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Saturday, January 29, 2011

Good Chaos,if you are an investor!

Chaos is good for investors.

It allows you to pick good quality stocks for reasonable value and if held for a reasonable period of time will give you a (reasonable) return!

Countless investors(I think they are traders) have approached me in January 2011 asking if the Indian markets are done for.They want to know what will happen in the next couple of days or at most a week.Frankly.I do not know.Seeing it through their eyes the sudden fall in the Nifty&BSE has been brutal,unnerving and even an oversold market is not even giving a 'dead cat' bounce.

On a broader spectrum,from the high of Nov 5 the market has retraced around 12% and it could be 30-40% before it stabilizes.I see no reason not to remain invested in cash and do the ocassional averaging in the Nifty 50 stocks that appear relatively valued at the moment.

The scams,food&energy prices do look  a little scary.....but when during my travels across the country I see the markets,stores full of people,the good credit demand...my faith in the "India Consumption" story remains intact.

That is what I wish to share with you.Back your conviction and at every 5% correction use 25% of your available cash to buy quality stocks and HOLD.