Hmmm...It seems that the focus of this blog is gradually shifting to trading rather than medium/long term investing.

:-)

True, it sure is like that right now. I have no hopes for most securities for my preferred timeframe of 1 year or so. Very few stocks seem to have the underlying strength, (RIL is one of them, Kamat hotels another) so I have to take a more short term approach to make it.

As I've said this is irrational exuberance that's going to take the market to new peaks and I must make the best of the move and get out before it hits the fan (or immediately after it does).

I'm not really a long term investor to be honest, because I've seen too much damage done by a buy-and-hold approach. Right now I have two choices: Sell it all and sit on cash, or trade with honest stop losses. I'm choosing the latter today - who knows, when the tide turns, I may find good longer term stories.

I'd say keep it this way only -- some trading and some investing. I have an interesting thing to share, my stock portfolio does not seem to appreciate in the same way the broader market has. In fact, it's been static from 16-17k journey. Should I exit? I am only into banks, real estate, cement and power utilities right now. You would say buddy how can that be these are _the_ momentum plays but tell you what for whatever strange reason my stocks have not reflected the greater market euphoria. The good thing is that they still command a reasonable PE. The other thing I want to ask you is that I have 0 idea of F&O but from what I gather they seem to have an effect on CM prices. True?

F&O does impact CM prices because of arbitrage created. If the F&O demand goes up, it could push up or down the price of the future. An arbitrageur (people who buy cash and sell future or otherwise) will immediately pounce on an opportunity and the cash price - the price of teh share as you see it on the papers - will come close to the Future price.

In terms of being static - I can see why you have been more or less static, because most of the gain has come in a few stocks - RIL is the biggest winner.

Most of the others have barely moved, less than a few percent - in fact even the momentum movers have slid back (real estate, cement and some banks). Power is a mixed bag and will continue to be, because of huge levels of government interference, policies and in general, inefficiencies in teh system.

For those stocks with a reasonable PE, stay invested. This exuberance is not done yet. I have only recently started hearing small news of "Sensex will touch 25,000" and so on. The "cautious" approach of most advisors is slipping away.

It's not yet euphoria - but it will be very soon. Usually these things take time to develop, but with the speed information flows today, cycles have reduced in time. I think if we cross 18,000 in the next two weeks (something I have a feeling we will) the euphoria will kick in.

Still, this doesn't mean your stocks will improve dramatically - the next 1000 points may only see a few stocks kick in (RIL for one, Infy is looking like another right now, Tata Steel is a third) and the rest will follow slowly. Only after the euphoria reaches a frenzy, do ALL stocks rise like crazy.

You can either wait for then (it may take a long while or like I seem to think, a couple weeks) or if you're not happy with this volatility, exit and buy debt mutual funds.

It's a tough decision of a rupee lost in opportunity versus a rupee lost in volatility.

Dear Mr Shenoy,
First of all let me say thank you for your wonderful blog. It has become part of morning reading , almost like the pink papers. I have been market follower for few years and have made my cut of the money.

And yes I have the feeling in the gut Infy might start making the news circuit close to the Quarter results...

Could you please list a stocks that may be a good investment for 3-6 months if market crashes in next week? Planning to invest Rs 1 lakh if market crashes within a week.

Regards
Raj

Hi Deepak,

I am not sure what a rights issue is, something like, the Indian Hotels Co is going to bring in, thats the news today.
Suppose I own a 100 shares of Indian Hotels, then whats the implication for me??
Please comment.

Regards
Sujit

Hey deepak,

I entered RNRL at 29-30 levels and am still holding. I dont play pure momentum plays and this was my first. While I am still moving from booking all profits , to complete exit, to no action, I read this interesting piece about anchoring bias in such cases. So I am going back and trying to analyse before I decide about RNRL. But yeah, this last 1500 point has thrown some of my workings off track - TVS, Ashok Leyland - where I thought were long term bits, am not sure if I play the momentum and then re-enter at a later option...

sujit: Means you'll get a form by post where you need to subscribe to additional shares and pay some money. You have to act...I don't know for sure when this is supposed to happen, maybe you can contact the company for more news.