Strategic Equity Market A Very Deep And Most Successful...

RIGHT STRATEGY TO INVEST IN HIGHLY VOLATILE EQUITY MARKET When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever. - A very deep and insightful thought by the most successful investor of the 20th century. Anyone who would have invested in Hawkins Cooker in 2007, and followed the advice of warren buffet by staying long on 1000 shares would have earned nothing but 2 million rupees in 2014. However, it is despite of the fact that the whole world was fighting with slow growth, unemployment etc. So, can it be generalized that staying long always earns huge profits? The answer is – obviously not. As if we look at the story of Abban offshore, Kingfisher, Unitech, Jai Corp and†¦show more content†¦Global investors are regularly investing in Indian equity markets because of the business friendly approach of our Prime Minister Mr. Narendra Modi. Also global news like the policy changes, release of the various data in U.S. economy affects the Indian markets. To have a clearer idea, let us trace the some of the biggest rise and fall in Indian markets. In July 1990, Sensex touched the magical no. of 1000 for the first time in the wake of good monsoon and extraordinary industry pe rformance. Few years later in June 2005 it ended up at 7000 points, after the news of settlement between Ambani brothers which boosted the sentiments of investors and then the huge crash of markets happened in 2008 when it reached to the level of 8500 points from 21000 points. The point here is that instead of investing in the books of the company we invest on the basis of speculation. Not only our retail investors but also the big institutional investors are afraid of booking losses, they want to earn as much as they can and as early as possible- this is where the root cause of the problem lies. If an informed investor would have looked at the books of Kingfisher in 2005, he could have easily figured out that the company will not sustain for long – the huge debt burden and the inappropriate business model will definitely drown the company sooner or later. What is the right strategy? Of course there is no panacea for all the investment risks, and no exact formula for