HAS THE MARKET BOTTOMED OUT?
You`re going to think I`m crazy for writing this, but right now, there is less risk in stocks than at any time in our lives. Do not take my word just like that, take it from what the greatest investor in history, Warren Buffet, said only yesterday "It's time to BUY". Warren Buffet has not made such an enthusiastic statement in public in the last 34 years.
Stock markets are the best asset class to invest in but at the right time, right amount and right direction of the market. Investments in the markets are also a great learning experience which should always be taken in the right spirit.
When you understand the businesses you`re holding(the stocks you are holding), what they`re worth, and what kind of future they have, you can sleep soundly at night, no matter what the share prices do in the short term. Peter Lynch, the famous Fidelity fund manager, says the secret to getting rich in stocks is not getting scared out of them. The secret to not getting scared out of stocks is to do your homework and know what you`re holding.
Companies like Reliance and L&T are cash generating machines. They have great businesses. Hang on to these good businesses, they are worth far more than they are being traded these days. They are traded at ridiculous valuations.
Far from being scared, you should take this opportunity to Get yourself some Great Stocks which are available at dirt-cheap valuations.
Buy now, then sit back and enjoy your coffee, tea or whatever. Don`t look at the stocks for the next six months, whatever happens. This way your next Diwali is going to be fabulous, like you have never had earlier.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore
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