This has to be said. Indian retail investors over last
many years has been at the receiving end of many jokes. Always buying at the top, selling
at bottom, “Dumb money” and what not. But the last 6 months have been
remarkably different. It’s time the domestic equity investors put their head
high and say “We are the smart money”
Picture this, FIIs sold stocks worth over Rs 40,000 cr
post demonetization and when during the initial part of this process the Nifty
fell from 8500 to 7900, a bear market loomed large. However, the domestic
investors said nothing doing and they started to buy. Dollar to dollar FII
selling was matched by DII buying and I am not even counting the direct retail
buying.
And now, yesterday FIIs bought 4,000 crores at the
highest level of Indian markets. Now this is not to say, FIIs have been
foolish. They have a choice of investing in various markets and there are many
markets which far outpaced Indian markets so they focused their energy
elsewhere. But while in the past, retail would throw in the towel at huge FII
selling, this time they kept buying treating this as a flash discount sale and
boy are they reaping rewards now?
Make no mistake, market is set to go through a frenzy now
but this is the time to sit back and enjoy while FIIs scramble to buy at
all-time highs. At some point, this market will become euphoric and fall under
its own weight but trust me that time is long long way off right now.
Picture this, over last 2 years when the Nifty has made a
move from 9100 to 7000 and back to 9100, the midcap index has surged 24%. So
retail has made huge money in individual midcaps. And a rising tide will lift
all boats, so the portfolios are set to surge higher even from here.
What if you missed this rally? No problem – wait for dips
and consolidations, they will inevitably come but when they do, have to
participate. There is no fun in watching someone else make all the money.
Disclaimer:
The author of this article does not invest/trade in stock markets including
derivatives. His only exposure to stock markets is via the stock options given
to him by his employers as part of his compensation
Grt... Indian equity market's dynamics have completely changed
ReplyDeleteSalute to you anuj sir
ReplyDeleteSir,
ReplyDeleteYour analysis is as good as it can get.I am a big fan of your views on markets.Thanks for always sharing your views candidly with the audience.
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ReplyDeleteBut shouldn't buy completely as correction is due. No one knows when it will come and at that time rather than force selling, should have cash to buy. Already midcaps have run ahead of valuation. Agree that it may run up even more, possible but gaining less is better than loosing more
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