buffet gave two rules for successful investing.
(1) Don’t lose money
(2) Never forget Rule no 1.
Why did he talk about not losing money instead of telling us to compound our capital at very high rates? This is because compounding works against us if we lose capital. As they say To finish first you must first finish. The key in investing is to stay in the game for a very long time without losing a lot of capital. This is what our models [Evolution, Warren Buffett, Moore’s Law] did. They played the game for a very long time without losing much. (more…)