[greenoval]

Heres some reasonable arguments presented by an author who strongly feels that we are somewhere in the middle of a massive bull trap and that patience will be rewarded with one of the greatest buying opportunities of our lifetime -

https://www.tradersmagazine.com/depa...-trap-of-2020/

[adimicra]

Thanks for sharing.

As someone who is sitting with 16-17% loss in my portfolio, I am also wondering what should be the strategy. I have around 20% cash and rest all are in equity MFs and stocks. The mistake I did was I went over aggressive with equity and didn't stick to asset allocation thinking that retirement is 15+ years away. That's the biggest mistake anyone can do and I learnt it the hard way.

So, my advise is take a look at your investment and make sure you get the asset allocation right even if it means booking losses as it will give you peace of mind in the future. Secondly, if you have some spare cash, don't rush into the market as I feel we have still not formed the bottom and even if we have, there is almost zero chance of the market going up in a hurry. So, I would say something like - 30% equity, 30% cash (liquid funds), 40% debt might make sense with the goal of investing the 30% cash into equity (60:40 asset allocation between equity:debt) Let's say when the market falls 10%, deploy 10% cash and if it falls further 10% deploy another 10% cash and so on ...
This strategy requires much more active portfolio management. A slightly passive strategy could be to have a 6 month-1 year SIP to deploy the cash. Hope it helps.

[Sumeru97]

I have also been doing trades for quite some time, but never played a bear market, so thought it might be a good time to start building a decent long term stock portfolio.

Very recently invested a lump sum in an index fund and I always keep a significant portion in a couple of arbitrage funds and FDs.

My plan is to invest daily during these Covid times:

1. Invest about 20K every day till December 2020 in high quality stocks at the right price.
2. Keep my portfolio size less than 25, to better manage it.
3. Not put a stop loss on any stocks till the market stabilizes.
4. Do a reconciliation perhaps once a year to weed out the losers.
5. I have a bias towards Banks and NBFCs as I think I understand the industry better.

I started on April 13 2020, and here are my investments so far. I would be grateful for any advice regarding stock selection and strategy, from other long-term investors :

[adimicra]

Hey, looks like a good strategy though high on management.
But in principle, if someone has good amount of cash, the next 9-12 months is a good time to deploy the cash and sit patiently. I have a feeling that high quality private banks will give huge returns in the next 3-5 years. I am also planning to buy a life insurance stock as I feel the sector has huge potential and not much of a risk. Any preferences between SBI.HDFC and ICICI Pru and why? Another stock I am interested in is Titan.

[jetsetgo08]

Despite all the gloomy predictions, the stock market has gone bullish today.
I sort of feel I missed the bus as the sensex zoomed from 25k to 32k in a month's time and now is likely to settle at 32-35k for a long haul with not so significant return on investments till the pandemic ebbs.

[graaja]

Originally Posted by jetsetgo08

Despite all the gloomy predictions, the stock market has gone bullish today.
I sort of feel I missed the bus as the sensex zoomed from 25k to 32k in a month's time and now is likely to settle at 32-35k for a long haul with not so significant return on investments till the pandemic ebbs.

With the complete economy slowed down, I have a feeling this bull market is because of many people who don't want to miss the boat investing in (could be some other factors as well). The real situation will emerge as companies start announcing their earnings, and the real state of economy is revealed. So, you may still get that opportunity in the near future.

[karanraheja]

Originally Posted by Sumeru97

My plan is to invest daily during these Covid times:

1. Invest about 20K every day till December 2020 in high quality stocks at the right price.
2. Keep my portfolio size less than 25, to better manage it.
3. Not put a stop loss on any stocks till the market stabilizes.
4. Do a reconciliation perhaps once a year to weed out the losers.
5. I have a bias towards Banks and NBFCs as I think I understand the industry better.

I started on April 13 2020, and here are my investments so far. I would be grateful for any advice regarding stock selection and strategy, from other long-term investors :

Its good to see your strategy to invest on daily basis. IMHO i would suggest you to trim your portfolio size to max 15-20 stocks. Secondly dont have too much weightage on one sector. Try to invest 5 stocks each per sector so your risk is diversified. The sector you have invested mainly is yet to take a hammering so kindly wait and invest in financial sector.

Rather do SIP investments in FMCG , Pharma sectors in this market.

[alpha1]

Originally Posted by greenoval

Heres some reasonable arguments presented by an author who strongly feels that we are somewhere in the middle of a massive bull trap and that patience will be rewarded with one of the greatest buying opportunities of our lifetime -

https://www.tradersmagazine.com/depa...-trap-of-2020/

I don't want to agree with it, but it has all the makings of coming out to be true. I am just awaiting (not with eagerness) mass-layoff induced economic carnage, that may take a decade to recover.

People need to understand that demand is created by the need of consumption by the public (mostly who work for someone else for wages). Supply side is secondary in an economy, which I feel most people would've understood by now.

Originally Posted by graaja

With the complete economy slowed down, I have a feeling this bull market is because of many people who don't want to miss the boat investing in (could be some other factors as well). The real situation will emerge as companies start announcing their earnings, and the real state of economy is revealed. So, you may still get that opportunity in the near future.

Oh yeah, the first trigger will be the bad news about the losses (when is the quarter results announced in stock market?), and the nail in coffin will be the surge in unemployment leading to semi-permanent loss of demand.

[adimicra]

Originally Posted by graaja

With the complete economy slowed down, I have a feeling this bull market is because of many people who don't want to miss the boat investing in (could be some other factors as well). The real situation will emerge as companies start announcing their earnings, and the real state of economy is revealed. So, you may still get that opportunity in the near future.

+1.
Timing the markets is almost impossible and people have spent their entire lives in trying to do so but in vain. As I said, the markets are not going up in a hurry, I don't see Nifty crossing 10K but there is a high possibility of Nifty touching 8K or even lower. So, there will be opportunities to invest at lower values in the future. Keep some liquid cash and invest for every significant drop in the markets over the next 6-12 months (or do a SIP top-up for the next 1 year)

[Ananthang]

Ruchi Soya

Any specific reason why this stock is sky-rocketing from Feb 2020. Net profit changed from 80 Crores to 7500 Crores in 1 Quarter. Moneycontrol says Week financials and there are some Regulatory investigations, but people keep hoarding this stock.

[Pancham]

Can anyone help me understand the brokerage system of Kotak securities (or any other broker for that matter). I was charged 2.5% brokerage for a nomral stock sale trade yesterday. Not sure why.

I am relatively new in the market.

[Pancham]

Originally Posted by Pancham

Can anyone help me understand the brokerage system of Kotak securities (or any other broker for that matter). I was charged 2.5% brokerage for a nomral stock sale trade yesterday. Not sure why.

I am relatively new in the market.

Alright. Found this out.

So the brokerage is 0.29% or INR 21 whichever is higher; however, in case your brokerage is INR 21, it cannot be more than 2.5% of your total transaction value. So, it will be INR 21 or 2.5% whichever is lower.

[Sumeru97]

Originally Posted by karanraheja

Its good to see your strategy to invest on daily basis. IMHO i would suggest you to trim your portfolio size to max 15-20 stocks. Secondly dont have too much weightage on one sector. Try to invest 5 stocks each per sector so your risk is diversified. The sector you have invested mainly is yet to take a hammering so kindly wait and invest in financial sector.

Rather do SIP investments in FMCG , Pharma sectors in this market.

Thanks for your feedback, I will certainly consider regarding portfolio size and diversification.

For FMCG, I am waiting for the correct valuations to enter. I don't know much about pharma which is why I did not consider this sector.

My current focus has been to try and invest in companies which are rightly priced and could outperform in a post-covid world. However I will try to limit my exposure to NBFCs and banks as you suggested.

[PGA]

Does anyone feels the same way the way I feel about the stock markets. I have had it lingering for a few years, looks like its been confirmed now.

I think stock markets have decoupled themselves from the world around them. They do not seem to be underpinned with the financial performance of the economies or the organisations.

They have become creatures of their own. The only motive is making money and more money and more speculations. Even when the bubble is pricked it repairs its quickly unmindful and unlearnt from the happenings around it and goes about creating another bubble.

One plausible reason is the economic policies of the Govts, majority of times the plans to overcome the economic mess created by these bubbles, are creating even greater inequalities in the populace. Earnings of the few increase in much greater proportion as compared to the masses for whom these policies are expected to benefit. Thus creating unbalanced and skewed growth of economy with few sectors booming and broader economy struck in a quagmire. This limits the investment avenues and cycles. The spare cash in the hands of few which include financial institutions of all kinds is landing up in the stock market.

Does it imply that we no longer need to stick to the principles of value investing, momentum and technicals will do.

[SmartCat]

Originally Posted by PGA

I think stock markets have decoupled themselves from the world around them. They do not seem to be underpinned with the financial performance of the economies or the organisations.

The upmove from 7500 to 9500 is a "normal" bear market move, in my opinion. As of now, it does not look like we are heading back to all time highs. That is, just because we are at 9500 now, it does not mean we won't slide back down a few months down the line.

One plausible reason is the economic policies of the Govts, majority of times the plans to overcome the economic mess created by these bubbles, are creating even greater inequalities in the populace.

Policy interventions by central banks and Govt is right thing to do though. If you let companies collapse during an economic crisis, recovery will take atleast decade - and eventually it is the people who will suffer the most. Saving companies does not only help the rich - it eventually helps the poor and the working-class too over a period of time. Thanks to the intervention, unemployment will reduce from 25% to 5% in a couple of years.

Side effect: gap between rich and poor will widen.

Solution for that is MORE stringent regulations. For eg: companies should NOT be allowed to do buybacks (like they did in the USA last year) and clean out the company's reserves.

Does it imply that we no longer need to stick to the principles of value investing, momentum and technicals will do.

In US, 40 or 50 years ago, fixed deposits used to yield 8 to 10% pa. Now they yield 1%. Money has nowhere else to go, but stocks. Because stocks pay a dividend of atleast 1 to 3% pa. As long as interest rates are kept close to zero, the old principles of "value investing" do not apply.

But that does not mean you (as an investor) should chase expensive stocks despite not being comfortable with valuation. There will always be stocks that are ignored by the markets. Buy those instead. Analogy: Let's assume that everybody on a highway is driving at 130 to 140 kmph. That does not mean you need to do it too. You stick to the speeds you are comfortable with.