Posted by: sanjayshetty | June 21, 2005

Crossing 7000 BSE Sensex

I’ve been ignoring my blog for quite some time. Thought I’d get back into it.

The BSE Sensex is at 7000, most of the media seem to be euphoric about this fact.
I wonder why? Is corporate India doing so well? I have my doubts. But forget me.
One would think with the stock market being at it’s all time high, most mutual funds should be doing good. However that is not the case, they seem to be doing badly.

Another interesting phenomena is, it seems to be the first time that the sensex is at an all time high and at the same time property is at an all time high. The mill land sale in Mumbai at an all time high price( The sale of National Textile Corporation’s (NTC) sprawling 17-acre Mumbai Textile Mills at Lower Parel at Rs 700 Crore+ )is shocking indeed.

Normally when the stock market is up, the property market heads the other way and vice versa. However this time around it’s up as well. Strangely even gold seems to be at an incredible high.

So in short all the different kinds of markets seem to be at their all time highs.
Is this a time to rejoice or to worry? Well if corporate India were doing great I would assume the stock market to be high. But is that the case? I’m really not sure.

I feel one thing is certain we’re in for a big time fall. Why am I so certain. Simple Newton’s law. For every action there is an equal and opposite reaction. But should one be worried about a fall? It’s natural right? there are up’s and downs. Well that’s true, however with everything being up the fall is going to be greater is what I feel.

If that happens, it certainly is a time for rejoicement. I’ve been having a really hard time trying to search for any good investment, especially in the real estate market. Nada, zilch, nothing is what my search has come up with.

Hence I feel this is the time to book your profits in all sectors and keep the cash aside for the upcoming bust.

There could be two scenarios. The above statement could turn out to be true or false.

Lets take both scenarios.

Scenario 1 “False”: Well if what I conculded is false then, one might loose out on a great upward movement. But I’m sure if one has invested early in these markets one can surely enjoy handsome rewards. That is the only reason to get out currently when everything is so high, else might make sense to wait, depending on your individula situation. In addition lets not forget words of wisdom “Don’t count your money while you’re still on the table”. So lets not think oh we’re doing great now, remember if the cash isn’t in our pockets it’s still on the table and is definitely not ours 🙂
Bottomline if we got out at the stage where one is making reasonable profits, one might miss out on the great profit opportunity. A mirage sold to every amateur.

Scenario 2 “True”: Well if what I said is true. Then the upcoming bust is a great time to rejoice and find real great deals at really low prices in all the markets.


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