I see no one talking about this so leaving it here
Also note that Q4 earnings were ahead of analyst estimates for the 3rd quarter running and that Nifty 50 companies have reported double-digit earnings growth for FY21,while the GDP de-grew 7%.
6 Likes
From what I understand the consensus here is that the market is probably not overvalued, and has a minimal probability of correcting or crashing in the near future.
Under such circumstances what should a person who is sitting on a pile of cash (and feels like an idiot 
) do right now? Deploy the cash in staggered amounts at every minor correction, or prefer some other safer/less volatile investment?
I think the best one can do right now is buying far otm long term options on both call and put side as the vix is ultra low. The premiums are very cheap and can provide leverage if market moves violently on either upside or downside
4 Likes
At any given point of time you may find many opportunities independent of market levels. There are many firms still near March 2020 lows or slightly higher…and decent firms…they are down for a reason and provide opportunities to those who understands them…
Also, those who still hold their position today is as good as buying at today’s price…so once you enter market by buying today or over next few months…all will be in same boat…it’s just that on a 40% correction they would lose the part of capital they call profits and you would lose the part called capital…but after all it’s just money with different names!!
6 Likes
If experience holds any value to someone then act according to your investing style, risk profile, financial goals and asset allocation. In case someone is value investor than he has to hunt for bargains whereas growth oriented has to look for reasonable valuations and not egregious valuations.
It also indicates the maturity and experience of person in the market. In bear phase we must have cash and in bull market we must have favorable stocks in pf. Adjust the course of journey accordingly. Patience and Focus is the key in investing but not FOMO.
4 Likes
Can you elaborate on this part:
“those who still hold their position today is as good as buying at today’s price…so once you enter market by buying today or over next few months…all will be in same boat…it’s just that on a 40% correction they would lose the part of capital they call profits and you would lose the part called capital…but after all it’s just money with different names”
Isnt the prevention of capital loss the primary purpose of an investment?
Indeed, prevention of permanent loss of capital is primary purpose. Temporary losses is not in anyone’s control though…also we do not know when correction would come and that temporary loss will hit our eventual profits or our capital, we do not know…but yes if we panic & sell or do kneejerk unplanned reactions - it will turn into permanent loss of capital - which is something we need to avoid and hence understand ourselves first before we proceed to either buy afresh or even hold…
3 Likes