" Be fearful when others are greedy and Be greedy when others are fearful "
But Mr.Buffett never told us how to identify the concensus greed or concensus fear !
Still, it is most common-sensical and effective maxim of investing. Something similar is happening in the current markets. Liquidity is drying fast. People are sharing a consensus view that markets are going to fall from this level like they fell in 2008. Most brokers feel that markets will come down to 17,000 index level. And inflation + FII exits are playing on most of their minds.
Most FIIs and MFs have already sold off major chunk of their portfolios. On the other end, the regular buyers - Insurance seem to be slow in buying due to the lower business they have garnered this year. But they dont have any option. Whatever incremental money they receive, they have to put a significant portion of that in Equities. So, Feb & March should be good months which can show us higher equity levels.
If you look at a very short term, a much awaited short covering rally is in making now. This would be fierce, aggressive and forceful. We have seen a capitulation levels on Friday (28th January) where even the strongest of the minds have given up on the markets and would have booked losses. Entire set up is such where now there are more and more people willing to sell at whichever levels markets could rise.
That means, the bargain buys are available to those who have cash on their books.
I anticipate that the current capitulation levels have created the foundation for a quick 7-8% rally in the market. From the November top of 6338, the markets are down by 13% and 13 weeks got over. Mostly the near term bottom has been made. Even if the bottom of 5459 gets violated during next week, it will only be the opportunity to buy rather than sell, because the bottom will be followed with a strong pull back up.
I remain bullish for next 3-5 weeks and expect that we make a gain of around 7-8%, before starting a new lag of fall.
So yes, it is time to be greedy. But the greed should be well managed as, the current levels are not anywhere closer to bear market. Current market is such that it will give a short term opportunity on long side and long term opportunity on short side!
But Mr.Buffett never told us how to identify the concensus greed or concensus fear !
Still, it is most common-sensical and effective maxim of investing. Something similar is happening in the current markets. Liquidity is drying fast. People are sharing a consensus view that markets are going to fall from this level like they fell in 2008. Most brokers feel that markets will come down to 17,000 index level. And inflation + FII exits are playing on most of their minds.
Most FIIs and MFs have already sold off major chunk of their portfolios. On the other end, the regular buyers - Insurance seem to be slow in buying due to the lower business they have garnered this year. But they dont have any option. Whatever incremental money they receive, they have to put a significant portion of that in Equities. So, Feb & March should be good months which can show us higher equity levels.
If you look at a very short term, a much awaited short covering rally is in making now. This would be fierce, aggressive and forceful. We have seen a capitulation levels on Friday (28th January) where even the strongest of the minds have given up on the markets and would have booked losses. Entire set up is such where now there are more and more people willing to sell at whichever levels markets could rise.
That means, the bargain buys are available to those who have cash on their books.
I anticipate that the current capitulation levels have created the foundation for a quick 7-8% rally in the market. From the November top of 6338, the markets are down by 13% and 13 weeks got over. Mostly the near term bottom has been made. Even if the bottom of 5459 gets violated during next week, it will only be the opportunity to buy rather than sell, because the bottom will be followed with a strong pull back up.
I remain bullish for next 3-5 weeks and expect that we make a gain of around 7-8%, before starting a new lag of fall.
So yes, it is time to be greedy. But the greed should be well managed as, the current levels are not anywhere closer to bear market. Current market is such that it will give a short term opportunity on long side and long term opportunity on short side!
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