Friday, January 12, 2007

Satish is out of the markets :-)

My good friend Satish has just posted (linked above) about how he has sold all stocks and gotten out of the markets. I told him how he seems to share timing with Dr. Marc Faber who also seems to have sold all equities.

Marc Faber's portfolio - Cash, Farmland , Precious metals.

Now my take on the entire situation:-
1. Every sell-buy decision has to be taken on its own merit.
2. I am not a trader who buys and sells. I am a buy and hold person.
3. I buy value and value in absolute terms. I've trained myself to remain unaffected by ups and downs in the market.
4. I have realised Marc's perspective - (300mn+ under management, big cap index stocks) , Satish's perspective (??? under management) and my own are totally different in the indian context. If I was in Marc's shoes - I would only do private equity as of today. But then again, he's an investor. I am a buy and holder.;-)

What do I feel presently?
I don't think small and midcaps have participated in the rally upwards so I would be surprised if they saw significant downside.
I have bought value. I'm comfortable buying more if the opportunity presents itself.
Some companies I've bought have not yet proved my investment thesis though my returns have come in. I would rather wait till my investment thesis plays out. I guess the broader market will be willing to overpay for a story that has played out as opposed to myself who is willing to buy cheap and see potential. I guess a story of people with different expectations from their capital!!

Small aside:- On comparing Marc's portfolio to my own- I seem to be invested in companies with heavy cash and farm land on their balance sheets. In some cases, the market cap is below the combined value of these two put together. Cheers :-)

Net Net. I am staying invested.

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