The Light at the End of the Tunnel - II - Sainik

More thoughts on the foreseeable future:

Market Psychology: Today everyone is convinced that we have only headwinds for our economy and thus would be cautious in investing. However, the market seems to be having it own mind. It’s simply because the strong hands are accumulating. Not for a moment one should confuse strong hands as FIIs; the FIIs are not always the strong hands. My research over the years has conclusively proven that FIIs increase their selling pressure when the market is bottoming out and vice versa. The invisible strong hands are the “operators”, LIC/GIC/UTI etc., or even corporate treasuries. Hence, while you will see the screeching increase on CNBC for the bearish case, the mats are likely to be on their bullish paths.

Fundamentals: While there are many external and internal threats to our economy all of these are already well known. Good corporations would plan accordingly for these threats. I have seen in the past that the strong become stronger during such times and the weak fall by the wayside. This time too, this is likely to happen. Watch companies like Hindustan Unilever, which continues to show good results in such an environment or for that matter Infosys.

This Claimer: As usual, I advise people NOT to follow my advice blindly. My risk-taking capabilities are far higher than many traders’. Further, not understanding my strategy in its entirety and trying to implement it could put your capital at unknown risk.

Also read: Light at the End of the Tunnel - I