Wednesday, October 8, 2008

Buy now?

9 36 am Oct 8th 2008: Udayan Mukherji is advising us to sell our furniture to buy stocks now and then don't look at the screen for two years...want to take that advise? Will we regret not taking/taking his advise?

Last time I took Udayan's advise and bought some more Reliance Capital, was when markets had come down to 17000. Sensex closed at 11695 yesterday, and a gap down opening is expected.
I remember when Congress came to power in May 2004, the Sensex had crashed and there was this one person buying stocks dirt cheap, when everybody else was selling. Nobody thought that was a time to buy.

May 17, 2004: Sensex dropped by 565 points, its third biggest fall ever, to close at 4,505. With the NDA out of power and the Left parties, part of the UPA coalition government, flexing their muscle, the Sensex witnessed its second-biggest intra-day fall of 842 points, twice attracting suspension of trading.

He must, even in this market, be a rich man today :)

My Take : Wait & Watch. What do you think?

33 comments:

Aneela Z said...

yara...you are so smart, I wish I could be as into it like you.

Indian Home Maker said...

@Aneela Z No, no, no...Read the post before this to discover how un-smart I have been :) I am staring at a very sad portfolio right now! And don't know if it will ever get better.

Indian Home Maker said...

Below 11000 now!!

Chirag said...

IHM :( I have lost around 50K +.

I think I will keep all my money now in the old mataka and bury in in the garden just like old times :) I will not get interest on but but I won't loose it too.

Vinod_Sharma said...

Time to buy, if you have the money left!

D said...

I bought stocks when the sensex crashed in 2004. Hasn't helped to become any richer!

Indian Home Maker said...

@ Chirag OMG! That's terrible! That is why I am not even looking at my portfolio.
But matka is not a good idea, with our inflation rate :)

Indian Home Maker said...

@Vinod Sharma So you agree with Udayan? Do you really think it is a good idea to buy now? And buy what?

Vinod_Sharma said...

Don't sing another Denver Song..."country roads.." if you buy now and get burnt!

Seriously, you can pick stocks now and play patience. You will get great returns over time. The golden rule of investing, which every one knows is: Buy cheap, sell dear. The problem is in the implementation. When it is cheap, no one wants to buy because of the pessimism all round; when it is dear and rising, no one wants to sell because of prevailing euphoria which suspends belief in gravity!

So, buy now. If you already own great stocks that are languishing today, just buy more of them...and don't listen to 'tips'!

Priyanka said...

Ah, finally a post about stocks. I was wondering how come nobody is writing about it. I bought stocks like I was buying sabzi, last December. Yes, last DECEMBER !!! Can you beat that? When the stocks were at an all time high! I am just investing now to correct the stocks that I'd bought :(

Indian Home Maker said...

@D You bought after 2004 crash!!! I wish I had bought then! I opened a Dmat account just after the May 2006 crash, and many stocks have reached those levels again :(

@Vinod Sharma Thanks :)
and lol @ John Denver's song, it wasn't me but CNBC's Veerdas singing 'You fill up my sensex' :)

Indian Home Maker said...

@Priyanka I was not writing because I was refusing to look at or even think about my portfolios :)
I also bought some stocks last December...and have no intentions of selling anything yet :)
But nice to see so many of us in the blogosphere who are into the stock market :)

manju said...

IHM, I am not that much into stocks but am looking at my TV screen with alarm.
Whatever happens in the stock markets of other countries affects us so much in today's globalised economy.
Maybe back to growing our own grain and keeping cows for milk would be the best bet today instead of investing. Though I don't think many would know how to do that any more.:)

myheadtrip said...

I don't think I ever will get smart enough to understand stocks & shares! ever!!! Would rather put it in a low interest bank account which is what I have done now...this is from the totally financially stupid person :D

Vinod_Sharma said...

I like the idea of buying a cow, rather than stocks! Kam se kam Doodh toh milega!
With Tokyo having its biggest all in 20 years today, you need to brave/foolhardy to buy shares! What say IHM?

Indian Home Maker said...

Vinod Sharma Maybe wait a little while longer...? Since the fundamentals are strong and since Chidambaram has said they are prepared to bail out if it comes to that...I would wait. But no cows for me, I am addicted to the stock mkt.
How about going short? I did during the months after the May 2006, but found the idea very stressful and always bought back at minimum profit, to get it over and done with.

Indian Home Maker said...

@Manju You are right, it is alarming, this Indian man in America killed himself and his family. I also fear for people whose livelihood is Stock broking! It will impact almost everything.
LOL @ buying cow and growing your own grain :)
I am all for a globalized economy, without a global economy our markets will not boom, so no crashes to fear - can we say we will always live in darkness because there will be power cuts sometimes:)

Indian Home Maker said...

@myheadtrip Banks are giving good interest now, so you are the smartest of all:)

preetischronicle said...

The SENSEX is actually the 'sensitive' index it falls and rises on the littlest cue. My buys were fairly spread out and I never sold even when the market was soaring coz of the time frame - i wanted to be with them for about 2 years and I thought by then sensex would break all barriers. However I never bought too and kept waiting and waiting!
But now that the sensex is rushing south too fast, I would still think if we buy stocks of stable company's (performance wise) and those who are sitting with lots of cash on their balance sheets, and have a time frame of about 2-3 years, we are sure to benefit.

Indian Home Maker said...

@preetischronicles - I would also say it is a good idea to hold your stocks for an year or two. I am sure the indices will be greener and we will all be celebrating and then I will link this post :)

A rebel all the way... said...

I would say wait and watch. This crisis has seen various stages - January, March, June and now. The latest one has been the most severe I would say and I guess would be the bottom. But exactly where will this latest phase end is difficult to say. So just wait for some good positive news. Unfortunately today's co-ordinated rate cuts could also not save the market from tumbling. Something more concrete and drastic would have to be done by the Fed and ECB to save this free fall.

Indian Home Maker said...

@a rebel all the way Thanks :)
I agree. It's better to miss buying at absolute bottom, than find we've blundered and it's still sliding!
As the time for elections comes closer, our government will do it's best to save the situation :)
Or so I hope.

Priyanka said...

BTW, I agree with your 'Wait and Watch' strategy, as the market is on a downward trend. I am still buying in small batches to correct the good ones.
LOL @ Vinod Sharma's suggestion to buy a 'cow' :)

Tarun said...

Yes these are tough times.

But there is a lot to learn ...
I got screwed up with RIL TISCO and Guj NRE.
Moser Baer and Maruti have saved face though.

Need to be really careful at what to pick.

Indian Home Maker said...

Priyanka I heard one of the Investment advisors say that one mistake we make is to try to make profit thought the same stocks that are going down, instead we should look for just good buys. I accumulated a huge amount of Reliance Energy (Infrastructure)trying to bring the average price down, after the May 2006 crash. It went very high but look where is it again!!
This guy advised against averaging and in favour of accumulating good stocks, but that's just his advise like so many others', nobody knows who will be proven right :)

Indian Home Maker said...

Tarun Welcome :) Yes it is just not ending! I think RIL will come up again fast. My lucky gems are Bharti, HDFC (not HDFC bank), Rolta and ShriRenuka Sugars. Even after the last crash (May 2006) Bharti was one of the first to climb back up again. And HDFC is one reliable stock. Are you buying yet?
The ones to go down last will be the first ones to come up too, so I hope to accumulate some more of these favourites once there is some stability :)
Maruti is doing fine, compared to the rest of the market. I also have TISCO!

Mavin said...

Wait!!!

You will see the market tank further.

Hoard cash - Bank FDs in a nationalised bank.

You will get an opportunity to buy at sub - 10k levels. Start buying strong companies, good managements with steady cashflows.

Do not throw good money in highly volatile markets. Scrips have eroded by 60-65% on an average. There could be a long phase of bear market. Invest when the market settles down a bit and continues in a range for three - six months.

The Golden Words today

WAIT!!!

Indian Home Maker said...

Is anybody watching the Sensex today? It nearly, nearly went into circuit!!!!Today is another day to keep our portfolios closed :(
And thank God, P Chidambram kept his promise (for now) and RBI is cutting CRR by 150 BPS...all I understand is that this cut is way more than any other one has heard of, and if it had not happened, Banks would have increased their lending rates i.e. our EMIs/Home Loan interest rates. And since this CRR cut provided liquidity...for now the the Sensex did not close in ciruit.

Monika,Ansh said...

Stosck Market is in my blind spot now. I am not even looking at it. My heart breaks at how foolish I was :(

sunder said...

i wrote a blog that the best way to multiply money is to invest in stocks...well will i stick to that opinion ow? i dont know...

these index give a general picture only...BHEL was 1350 when index was around 14-15K..now with index touching 11000 bhel i seeis 1350- 1400?...similiarly see the reality shares it is down by 80%...

people have made money by advising others to invest...there are very few who have made money by investing..since we make money once and loose in another...hmm

but i feel if we dont want money for the next two yrs...best time to invest..

Indian Home Maker said...

@Sunder Welcome :) I agree. This is a good time to pick choice stocks, and may be not all together. This bearish trend will continue for a while it seems.

churningthewordmill said...

this is one thing i dont hv a take on....and i blame it all on my limited knowledge of the financial world...i btr take tips from u!

karmickids said...

The husband who lives breathes dreams stocks and stares at Udayan with infinite more interest than he ever stared at me, says a rally is due. Whatever that means. Enjoy.