Patience…

“Once we act, we forfeit the option of waiting until new information comes along. As a result, not acting has value. The more uncertain the outcome, the greater may be the value of procrastination.” – Peter Bernstein

Patience is a key element of success. – Bill gates

The outcome we are waiting for: The Markets to Tank (Correct or Consolidate are mere euphemisms)

Till when one we should wait: Well before the markets open opportunities of investing in stocks you like as low as 0.5-0.75x.

The higher the markets go from these levels (13,600) – the greater will be the fall, the greater the value of procrastination. And yes while you might be saying that there is no bad news around , why should the markets tank.- the fact is it is somebody who has to one day say that the KING is NUDE, and it could be a kid.

So collect all your cash, so that when others are panicking you are gathering your favorite picks.

And Yes WAIT!!! WAIT!!!! WAIT!!! WAIT!!!

Markets- Dizzying Heights

People like crowds. The bigger the crowd, the more people show up. Small crowd, hardly anybody shows up. -Gallagher

The same is so true for the stock markets….when they are going up and everybody wants to play the game. Many of them are their just because everybody else is their…because being invested in the markets is the in thing. When everybody is buying multi-baggers, why should one stay away and all concepts of risk are thrown out in the dustbin.

The way to make good money in a Bull market-

“Avoid making bad investments – dump 90% of the stock ideas in the bin without even reading them.  
The current state of the Equity markets can be summarized by:
There are moments when everything goes well; don’t be frightened, it won’t last. -Jules Renard

Trading at 20 times trailing earnings – the markets scare me but I have not been here long enough to know a lot about it but I know one thing better be scared than lose. They are good ideas still…but I know they will be better ideas once there is  no crowd.

The Ben Bernake Dillemma

“most economists use statistics like drunks use lampposts: for support more than for light”
-Churchill

The challenge before Bernake is to make a decision to pause/stop the fed rate hike this FOMC meeting or not. While, in the last meeting the central banker suggested that forward is likely to be a slave of data (statistics). The rising inflation (11 year high) reported substantiates a rate hike. However, the growing unemployment (bad data) and slump in Housing shows that another rate hike can push to recession as equity markets are jittery coupled with geopolitical uncertainty and rising energy prices.

Come what may it is going to be trouble some for the America’s.

What needs to be watched is that whether Bernake uses the statistics as a lamp post for support or light.  While in the past we saw all assets price increasing commodities, real estate and equity – a further rise in Fed rate will shake the equity markets and the real estate. I therefore, do not see a rate hike but the inflation data going forward is going to be worrisome. Get ready for some challenging times ahead……

Real estate – Southwards?

Its always a treat to read Deepak Parekh’s review of housing scenario.

A very well written Chairman’s statement from the HDFC’s annual report.

Excerpts:
The siren of caution in the real estate market is now ringing loud and clear.Tom Barrack, arguably the world’s greatest real estate investor, likens the current real estate market to a game of polo. “I feel totally safe playing Polo on a field full of pros, but when amateurs are all over the field, someone can get killed.
They have more guts than brains and charge after every ball and don’t know when to hold back.” It is the same with the current Indian real estate market, even in India we need to licence projects and rate developers. If there is no clearing  off the turf, the amateurs are going to get trampled, taking seasoned horsemen down with  them.
Should the housing market in Mumbai look like a classic case of  `irrational exuberance’, how then does one explain the same in Delhi, Bangalore, Pune and many more such cities? Home prices have spiralled in the last fifteen  months. House price vertigo is more than a local or national condition – it is  a worldwide phenomenon. Southwards is where prices must go.