MARKET CYCLES....PART 2....

market cycles are from boom to bust to boom and the amrket cycles will go on and on and on....it is a never ending stories....only the time period of market cycles will and can change.....the most important thing in investing is to know exactly where we are standing in the market cycle.....yes i am knowing it now after so many years of reading so many books and listening to speakers on you tube....but the last book i read was the eye opener for me because what i knew in my sub conscious mind actually played out factually atleast for me when i finished reading the book about the importance of MARKET CYCLES and how can you take advantage of them in financial investing....

usually the market cycle starts from the Bust phase which is Fear  Sad emotion......and ends at Boom phase with Euphoric Thrilling happiness TYPES of emotion....

let us illustrate it with an example.....the world at any given point of time is revolving in between these emotions and in between these market cycle.....and there is nothing else and no other theory exists....i mean no phases or no other emotions....sentiments....there are dark days and there are sun light days.....these market cycle keeps on happening....like the fixed pattern of our planet where the day cycle has a fixed pattern ie the market cycle of a day is for 24 hours...and for one revolution the market cycle is fixed 365 days....but in financial markets only thing guaranteed is  market cycles....but there is no fixed time.....time is a variable commodity in financial market cycles....but it is important to know like in 24 hours in a day if someone asks you what time it is .....then you should know 3pm or say 6am....and anytime in a year if someone asks you which month it is and what about the Season....you would quickly answer... the month of December and Winter season.....the same way you should be able to tell in any financial market where you are currently standing and what type of the trend currently we are in  (BULL TREND OR BEAR TREND) and thereafter what is going to follow....say after winter.....summer will follow the same way you should be able to tell in financial market cycles what next will come....usually in financial markets there are phases of EMOTIONS....and market cycles will follow the same emotional trends because any financial market cycles are run by human beings and for that matter everything on the earth is dominated and run by human beings....and when human beings role comes in to picture the better half of us i mean our EMOTIONS have to play a dominant role...financial markets are nothing else but emotions of individuals running between GREED AND FEAR....and resulting in what we call market cycles of BOOM AND BUST...

IN CURRENT SCENARIO WE ARE STILL 3/4 YEARS AWAY FROM THE EUPHORIC TOP OF THE BUST CYCLE.... WE ARE STANDING RIGHT NOW  IN CAUTIOUSLY OPTIMISTIC MARKET AND WHICH IS TRENDING NORTHWARDS...UPTREND...BUT WHAT IS MISSING TODAY IS THE ANIMAL SPIRIT OF MAN...YES IT IS NOT VISIBLE CURRENTLY THE DAY WHEN THEY WILL START TO BE OVERCONFIDENT AND CARELESS ABOUT THE WAY THEY INVEST THEIR MONEY....SO WE ARE STILL A LONG WAY AWAY FROM THOSE MERRIER EXCITING DAYS....SO THE JOURNEY WE HAVE TRAVELED TILL DATE FROM THE FEARFUL DAYS OF 2008 TOWARDS THE BUST GREED CYCLE OF SAY IN 2022/2023 HAVE BEEN FULL OF UNCERTAINTY DOUBTS PAINFUL....AND TILL DATE I MEAN TODAY ALSO WE ARE AFRAID TO INVEST IN STOCK MARKETS....ONCE THE FEAR IS OUT  AND IT IS THROWN IN THE DUST BIN AND ANIMAL SPIRIT TO INVEST LIKE A DUMB ASS HOLE IS NOT AWAKEN  THESE MARKET IS GOING ONLY ONE WAY THAT IS UP AND UP AND UP....AND AS AFR AS THE CURRENT MARKET CYCLE IS CONCERNED WE ARE IN THE MIDDLE PHASE OF  ONE COMPLETE MARKET CYCLE....NOW THE NEXT PHASE WHICH ARE LEFT STARTS FROM.....

CAUTIOUSLY OPTIMISTIC TO  ENTHUSIASM.....ECONOMY IS SLOWLY RECOVERING
ENTHUSIASM TO EXCITEMENT.....ECONOMY IS RECOVERED
EXCITEMENT TO THRILL.....ECONOMY IS OVERHEATING
THRILL TO GREED......
GREED TO EUPHORIA...

EUPHORIA IS WHEN THE WHOLE WORLD STARTS TO TALK ABOUT STOCK MARKET....STOCK INVESTING AND STARTS TO BELIEVE HIMSELF TO BE WARREN BUFFET AND STARTS TO GIVE STOCK TIPS....ILLUSION OF CONTROL....SUPERIORITY

BUT NOTE IN BETWEEN THERE WILL BE MANY 10% TO 18% CORRECTIONS.....FROM TIME TO TIME TILL 2022/2023.......

Market Cycles....PART 1

Market Cycles...yes it is very easy to know but very difficult to understand...after reading so many books and developing many dots have finally connected so many dots after reading these book just a few days back...yes the dots were already there but somehow wasnt able to connect these dots...but reading helps to develop these dots....sooner or later it definitely helps to connect these dots and will surely help you in your life....

MARKET CYCLES....
market cycles are from bust to boom  and boom to bust.....everything moves in these cycles but the time period is something which no one can predict...but usually in todays environment it usually is of 20 years....in todays socio economic environment and with geo political crisis it becomes very important that such cycles are repeated frequently otherwise there will be chaos round the world....also with the invention of technology things are moving so fast that to procastinate have become a diseases but actually it is not....our brains have been working very fast and decision making making also....which we were never used to .....and also these is happening because of technology...your brain never rest....and now twitter...whatsapp...facebook...are playing havoc in our life.....now mobile technology is become the hour of the day....from banking to email to google to stock trading everything is in your fingertips....so decision making have become very fast....automatic....intuitive.....reflexive....so in such environment it becomes very important to know exactly in which cycle we are in rather than becoming reflexive and fear ruling on us....information over load is going to be massive problem as the world progress and it will become more and more difficult to take quality decisions as human brain is not capable to process so much quantity of information at very fast speed....and particularly in stock market it can play a havoc.....i mean such bscenarios will definitely result in more losses than profits....yes it is true...more losses....you read it right...

Interest Rates......and after effects.....

Here’s what happens when interest rates rise. It’s really simple.

Higher interest rates make bonds more attractive. That’s bad for stocks.

But the Fed is raising rates because the economy is strong. That’s good.

Rates are rising because inflation could be coming. That’s bad.

Rising inflation is the result of higher wages. That’s good.

Higher rates could slow down lending. That’s bad.

Higher rates increase interest income for those holding cash. That’s good.

Higher rates could increase defaults. That’s bad.

Higher rates could hurt home prices. That’s good for buyers.

Higher rates could hurt home prices. That’s bad for sellers.

Higher rates cause the dollar to strengthen. That hurts exports.

A stronger dollar makes imports cheaper. That’s good.

Cheaper imports hurts domestic manufacturing. That’s bad.

Pushing manufacturing to lower-cost regions helps consumers. That’s good.

Higher rates make bond prices fall. That’s bad for pension funds.

Higher rates increase the discount rate pensions use to calculate future liabilities. That’s good for pension funds.

Higher rates give the Fed room to cut during the next downturn. That’s good.

Higher rates have caused most downturns. That’s bad.

Feynman: Take the world from another point of view

how much important is it in financial markets to think differently than the consensus and to analyze each and every option and calculate all the probabilities before making a decision on your guess and thereafter acting on your guess....please watch the video for a different perspective altogether...

https://www.youtube.com/watch?v=b240PGCMwV0

https://www.youtube.com/watch?v=lxIOs9nGoMw


https://www.youtube.com/watch?v=PsgBtOVzHKI

Importance of CHECKLIST and KNOWLEDGE

Dr. Atul gawande is a world famous medical practitioner....he has written many books....one of the books titled CHECKLIST...I happened to read it and from there onwards for each and everything I make a checklist...

Airplane pilots have more than 400 points of checklist before they take the plane to runway for take off...

 Car driving checklist...

Seat on driving chair...

Initially after sitting put both your hands on car steering..   

Then adjust your mirror...

Then put your car in neutral.....

Then start the ignition process by pressing the accelerator gently so the car starts....

After car starts remove your feet from the accelerator and thereafter press the clutch.   

After pressing the clutch move the gear in first position... 

Like wise you make your checklists.....

It can be useful in business..... holidays and everyother walk of life....

You can keep your daily routine also in checklists mode....

College time table is also in checklists mode.....

What ever knowledge I possess about financial markets is because of my passion and due to my self study.....no one was there to show me or guide me about the correct path to success.....it was a difficult path for me to reach as I had to read so many books on Technical analysis..... Fundamental analysis...Pyscholoy....Neuro behaviour.....after almost 9/10 years of reading hundreds of books and articles from Google and watching thousands of videos from you tube regarding investments I have reached to a stage where I can proudly say that atleast I know and possess only 10% of the knowledge about  market.... Still my reading about fundamental analysis is very basic because I am not a C.A. neither I am an MBA...nor a Commerce student.... but one thing is for sure that I am working towards the 5% of the group who have made a fortune in markets and want to be miles away from the   group where 95% come here  to play for thrill and excitement  and part with their hard earned money....by the way it is a very difficult task and not easy to make money in markets.... It is my hobby and passion to know more and learn about the financial markets and my main business from where I earn my bread and butter is different...but whatever you do I life and especially in financial investing it is always important to have knowledge about the subject other wise it will prove very expensive and your experience will be very painful....

How difficult it is to make money in the Stock Market....and only reverse psychology can make you money....

No one could have made money in these market because by January all were egoistic and all thought they are Warren buffet.....Rakesh jhunjhunwala.....so in the pursuit of more profits they forgot that one day will come they will have to sit on the bench and just watch market throwing lifetime opportunity to buy at very good correction prices ....but because their portfolios were massacred they enjoy sitting on the bench and eating lollipops.....😃😃

When the market goes up all the idiots also make money.....in stock market it is never ever about how much money is been made.....it is always about Risk Reward ratio and probability.....how have you safe guard your investment by buying at very low prices and when valuations are cheap....

I rather make less money than be sorry about losing all my money..... first principle of investment....

But my finding says that making money in the stock market is a Anticipation Game...and on News basis...More the bad news which really scare the hell out of you and makes you feel scared and run to sell immediately that is the time more the stock market will go up because the earnings in future has to up and they will eventually catch up....and the moment the Anticipation of earnings is fulfilled then from here onwards the markets will go down for sure because the markets cannot keep on going up and also the earnings...so some day the earnings again has to come back to more realistic mean average and that make take time...sometimes even years...like in the case of Reliance Industries...More the uncertainty and fear the markets will go up and up...more the news are coming as per you expectations and even if the earnings are achieved and now going way above its mean average it means that the bull rally is coming to its logical end...Get out of the markets...but in the above explanation time in which the trend happens is not gauranteed and no one knows......you have to sit or get out of your investment as per above psychology and let time play its own role to benefit your investments...
Few examples like Depression....Recession in 2008/9....Brexit... Greece Portugal bankruptcy few years back....few Wars....Trade war.... Geopolitical tensions....USA.... Russia....North Korea....Home Politics....Scams....monetary policies....inflation...bad company results and fundamental.....all happened and because of it many uncertainties were born and created but still the stock market went up....yes when the news are bad then only the stock market will go up because it discounts that in the future good days will come back and the average long term trajectory growth will again be surpassed once the good news flows start coming....so these future growth is discounted for many years in advance assuming that one day the growth will follow and it will come for sure....but no one knows the time period....tha t is something the investor has to live with.....

Note: other aspects are also important like fundamentals of the companies...buying at very low discounted prices etc...but i am not discussing that for now....

Uncertainty and Fear rules the stock markets and sets the future trends....

last week i had written an article....Something different had happened in the markets these time around...Nifty was at lifetime top levels and Midcaps and Smallcaps were correcting as if there is no tommorrow...Both the Caps were down by 40% to 50%...and some chor and kacharaa stocks are still correcting till date at the time of writing these article...



I have a strong gut and intuitive feeling.... something is not right in the market....the smart investors are fooling us is what I feel.... because NIfTY is at top level but most of the A group companies are CorrEcTinG as if it a blood bath out there....while Midcaps and Smallcaps have been butchered completely....

Be careful of SUCKERS RALLY.....many StoCKs in Midcaps and Smallcaps in one day only are going up by 5% to 7%....but they all fizzle out from next day onwards....so be careful and buy StoCKs which are down in price but are fundamentally very strong and not overvalued.... and not highly leveraged and have very good management ....

Are we going through a Suckers rally....to some extent yes....but it is always hard to identify trends in stock market..... and even if you are proved right it is probably your luck or a fluke....but in current scenario something is not right...nifty is at lifetime high and the public Euphoria is missing...I mean there is no active participation by the retail investors.... but these is the way market operates...the conviction is missing in market participants and it is a perfect time for market to go up.... when there is fear only then the market will go up....but then it is a case of   psychology .....  in current scenario the Midcaps and Smallcaps are going through their worst case bear trend.....and nifty is making lifetime high...so in many ways the current trend is different.... and will it be a new norm which we have never come across till date.... therefore rather than firing in the dark.... wait for some more time for clarity to come in the market....but always remember in short term basis in stock market you will most of the time will always be proved wrong by the market... what I mean is the moment you enter such a market the probability of you making a loss are very high.... and making a profit will be a chance of luck only....

Fools will exist in stock market as long as market last..... and people like Rakesh jhunjhunwala.... Vijay kedia.... Ramdeo Agrawal.... have got an opportunity to earn a huge amount of wealth because of these fools who happily come to part their hard earned money to them....these so called fools will always come happily in stock market but one thing is gauranteed for them in stock market.... when the majority of them will leave.... there will only be sorrow for them for sure.... because they have to lose in stock market until unless they are well educated in managing their money and do proper research and analysis of assests they want to invest in....


as i have written in the fourth paragraph that because of Psychological reasons of uncertainty and fear the markets are bound to go up....and the current fear in midcaps and smallcaps will overrule everything in the stock markets and are total attention will be drawn towards these both caps...like fools we have been made the Biat of so called smart investors...there was clear writing on the wall that the nifty will go up and make new lifetime highs but no one knew which companies will contribute to the nifty making new lifetime highs...so as long as the uncertainty and fear is existing in the current market.... nifty will keep on making new and new lifetime highs and the poor retaIL investors will be left out high and dry...

so as per the above explanation the Day the earnings and the gdp growth of economy expectations of the people are achieved we are going down for sure as per the Psychological reasons...the fulfilling of Anticipation and Expectation will get us only disappointment in stock market once they are achieved...therefore as long as the expectations of earnings....the expected growth of the economy are not achieved and still there is total uncertainty and doubts... the stock markets will keep on going up and up and up...lastly MONEY IS STILL VERY EXPENSIVE TO GET....the day money becomes cheap and easily available the economy will collapse eventually and so will the stock markets of the world...TODAY IN THE CURRENT SCENARIO MONEY IS NOT READILY  AND EASILY AVAILABLE AND IS THE PRICIEST COMMODITY AVAILABLE TODAY...SO EVERYTHING WILL GO UP...THE STOCK MARKET AND SO WILL THE ECONOMY FROM HERE....

bUT WHICH SECTORS TO INVEST AND IN WHICH COMPANIES IS TOTALLY UP TO THE INVESTOR...

Above is not a recommendation and is my personal opinions and views only...

PE and Earnings....

The difference, however, is that emerging-market companies are far cheaper. The EM index’s price-to-earnings ratio is 13.3 based on 12-month trailing earnings per share, compared with 21.1 for the S&P 500. That difference is even more stark when looking beyond one year. The EM index’s P/E ratio is 14.7 based on 10-year trailing average EPS, compared with 29.5 for the S&P 500.

To see why that’s important, consider the long history of P/E ratios in the U.S. The average P/E ratio for U.S. stocks based on 10-year trailing average earnings has been 18.6 since 1881, with a standard deviation of 7.3. Those numbers imply that roughly 95 percent of the time, the P/E ratio will land somewhere between 4 and 33. (For stats aficionados: Those P/E ratios aren’t normally distributed, but they’re not far off, with skewness of 1.3 and kurtosis of 2.4.)

It makes intuitive sense that P/E ratios should fall within that range nearly all the time. A P/E ratio of 33 translates into an earnings yield of 3 percent. Many investors would balk at such a low yield and turn to bonds, which would curb further valuation growth. On the other side, a P/E ratio of 4 implies an earnings yield of 25 percent. There aren’t many investors who would pass that up, which would keep valuations from sinking further.

The data for emerging markets is limited, but so far it has closely hugged the range implied by historical P/E ratios in the U.S. Since December 2004, the EM index’s P/E ratio has hit a high of 36.5 in October 2007 and a low of 10.1 in February 2016. Comparable numbers for the S&P 500 during the same period were 30.4 in January of this year and 11.9 in February 2009.

All of that translates into different potential payoffs for U.S. and emerging-market stocks. The price of the EM index would have to decline 73 percent to reach a P/E of 4, compared with a decline of 86 percent for the S&P 500. On the other hand, the EM index would have to increase 125 percent to reach a P/E of 33, compared with just a 12 percent gain for the S&P 500.  

Concept of Holding period for ever is not right....

the concept of holding stocks forever is actually wrong and does suffice....there are few reasons which i will jot down for the readers.....
when Stock prices are high and so is valuation then it is the right time to sell even if the company is the best company of the world....if you own a jewellery set which is the best and you have paid say Rs. 10,00,000/- for the set....and if you want to sell because people want to buy it....will people offer you the price of Rs. 50,00,000/-even  if they want to desperately own it....no ways...for everything there is a price...but not foolish prices....so at high valuations to own the best company of the world is a foolish idea and immediately it has to be sold....
when the management deviates from its course and become overconfident and over adventurous and start buying companies double their nettworth...
also when the company management starts cheating the minority shareholders...
when the company starts accumulating too much debt....
transfers money to its other subsidiaries...
siphoned off money from the company...
when the fundamentals of the company takes a beating...

Midcaps And Smallcaps....the boom boom not over...lol...

Before i start my explanation let me remind you of Boiling Frog Syndrome and our resistance to small changes....before we even realize and come to our senses our portfolio was already bleeding... and it was too late  and we are now sitting on huge losses and by default we become a long term investors for which we had not planned at all...our motto was to make quick money and also get out qucikly...but fate had something different stored for us...LOSS...LOSS...

Yes as per my perspective they are in a Bear Market and the correction in both the caps will still last for some more months... i am damn convienced that the correction will be of atleast 40% to 50% in stocks of both the caps...the few stocks i am following in both the caps...the technical charts of most of them are very bearish and showing a clear signs of a bear market in them...whatever these so called experts say but we are going down for sure...it is for the first time i have seen that the markets are at elevated levels because of few heavy weight stocks which is helping the nifty to sustain those elevated levels but the midcaps and smallcaps are giving way and falling to new 52 weeks low and there are no signs of recovery...i sense that the market is waiting for these so called new investors who entered from November 2017 and who created the froth and the subsequent bubble in the midcaps and smallcaps...until unless they dont sell in panic the bottom will not be formed and these both caps will keep on going down.... Right now they are still in DENIAL mode that such a correction what is happening currently is not true and both the caps will recover very fast...so be wise and invest wise....happy investing for the long term....the above is my personal opinion only....it is not a recommendation to buy and sell...please take your certified financial advisor advice....

PC Jewellers and Vakraange....Scams

Dubious companies modus operandi.....
PC Jewellers
Vakrangee

In 2014....

PCJ was @45...
Vakrangee @45...

In January 2018 both made life time high...

PCJ @600
Vakrangee @516....

Today both are making life time lows....
PCJ @65....
Vakrangee @31...

Now you are a better judge.... and above all if I am not mistaken.... why PC Jewellers was a investor in Vakrangee....
 Both StoCK have same similarity of price movements
Fools will exist in stock market as long as market last..... and people like Rakesh jhunjhunwala.... Vijay kedia.... Ramdeo Agrawal.... have got an opportunity to earn a huge amount of wealth because of these fools who happily come to part their hard earned money to them....these so called fools will always come happily in stock market but one thing is gauranteed for them in stock market.... when the majority of them will leave.... there will only be sorrow for them for sure.... because they have to lose in stock market until unless they are well educated in managing their money and do proper research and analysis of assests they want to invest in....

TV Business channels were biggest enemies of I.T.sectors....and see what happened...

Had written on TCS and Infosys.....

it had to go up because no one was interested in owning TCS and Infosys....

The whole world was running after Midcaps and Smallcaps and poor investors had to part with their hard earned money...

TV channels were popularising Midcaps and Smallcaps..... Eventually they went down.....

TV channels were disregarding TCS and Infosys..... they went up...and both are touching new lifetime highs....

Always do the opposite of TV business channels....

Bear Market for Midcaps and Smallcaps....

Nifty is going up because of very few heavyweight StoCKs like....
Reliance
TCS
Infosys
HDFC Bank
HUL

If the above StoCks contribution is omitted.....then NIfTY is going nowhere....

Also the Midcaps and Smallcaps are correcting everyday on the downside... and individual StoCks are making new lows....
I have a very strong feeling that in Midcaps and Smallcaps we are experiencing a bear market.... because many companies in both these Caps have gone down by 30% to 50%....also the excessive froth which was built up just few months back is the reason we are CorrEcTinG so much....but after the mayhem in Midcaps and Smallcaps is over and investors who have survived these brutal blood bath will be rewarded with unimaginable profits in the next few years....but the coming few months investors who have invested their hard earned money in Midcaps and Smallcaps and especially the Chor kacchara companies will see their money getting transferred automatically to Ramdeo Agrawal....Ramesh Damani....Rakesh jhunjhunwala.... Vijay kedia.....So be wise and stay wise as long as you are active in Stock market.....
Very soon in Midcaps and Smallcaps we are going to experience a SUCKERS RALLY on the upside... and I think it will be a TRAP for retail investors.....

All the articles I send are my personal opinion and views only..... they are not a recommendation for buying or selling....

Pharma stock Prices are still overvalued......

Pharma StoCks valuation are still very high and so they have to correct to more realistic prices or will have to correct time wise so the valuation can catch....and makes more sense price wise and valuation wise.... like in Sun Pharma....the fy 18//19 EPS is projected around @16:50 and fy 19/20 EPS is projected to be around @19.... considering the additional income from Halol plant.... even in fy19/20 if the StoCK is given a multiple of PE20.... The sun pharma stock should hover somewhere around 380....400....
And note nothing extraordinary is going to happen in Pharma sector in coming 3 years atleast... and the way these business tv channels are talking about Pharma sector makes things confirm that one more fall price wise is left or the price will be range bound for the next 2/3 years atleast till the time the business tv channel people stop talking about Pharma sector totally leaving few genuine fund managers like S Naren ICICI AMC...to talk about the Pharma sector....still the retail investors are not tired of investing in Pharma StoCks....the day these last lot of investors are massacred the bottom will not be in place.....

Earnings Valuation....

When the Diff in  Value in the first field is (-21.80)..... the stock low price is 38/-....it means the value of the stock is below its intrinsic value and has a good safety of margin of 21.80% and so stock price is at its lowest price of 38/-.....

But in the second last field the Diff in Value is (+77.88)....the stock price is 1250....it means that the Value of the stock is 77.80% above its intrinsic value and has worst margin of safety and above all these the price of the stock is very high....@1250....

Now how can these be possible.... when the stock provides a very good margin of safety still the stock is at its lowest price.... and when the stock provides worst margin of safety...it is at its highest price... what kind of anamoly is these.... and we human beings are so insane and irrational....yes we are and that is how the stock market runs....

Also if you see in the last field the market realized that the value of the company is way above its long term averages and it's has to regress to the intrinsic value.... and as can be seen  the Diff in Value (12.2) has regressed towards its Long term intrinsic value.... and the beauty is along with it the price of the stock from a high of 1250....has also gone down to @610....

Freeze Mode....Small Changes

Freeze Mode....

Yes aren't we....I mean in the freeze mode....state of inertia...sitting ideal....of doing nothing and let the situation turn around to once again become favourable to you...our brain has become indecisive to take a judgement whether the midcaps or Smallcaps will fall further or will go up....whether to stay invested or to sell in the current scenario.....it's about the ongoing battle in your mind and a full blown war is  waging in your head which at times tells you to sell and at times tells you to wait that the prices will go up.... It's a common fallacy experienced by all investors and these state of restless makes sure that we don't sell and our portfolio becomes Red and the loses  on our investment  goes  up and eventually the accumulated losses becomes deeper and deeper.....no way you can get out of such situation because your brain is not ready to accept the loss and your brain will still give you false hope that good days will surely come and how the hell can you sell your stocks at a loss...so the waiting game starts and the small changes in prices on the downside keeps on going further downwards and we still maintain our status quo...not realising that something is wrong and things are not what they were just a few months back....so these is the time to take things in your command and introspect the current situation and think out of the box and to analyse the real situation before it is too late.... first happens the small changes and these small changes are not easily readable....and thereafter when the changes happening are very large and when they become prominent and easily readable because of these changes the situation is out of our control and we sit on Hugh losses before we gain our senses about the real situation around us.....
Can you see the changes happening in your life on daily basis.....no you will not see changes happening at all on day to day basis ....but yes changes are happening every moment.... every day but they are so minuscule that we can not see those changes at all and neither can we experience those changes.....but when you compare the changes today with 10 years back the changes are massive....and in almost all the things you will see massive changes.....so what I am saying that we human beings are not very good in understanding and do not have the know how to read small changes happening around us....
So in stock market we don't have the capacity to read the small changes happening in Prices..... whether it is on the downside or on the upside.... and by the time we realize the small changes the prices are way up or way down....they come to our notice only when the jumps are like kangaroos...... and then it is too late....

Actually the operators in a StoCK take advantage of these bias which we have....

If they want to take the price of a StoCK from say 100 to 50..... Will they take the price down in linear manner say in 10 days.....no.....but they need to start selling from 100 uptill 50.... So they sell in zig zag fashion...they don't want to alert other investors to know that they want to sell and are selling....so from 100 they start selling and take it down to 96.... Then again they take it up to 99.... Now say these happens in 15 days....now again from 99 they sell and take the price to 93....then again they take the price to 97....these phase takes 20 days.....now again in  third phase they start selling from 97 and take the price to 90.....now the third phase takes around 25 days..... like wise phase 4 happens...then phase 5 happens and in 8 months time the price from 100 will go to 50 and in all these phases because small changes in prices are happening so you won't be able to sell.... and that is what they want....and finally out of frustration you will sell at 50 and the cycle will reverse and again he will start buying ..again to trap new set of fools....I mean investors.....

Relationship between Value and Price

The most important relationship in Investment or for that matter in any financial assets is between value and price....Yes it is and if you leave any one or the other your financial success in no way guaranteed...both can to go together... hand in hand...and it is like a symbiosis kind of relationship...and is of immense benefit to achieve financial stability....
i will give you an example and it is my most favorite example which i tell to everyone whom i meet...

Imagine about the shirt or t shirt you are wearing right now...can you guess what is the price of that shirt or tshirt...
Lets say....the price of that shirt or tshirt is Rs. 2000/-...

Okay now in normal condition and if you think rationally for the same shirt or tshirt  will you pay say Rs. 10000/-...yes you heard it right...and what if some one comes and offers you to buy the same shirt and tshirt for Rs. 10000/-....now imagine your initial reaction...WWWhhattt...are you mad...are you gone insane...daaru ppee kkae aayaa hai...these is our immediate knee jerk reaction on hearing the 10000/- price for the same shirt ot tshirt....and you will say uulluu banaa raha hai....yes he is....right

now in the second scenario if the same person comes and offers you the same shirt and tshirt for Rs. 1100/-...what will you do....you will run very fast to grab the deal before he offers it to someone else...that left out feeling of missing to buy the same shirt or tshirt at 1100/- is very strong and you dont want to miss the opportunity to reward yourself by buying it for discounted price... and it is more wise to buy at Rs.1100/- because the actual value of the same shirt or tshirt is Rs.2000/-

But in stock market or for that matter any financial assets we do the opposite transaction.. i mean when the stock prices are going up we jump in to the band wagon and invest our hard earned money in to those outperforming stocks to make quick money in a short period of time and giving a pass to the valuation side of the picture... what i want to say in midst of the euphoric trend we concentrate totally on the Price of the stocks and forget about the valuation completely...at that buying price of the stock we forget to evaluate...what is the actual value of the company...and we blindly buy because of our greed to make quick short term money...yes as per the first example you are even buying at Rs.10000/- thinking that a bigger fool will come and buy from you at 12000/-...hahahaaaa

but dont curse yourself if you have done the same thing yourself....because it is in the human beings nature to act in such a stupid manner and cause harm to ourselves...and for that reason we cannot reach our goals of financial stability....

as per the second example... now the stock market momentum is downwards and the whole world is selling and the scenario becomes like the same shirt or tshirt whose value was Rs. 2000/- is now selling at Rs.1100/-....what happens in these scenario is you are also selling at Rs.1100/- and because all are selling the price of the stock goes down and as per low price you still get better Value at those discounted prices....the whole world is behaving irrationally and so bargain opportunities are there to grab...but no because we are in fear mood that the world economy will collapse we have to sell irrespective of Price and Value...we have to be the first one to sell before anyone can sell...

and the above saga keeps on repeating in every Cycle of boom and bust...and so only 5% of the smart people who are aware of these folly make lots of money and create wealth for themselves because they are so sure and they know that 95% fools who are active in the stock market will come and loss their hard earned money and indirectly create wealth for them...

Some Recent Examples....

                                            high price         current price

Ambuja Cement                    292                       197
UPL                                       902                       660
Federal Bank                         127                        80
Sun Pharma                          1200                      560

the above list is endless.....price is what you pay...value is what you get...if you pay higher price you get less value...and if you pay less price you get higher value...now it is on you on which side you want to be....ambuja cement and many other stocks were highly priced as per their actual Value and so now the price is regressing towards the actual Value and at one point the price and the actual value price will concide and will be same and that is the time you buy and buy even more if it goes below its intrinsic value or the actual value price...

But knowing the Value is the most important thing and you will have to do that hard work to know the Approximate Value of the company and for that matter you will have to read the balance sheet of the companies...

Midcaps and Smallcaps and Boiling Frog Syndrome

Somehow I feel.... Boiling Frog Syndrome is playing out in Midcaps and Smallcaps StoCks....

Query:  But they cannot die... This theory is not suitable here....

Is the answer I got from one of my followers....and my answer is as follows.....

The theory itself you have misunderstood.... you have to read the theory properly to understand.... the theory isn't about the frog dying or the midcaps and smallcaps stocks dying.... the theory is all about that small changes keep on happening and we human beings and animals adapt to those small changes without even realising whether those small changes are beneficial or harmful... So here what I want to elaborate is that small Corrections happening in Midcaps and Smallcaps doesn't allow us to get out of them....and they keep on going down and down even we realizing that our portfolio is making losses.... Because you always have that feeling back of your mind what if the Midcaps and Smallcaps again start to go up and outperform.... The best example is Penny StoCks you will find in every bodies portfolio....
We don't sell because we keep on adjusting ourselves continuosly and so we eventually adjust our price downwards as prices falls even though on paper we are making a loss.... and we give aashwaasaan to ourselves that one day when my buying price will come that day I will sell at no profit....no loss basis...and so by default you have married those stocks which are going down slowly slowly and so you are stuck with them and now there is no exit... and eventually you have by default become long term Investor....
And so you are stuck with Suzlon... Reliance power...JP associates.... Vakrangee....Manpassand..... Kingfisher airlines....Shree ashtavinayak.....and the list is never ending....

Price And Value Relationship and the Psychology behind it...

Relationship between Value and price...

We human beings are prone to evaluate all things by price wise and we don't have the capacity and power to evaluate all things by its  Value ...we are not born to process Value..... naturally the first thing our brain processes is the price of all things and to us human beings the Value comes second....

Why is it so....

Because giving price to things is very easy and quick job....in our everyday life 99% of the times everyday our buying or selling things is done by Price wise manner only....and correspondingly we don't analyse and evaluate things we buy and sell in our everyday life....I mean it is not possible at all to analyse and evaluate and calculate the Value of all things you are buying or selling in every day life....So our brain is in auto pilot mode and we develop the habit to evaluate all things by Price wise manner....

And also because in obtaining the Value of things you have to gather data.... analyse the data...do calculation form those data.... and then obtain the Value of things which is a lengthy and difficult process....so our brain has to work and consume precious energy in doing such difficult analytical job....so it does not want to spend the precious energy in such jobs and save the same energy to do other jobs and perform our other day to day tasks...So our brain wants to take short cut and moves our attention to The auto pilot system of evaluating things by Price wise manner....and makes us run away from calculating the Value of things....

The reason most percentage of people did not like mathematics in school is because our brain did not want us to solve those analytical problems....

So in stock market we always say Reliance@1030.... Now it will go to @1150/- in few months....and in all these we forget what is the actual Value of Reliance and is it Value for money @1030....
If you read all the above articles I have posted only then you will all understand clearly what is my.... Formula Purchasing price all about... and how it helps to buy and sell a stock....

June 2018: 9th Straight Interest Rate Hiked by Fed in USA

yes just few days back the federal reserve of usa hiked monetary rates for the 9th straight consecutive times... so will have to keep a close watch on the further developments in the stock market...also the FIIs are stright sellers from the last many days...they are nselling emerging markets and buying in the USA markets...also the bond rates are around 3% on 10 year gsec in USA...so investing in bonds is also becoming attractive for the long term basis in USA...

Kaveri seeds , any views

Kaveri seeds , any views

Some one asked me about Kaveri seeds....

I don't study companies which I do not understand....I want to invest in companies which I understand and which falls within my fundamental parameters... I follow only around 55/60 companies and I invest in them as and when opportunities arise....rest I am a human being and so do not possess the ability to study so many companies.....

Psychology It doesn't permit me to study so many companies.... And be master in all of them...
My first principal of investing is to first safe guard my principal investment and then to think about the returns on my investment....
For that even if I am not outperforming the stock markets in bull market and earning just above average returns I am happy but then in the bear market my downfall is protected while other investors portfolio are slaughtered and butchered and their portfolios are all bleeding.... and they have no where to escape....

Sir should I buy lupin at the current price or wait?

Above heading is the question asked to me when Pharma StoCks were already up by 25% from their recent lifetime low prices.....my answer is as follows....

Don't run after pharma StoCks or for that matter any other StoCks... let them come to you.....few days back most of the Pharma StoCks had come to you screaming... requesting and ordering you please buy andainvest in us as we were offering you all very good value for your money at those lifetime low prices and also because no one was interested in purchasing us and we all Pharma StoCks were available at very cheap discounted prices... we thought that from our lifetime low prices we can give you decent long term returns and you can all make good amount of money if you believed and keep faith in us... Why was it so because We all Pharma StoCks were slaughtered and butchered relentlessly everyday as if we will all close down tomorrow and as if there is no future left for us at all... And so because of the fear you all people had you collectively started to sell all of us and in turn because of your foolish behaviour we all became very attractive to invest for long term basis at those lifetime low prices and so a golden opportunity to invest in us at such dirt cheap discounted prices was thrown towards you to grab it.... also we even questioned ourselves why are the investors behaving irrationally and selling us continously and because of their weird behaviour decision and action we all found it very shocking and were surprised how is it possible that we all pharma StoCks are available at such discounted prices as compared to our value...but before we could get the answer to our questions we appreciated by almost 25% and now the bus to invest in us at lifetime low prices has been missed and a golden chance to invest few days back have vanished... But don't you investors find it surprising that when our prices have gone up by 25% from our lifetime lows all of you again want to invest in us....so right now we will request you to stay put for some time and let us again give you one more chance and opportunities to invest in us at the recently made lifetime low prices or still even lower pices from the recently made low prices....but we pharma sector are not sure when and at what prices we will most likely make a  lifetime bottom....but I still advice you to keep your cool be calm and wait patiently and let us all come to you....if we once again feel like.....adding to the above point I once again advice you that the next time I again give you such superb opportunity don't be afraid of our Pharma sector to invest in staggered manner because it might take few years for us to bounce back but we will definitely come back with Vengeance and will give you very good IRR...

The above is not a recommendation to Buy or Sell.... and is only my personal opinion and views....and to draw the readers attention to invest when the prices of StoCks are low....and invest in good debt free and superbly managed monopolistic companies....

June 2018: Boredom is best way of Investing style

Boredom in investing is the biggest gift and best risk reward ratio a long term investor can ask for
If one can in investing live the life of boredom half his job is done....

June 2018: Adapt Stealth nature and Hunt Like a Predator....

Today I was speaking with someone and told him if you want to make it big in stock market stay outside the periphery and patiently observe what is happening and what the market is doing....is the market giving you an opportunity to make money....or is the market going to take away your hard earned money.....
 The day you become a observer in stock market rather than a participant..... will be the day you will attain NIRVANA....in stock market....
 So don't become a participant....wait patiently.... become a observer..... and at the right moment STRIKE....
 Adapt stealth nature and character.....

Always remember how animals Hunt their Prey....they will wait outside the periphery of the prey.... then they will observe the prey....they will wait patiently for the prey to come in their range of attack.... and once they come to them in their Range they Attack and Kill....so in stock market instead of you running after the market opportunities....wait patiently and let the market provide you will Golden opportunities

Also always remember...

The first thing is that markets move in cycles. The first cycle was high growth high quality. Now every bull market is the same, it starts with high growth, high quality then comes to high growth lower on quality and the third phase is just no growth no quality. We are now on the second stage of the cycle. So high growth and low quality will outperform everything else..

👍👌... StoCK market is the easiest place where you can make Crores.... because 95% of the people come to loose in the stock market....and the rest 5% are the people who make wealth out of these 95% losers....

 Previously I was in the 95%....now slowly slowly coming in the 5% group.... hopefully....

 Always follow the Leader in any Field...how Warren buffet has made money in stock market....if one studies his rules.... principles.... ideology....he will find it very easy to invest in stock market...the process is very simple but difficult to stick to it....

JUNE 2018: Commercial Real Estate the next big thing....

Commercial real estate presently is a very good example of Fear basis investing..... people are scared to invest in commercial real estate.... from 2007 the commercial real estate market has gone no where.... and the time has come that in coming few years they will and should give very good returns in the long term.... People are under invested in commercial real estate and it is going to be the next big thing.... hopefully I am not proved wrong....but waiting game and patience will be the key....

JUNE 2018: SALE SALE MONSOON SALE

SALE SALE MONSOON SALE !!!!!

SUN PHARMA....64%....
LUPIN....66%....
DRREDDY....57%....

SO HOW MUCH MORE SALE ONE NEEDS FROM TOP LIFE TIME HIGH PRICE....

OFFER PRICE BY MARKET IS VALID TILL STOCKS PRICE LAST....

Perfect example of Fear Neurological Syndrome....Lots of fear chemicals such as Glutamate... Cortisal....Adrenaline is immediately released by the retail investors as soon as they listen to the word PHARMA SECTOR...YES...Immediately is what i said...knowingly or unknowingly to the market participants...they will not even realize that their brain is working overtime to take them away from danger even if the market offers them golden opportunity to buy at dirt cheap valuations and to make tons of money on long term basis...why ??...i will tell you the reason...as we human beings are prone to evaluate things on Price basis and not on Value basis...

Suppose you have seen the price of Sun Pharma @450/--Did you buy at that price...NO...It will immediately come to your mind it can go down to @200/-...Yes...Am i right or wrong...you tell me...what stops you to invest in sun pharma @450/-..Naturally your Insula and Amygdala the fear part of the barin have stopped you from venturing in to unknown waters...and over here unknown waters is how much the stock price of sun Pharma can go down...Yes you are right and so is your Fear Brain...But then what about the valuations of Sun Pharma....because we human beings dont have capacity to exactly know the Value of things and so we cannot evaluate in VALUE terms...But we have a natural instinct to put a price on each and everything...So we face these difficult problem in investing and missing out on golden opportunities thrown towards us by the stock market...because we think how far the price can go down rather then applying rational thinking ...Now at the current price of @450.....is it VALUE for money....Value is thrown in the DUSTBIN and Price takes the centre stage...But that is what smart investors want of you....so they can make money and you all can loose money....

So when there is sale in the stock market grab that opportunity to invest for long term basis in good fundamental strong companies with very good management who thinks about the good of minority shareholders and also company having negligible DEBTS...

A very good example of my article is the IPL matches... Have you ever noticed the spectators in the stadium..... when their team is winning and their favourite team players are hitting 6s and 4s.... there is excitement... happiness....joy...estacy type feeling.... and collectively the whole stadium is enjoying the thrilling moments.....so dopamine chemical is playing it's role and magnifying the estascy feeling of all the spectators in the stadium.... And the moment 3 to 4 thereafter falls in quick succession the whole stadium is silent..... estascy gives way to sadness....sorrow....now immediately the insula and amygdala gets activated and fear chemical are released.... whether my favourite team will recover and win from such a precarious situation....

And above all if you are betting same some few lakhs of rupees on your favourite team....How would you be feeling after falling of wickets of your favourite team in quick succession....

Please note the above article has no clinical support and is the combination of many articles i have read and from studies by PhD Doctors on the subject...and it is my personnel opinion and no way a recommendation to buy or sell...

JUNE 2018: Neurological Assessment of current correction

Yes....it just click my mind to write an article about these present on going correction on the neurological basis...Please note what am I going to write henceforth has no clinical support and it is just an assessment of what I have studied and  articles I read on the subject....

Jan 2018:

Wow....my Midcap and Smallcap portfolio is up by 25%...See I am very smart and I can make profit in market as and when I feel....I am feeling on top of the world...no one can defeat me....my stock calls are 100% correct....there is no chance that my decisions can go wrong about any stocks recommendations I give....and the story goes on....I am a super investor....I have conquered the stock market and now I know everything about stock market....lastly I want to start Giving Tips to everyone now....I know everything....

Yes your Neurons are firing intensely and limitless at these current situation....the euphoria you are experiencing is unmatchable by any other pleasures available in the world....Yes...you read it right...

I am talking about the feel good happy chemical dopamine....the chemical responsible for all the pleasure a human being and animals are experiencing....and these dopamine chemicals are so powerful and strong that excess requirements of these chemicals leads to addiction and eventually will lead to habits....Now you must be guessing what it has to do with Stock market and the euphoria Stage....Yes...confused....but one should never forget that we are made of biochemical cells.....and all the actions....thinking decision making is a result of chemical process going on in our brain....when we think or decide to do any action our brain ozz out chemicals and electrical current and we complete the task....
and move on to the other task and it goes on and on....second by second....
So once we start making money in trading and speculation....just before euphoric stage....we become happy and start believing in ourselves and we think we are smart....such type of feel good.... happy feeling we experience because we make continuous profit in trading and Speculation and so the nucleus accumbens starts to release dopamine chemicals.....and more profit means more dopamine feels good chemicals are released....now to make profit continuously it will develop in to Addiction and more and more you trade and speculate in stock market that hit of pleasure excitement what you get continuously develops in to Habit.... and so you trade and speculate more and more to get that shot of excitement....thrill....joy.... and so the Emotions are running very high and Trading and Speculation gives you immense pleasure which not even a short of cocaine or alcohol or cigarettes can give you....YES YOU have climb the mount Everest of Greed and Addiction....and within all these euphoria the stock market reaches the top and so now from here onwards there is only one way To go..... down.....Freefall......End of dreams to make it big in stock market....Lost the opportunity to sell when I had the chance....and we fall and enter.....

June 2018.....

Right now the Insula and Amygdala part of the human brain the Fear Brain.... of the market participants must be firing intensely...yes why not.... the midcap and Smallcap portfolios of retail investors have gone down by 25% to 35%....So today Even on hearing the name of Midcap and Smallcap i.e. in the present scenario the Amygdala will immediately become active and Neurotransmitters such as Glutamate...Cotisol...Adrenaline are released immediately and will make us to go into the freeze mode....that is the stage of taking no action and maintaining the status quo....or to take action like Fight or Flight...We are now scared and afraid and in fearful stage....and now we want to preserve our money by not investing in the stock market at least for some time... Yes am I right....or wrong....so on these part of the brain i will right the article when it has folded completely.....wait patiently and remind me from time to time if just in case I forget....Pharmaceutical Sector is in these fear stage and Insula and the Amygdala both are firing intensely and telling us to not invest in the sector and stay miles away from it....so once you experience full pain anguish fear and are afraid completely and fully and experience uncertainty and certain death by investing in pharmaceutical sector will the tide turn for good....and days will become bright from darkness and there will be sunshine all around and everywhere....and opportunities to make tons of money will appear.....

Conclusion:

Whenever there is euphoria.... collectively the nucleus accumbens  fires intensely which releases the feel good happy neurotransmitters such as Dopamine...Ephedrine... in all the market participants and the nuclues accumbens fire intensely and continously for weeks.... months....years together....And so a speculative bubble is created....
And same way in downtrend how the insula and amygdala gets collectively activated and fires continously telling us to avoaid possible danger and in stock market in the form of a LOSS and so we all together go in fear mode and missed the opportunity to buy stocks at dirt cheap valuation... Because the fear chemicals such as the Glutamate...Cortisol....Adrenaline are released continously in downtrend so our brain predicts there is danger and a possibility of a LOSS...and so we dont grab the opportunity to buy stcoks at discount and when MR MARKET is offering us Stocks at a 50% SALE value....


One who is winning is enjoying the rollercoaster ride Nuclues Accumbens.....like NBFC...even if valuation are high.....one who is losing is in constant fear...INSULA...Amygadala....Pharma....fear of investing even when valuation is low and favourable risk Reward ratio.....

JUNE2018: Market Cycles

The first thing is that markets move in cycles. The first cycle was high growth high quality. Now every bull market is the same, it starts with high growth, high quality then comes to high growth lower on quality and the third phase is just no growth no quality. We are now on the second stage of the cycle. So high growth and low quality will outperform everything else....

Yes.....in stock market there is nothing like sure thing....no one knows the bottom....but you have to be eventually ready for the worst case scenario....

Also does it make more sense to average at the life time bottom price or average at the life time Top price and meet with hugh losses....Suppose a good fundamental strong company after making a life time high price @1200/- is now available @450/-.... now suppose you buy@ 450....it goes down to say 200/-....and you purchase at 200/- also then your average comes to @325..... Then your future ROR on 325/- will be very good percentage wise in long term and if luck is in your favour then it can prove to be a multibagger investment..

JUNE 2018: Most important lesson in Investing and in Business

Today I was speaking with someone and told him if you want to make it big in stock market stay outside the periphery and patiently observe what is happening and what the market is doing....is the market giving you an opportunity to make money....or is the market going to take away your hard earned money.....
 The day you become a observer in stock market rather than a participant..... will be the day you will attain NIRVANA....in stock market....
 So don't become a participant....wait patiently.... become a observer..... and at the right moment STRIKE....
 Adapt stealth nature and character.....
 Always remember how animals Hunt their Prey....they will wait outside the periphery of the prey.... then they will observe the prey....they will wait patiently for the prey to come in their range of attack.... and once they come to them in their Range they Attack and Kill....so in stock market instead of you running after the market opportunities....wait patiently and let the market provide you will Golden opportunities....

The same goes for business also...let opportunities come to you rather then you running after the opportunities...and once life offers you the opportunities dont sit on it...run as much fast as you can to grab those business opportunities....but before that keep on working hard on the chosen path and be passionate about what you are doing and the drive to become successful...and wait patiently on that life path to throw you golden opportunities...

May 2018:...Monetary Policy: Repo and Reverse Repo Rate hiked @25bps points after 4 years....

Jun 06, 02:55 PM (IST)

  

Highlights from the policy outcome

Repo rate hiked by 25 bps to 6.25 percent

Reverse repo rate hiked by 25 bps to 6 percent 

The Monetary Policy Committee has maintained its neutral stance 

GDP forecast retained at 7.4% for FY19

April-September GDP growth projected at 7.5-7.6 percent 

October-March GDP growth projected at 7.3-7.4 percent

April-September CPI likely in 4.8-4.9% range including rent allowance impact       

October-March CPI likely around 4.7% including home rent allowance impact     

Jan 2018 correction...Writing on the Wall was visible but we all missed reading it....

Yes...we all missed the bus to sell in Jan 2018 when the euphoria was high...clear signals of market euphoria were easily visible when one of my friend who was investing in stocks previously would invest in only those stocks which only i suggested or recommended...and we were investing in only fundamental stocks with good and clear visibility...but these last few months i stopped giving him new ideas to invest because i did not like the way stock market was galloping ahead and the market had nothing to offer and also because i found there was greed everywhere...So from good strong fundamental companies he started investing in Penny stocks FOR trading purpose from November 2017 onwards so that he could make quick bucks...but finally the market got better off him...he invested in companies like... SUZLON .... ONMOBILE...MERCATOR...FOR TRADING PURPOSE but eventually in the last week of May 2018 after i spoke with him he sold all his penny stocks...yes all the above mentioned penny stocks he had to sell for a loss and they where down by almost 20% to 30% at least....So the writing on the wall was clearly visible and easily readable and specially for me it was clearly visible but even i missed the bus to some extent...also i did not expect the individual stocks to correct so much from there recent highs even though the froth was clearly visible... so now we all have no option but to wait patiently and see what the markets does next...also the FIIs were and are still selling continously from the last 6 months....but one good thing i have learned and observed is...a investor can understand the market very easily and the markets can prove to be beneficial to him only if he is MILES away from the noises created by the market....and especially from greed....so one has to always stay alert and have to be smart enough to recognize such situations and grab such Chances to make profit...
The current correction which started in Jan 2018 should last till August/September 2018 and thereafter resume its northwards trajectory.to new highs....is my prediction...

So happy investing for long term basis...and the structural bull market is still intact...the above article is my personal opinion only....and not a suggestion or a recommendation to anybody....

Contrarian investing in pharmaceutical sector....and Elliot wave....

Yes....last Thursday 18th may bought 100 shares of Dr Reddy Labs @1975.... for my first contrarian investing....from 2015 after making a lifetime high of @4386 today Dr reddy is fairly to little cheaply priced....but not very cheaply priced as per the Value of the stock..... but still it can go down by 20% to 30% from current price@1975.... but then it is like firing at a target in the dark....you are not sure the target will be hit.....so you are never ever sure when and what price the bottom will be formed....so it makes sense to average at the bottom...i.e. at the trough then average at the peak prices....So buying in STAGGERED MANNER is the most important thing to be kept in mind when buying in a downtrend bottom selling climax cycles...Never ever buy in lump sum quantity...always extend your purchasing period in a downtrend...Bottom should be placed in pharma sector by August September 2018...also the correction in pharma sector is so slow from 2015 and it is similar to boiling frog syndrome...

Pendulum (Greed and Fear): the pendulum of pharma sector is swinging towards the Fear Pessimism and despondency side..it is the stage where market participants have lost complete hope in the pharma sector recovery...but we still have not reached the Despondency selling climax cycle yet...so the bottom is not yet formed...

Psychology: in contrarian investing it makes 100% sense to let the stock prices to come to you rather then you running after the stock for purchasing.... generally the B grade investors I mean the Reflexive type investor's fall for these anamoly while the A grade  Reflective type investors wait patiently for the stocks to come to them.... I still feel one more downfall is left price wise in the pharmaceutical sector and then sideways correction for next 4 to 6 years at least....

Elliot Wave: it is clearly showing downtrend bear correction and we are presently in the 5th wave of correction....on long term basis theory....but still the capitulation process has not started and once the capitulation phase starts... thereafter it will be followed by the despondency phase which will put the final stamp that the bear phase cycle is about to get over....but the prices after going down from current levels and forming a new bottom pricewise.... thereafter the sector will be range bound for few more years before the time wise CorrEcTion gets over....

Waiting Game: so today one should play the game of delayed gratification and patience and buying when value emerges and therefore buying below intrinsic value.... when the world is pounding missiles on the sector continously with zero hopes of recovery and finally selling in disbelief.....that is the day you get Bargain....highly cheaply priced stocks..... below intrinsic value....by playing the waiting game and purchasing below fair /intrinsic value...the Risk Reward ratio is always favourable in favour of the buyer....maybe by August/September 2018 the bottom is in placed and a life time buying opportunity is created for long term investing...

Corollary the above article also applies to Sun Pharma.....Lupin.....

Caution: The above article is not a recommendation to buy or sell and are my personal opinions and views.....please consult your certified financial advisor when investing in any form of financial assests....do your own analysis and study.....also I am not a financial advisor....it is only my hobby....

G sec.....Crude..... interest rates of USA....

10 years G sec today @8% from the lows of @6:15%....
Crude @77 USD per barrel....
Interest Rates in USA for the first time is above@3%....after almost 9 years being nearly @0%.....

Present Correction in Pharma Sector.....Boiling Frog Syndrome

Yes....it is like boiling frog syndrome type correction...i mean the correction happening in the stocks are so small ans staggered form of price wise corrections and in prolonged time frame that it becomes very difficult for our brain to understand and accept the long term bear phase type correction happening in the pharma sector...we humans cannot understand small small changes happening in our environment and usually we ignored such type of small changes..our human brain does not have the capability and ability to read such small changes and is is because of the bias we have to adapt to all types of small changes which are happening continously around us in our environment...and because of the above bias we have we general ignore stock prices going down because of slow type correction happening and also prices going down very slowly that we hardly come to know that our stock is going downwards and in bear phase....

PHARMA SECTOR UNDERGOING BEAR PHASE AND MOVING TOWARDS UNDER OWNERSHIP...

yES iT IS hAPPENInG FINaLLY...pHARMa SEcTOR Is GETting drOWNED IN THE rIVER oF BEAR pHASE...tODAY PHArmA IS iN A sELLINg MoDE BECAUSE USA PRESIDENT tRUMP IS AFTER PHARMA COMPANIES AND CALLED THEM mEURDEReRS FOR cHARGING EXORBITANT PRICES FROM THE AMERICAN PEOPLE...sO FOR THAT REASon phARMA secTOR Is CORRECting..

SO THE FEAR IS ALL OUT IN THE STOCK MARKET AND PEOPLE ARE LEAVING NO OPPORTUNITY TO SELL THEIR POSITIONS IN PHARMA SECTOR...AND SO THE SECTOR IS MOVING TOWARDS UNDER OWNERSHIP...I MEAN NO ONE WANTS TO BE INVESTED IN THE PHARMA SECTOR AND WANTS TO JUST GET OUT OF THE STOCK MARKET...SO SOONER ONLY WE MIGHT SEE THE FRANTIC SELLING IN THE SECTOR AND NEW LIFETIME LOWS...

PRESENTLY IT LOOKS LIKE WE ARE MOVING FROM OVER OWNERSHIP IN 2015 WHEN PHARMA SECTOR WAS AT LIFE TIME PEAKS... TO UNDER OWNERSHIP WHICH MIGHT PLAY OUT BY 2018 OR 2019...OR WORSE COME TO WORSE BY 2020...BUT THE SECTOR WILL BE IN BEAR PHASE TILL 2024 ATLEAST AND WILL BE RELIANCE INDUSTRIES TYPE CORRECTION OF 9 YEARS IN A TRADING RANGE....

AS PER ELLIOT WAVE THEORY THE LAST LEG OF CAPITULATION... SELLING CLIMAX ...IE...THE 5TH WAVE LOOKS LIKE IN PROGRESS PRESNTLY AND THE CURRENT DOWNSIDE TREND WILL START MAKING LIFETIME LOWS MOST PROBABLY IN THE NEAR FUTURE TILL AUGUST 2018...BUT ALWAYS KEEP IN MIND THAT NO ONE IN THE WORLD HAS EVER BEEN ABLE TO PREDICT THE BOTTOM IN A BEAR PHASE...SO DO YOU STUDY THOROUGHLY AND THEREAFTER INVEST FOR LONG TERM...SIP MONTHLY IN PHARMA SECTOR CAN BE GOOD WAY TO INVEST FROM HERE ONWARDS FOR LONG TERM BASIS...IT IS BETTER TO AVERAGE AT THE BOTTOM OF A BEAR PHASE RATHER THAN AVERAGE AT THE PEAK OF THE CYCLE...

BUT THE CURRENT BEAR PHASE WILL SURELY GIVE A LIFE TIME OPPORTUNITY TO INVEST AT LOWER LEVELS WHERE THE RISK REWARD RATIO WILL BE FAVOURABLE TOWARDS THE REWARD SIDE FOR LONG TERM INVESTING ONLY...

NOTE: I AM NOT A CERTIFIED FINANCIAL ADVISOR AND ABOVE ARE MY PERSONNAL OPINIONS AND NO RECOMMENDATIONS TO BUY OR SELL....

Berkshire Hathway presently has Cash holding of 130 Billion USd

can you believe that today Warren Buffrt berkshire hathway has 130 billion usd in cash holdings...if he can wait out patiently in such euphoric bull market than we should learn from him is that today he does not find suitable business to own and so he is playing a waiting game...but we small investors do not in any angle display such discipline and keep on tradinging frquently because of the left out feeling that others are earning and i am left out...So play the game of delayed gratification and apply the discipline to play the game of patience and learn to invest for long term and create wealth for oneself and the family...So dont play the game of short term momentum and price based short term speculation but follow the principles of long term investing and value based investing...

Very tough correction happening...from Jan 2018 till April 2018

yes...it is becoming extremely difficult and tough day by day to guess when the ongoing correction will stop or is it over... after making a lifetime high of 11172 nifty corrected till 9950 and from the lows it is @10700 today... So leaving aside the difficult task of predicting whether the nifty correction is over for now i will look the bigger picture of the stock market...Yesterday i asked few of my brokers and the answer i got from them was that the market participants are in fear mode and afraid that the markets will still correct from here onwards...see i dont deny their anticipation but the bigger picture is that we are still in the bull market and it is intact because as long as there is fear... doubts ...uncertainty...boredom ...in the minds of the market participants it shows that the bull market is still fully intact...the day all the above emotions are taken over by overconfidence...greed ...thrill.... excitement...and when certainty will be the call of the day that will be the day one has to be cautious and fearful...so till that time actually comes enjoy the bull market till we enter the emotional phase of Euphoria...

Such Corrections are very difficult to understand...Read the Article Boiling Frog Syndrome and you will understand what i am trying to say...

The above are my personal views and opinion and i reserved my right to be proved wrong and the above article is not a recommendation to buy or sell...Also i am not a certified financial advisor...

Sun Pharma...Drreddy...Lupin entering the last phase of Bear Correction.....

Finally the external noise in the pharma sector is dying a slow death...Confused arent you...yes...what i mean is that the interest in the pharma sector is dying a slow death with Retail Investors...Speculative traders and especially with the business channels losing interest in the pharma sector...The hulla bulla of the outside world have vaporised and vanished for sure is my gut feeling but to note that we still might see the final fall...maybe a new lifetime low which might happen between August  and October 2018 ...but i am surely and definitely convinced that the correction is still not over...it can be priced wise or Time wise or Both....Assuming EPS of 22/ to 25/-- for the year 2021/22 and a PE of 15...the price works out to 330/- to 375...and also few bad quarters can see the price of Sun pharma going down to 260/-...but 260/- is the worst basis price and when the pharma sector going through its worst days ...months....years...We have already entered the 4th year of correction from life time high prices...and i feel that one more year of correction price wise is left just incase but Timewise correction might go on for next 2/3 years...in the time wise correction all the remaining left out participants like the value investor...patience investors...their back bone will be broken by holding the stock for years and the sun pharma...drreddy ...lupin stocks doing nothing and going no where price wise and these will be the last lot who will sell all their shares because BOREDOM will get the better of them...

Also when the attention of the Market participants is 100% totally diverted and concentrated towards other performing hot sectors and when the pharma sector is totally neglected it is also a good time to realise that the days of investing in the pharma sector are not far away...

YES once the boredom gets the better of the Patience Investor and so...Finally the days have arrived to increase your exposure in the Pharma sector and that opportunity will not arrive before the year 2021 to 2023....also by that time period the RISK/REWARD ratio will be 10/90 in favour of long term Investing

NOTE: The above article is my personnel opinion and not a recommendation to buy or sell...

Is the Bull Market Trend Over...

FAQ today by most of the market participant ...Is the Bull Market Over...

No not at all and I dont think so...infact because of the present circumstances and situation we are going through in regards to Geo political tension of USA firing 100 Missles on Syria and because of uncertainty and fear prevailing today in the stock markets around the world as per the reaction of market participants it shows that we are not even in the middle of the bull market journey...because today the market participants are showing no commitment at all and market participants wants to be away from the markets by the time all the air of doubts are clear...Psychologically the above reason plays an important role in the stock market...i mean if such a situation arises when we are at the top of the bull market and at the last phase of the bull market journey the market participants will ignore such news of missles fired by USA on Syria and ignore the news completely as if nothing has happened and will keep on actively trading in the stock market....I mean they will all say that the news are Discounted...and will show no signs of Fear Uncertainty and Doubts...So until they are fearing about the next Drop in the markets and show signs of Doubts and Uncertainties till that time it is assumed the stock market EUPHORIC TOP is not reached ....
Corrections will keep on happening at Intervals along the path of the current Bull Market Trend ...

The above article is not a recommendation or suggestion to buy or sell and are my personnel opinion only...

Long Term Investing Calculation....

The concept of focusing on the downside brings me to a tangential topic that I’d like to briefly talk about, and that is the allure of the “lottery ticket” investment. This is the type of investment that has long odds of paying off but could result in a huge payday if it works. For example, let’s say investment has a 40% chance of making 5 times your money, and a 60% chance of going to 0. In theory, this investment has a high expected value, and should be taken (if you could make this investment 10 times, 4 times out of 10 you’ll make 5 times your money, which far more than compensates for the 6 times your investment went to 0). In other words, if you bet $1 on a situation like this 10 times, you’d end up with $20 on a $10 total investment.

http://basehitinvesting.com/a-few-thoughts-on-reducing-unforced-errors/

Boiling Frog Syndrome and Stock Market Psychology..

 What is the Boiling Frog Syndrome....

Frogs are very similar to humans in the power of adjustment with the situation.

The Boiling Frog premise is that if a frog is put suddenly in to boiling water it will jump out. Secondly When you put a frog in a vessel of water and start heating the water. As the temperature of the water rises, the frog is able to adjust its body temperature accordingly. The frog keeps on adjusting with increase in temperature. Just when the water is about to reach boiling point, the frog is not able to adjust anymore. At that point the frog decides to jump out. The frog tries to jump but is unable to do so, because it lost all its strength in adjusting with the water temperature. Very soon the frog dies.

What killed the frog? Many of us would say the boiling water. But the truth is what killed the frog was its own inability to decide when it had to jump out.

We all need to adjust with people and situations, but we need to be sure when we need to adjust and when we need to face. The frog-in-boiling-water syndrome, can arise in other, more serious, situations throughout our lives where we willfully ignore an increasingly dangerous situation, telling ourselves that we’ll do something about it “soon”.

The main reason we get into these situations is “Denial”, we stubbornly choose to remain in the same situation and get stuck in deteriorating circumstances and do nothing about it till we find ourselves at a miserable dead end.

human beings like frogs do not understand the small changes happening around them and  adjust to the small changes happening without even recognizing whether the change is beneficial or harmful to their well being... the same co relatation of boiling frog syndrome can be seen and experienced in the stock market correction..
The present correction which we are going through...that is very slow correction from nifty 11170 to 9940 points was very slow and not even noticeable...i mean the slow correction was happening but we adjusted to the slow correction and today everybody will be feeling that they did not get a chance to sell around the nifty levels of 11100...

 i feel the pain is still left and the further corrections will also be very slow and the market will not give the poor greedy investor to sell and exit at higher levels..at every downside fall we the market participants get adjusted and the market keeps on making new lows and bottoms and because of these bias we are not been able to sell...Always remember the fall will never be in a straight line or in a linear manner..It will always be in zig zag manner to take advantage of our Psychology...
 Human Brain can immediately identify a steep downfall and goes on to recognize the danger of that sudden and steep fall in prices and the Investor becomes aware and cautious....But if the fall is very slow and takes a long time then the human brain will not identify the slow fall in prices and will keep on adjusting to the situation up to the point where it recognizes the price fall as dangerous....

today we are experiencing the same syndrome in the stock market correction which is slow time wise and moving in zig zag fashion price wise...