IPO Grey Market Premium (December, 2008 Messages)

In my view lot of patience of small investors is going to be tested in coming days. Markets have given the impression that they have seen the worst and now stabilized, therefore there is a reason to buy, but I would suggest small investors to stay out.
In my view (and let me reiterate, I am not "Expert")things are definitely showing as if things are improved, mainly because all the governments have either implemented fiscal stimulus packages or have announced more packages to be implemented. USA has already put in 7 trillion dollars, EU, UK, China and Japan have already announced stimulus package. Even Latin America, Middle East and other South Asian countries have announced fiscal stimulus. So the question is then why are there concerns? Issue is that investors world wide are scared and this means economy has started to de-leverage rather violently, which means capital is scarce and nobody trust each other. Therefore governments/central banks are directly intervening in the markets. But there has been a lot of talk in economic blogs that these measures may fail and western world may enter into a deep and protracted recession, may be which lasts 10 years. People who are optimists are predicting a fall in major world indices to near 20%, pessimists predict fall of 50% from these levels.

Give these scenarios and chaos happening world wide, don't assume that Indian growth story will be the same as Investors were made to believe. Already government has provided a liquidity of 1.5 lac crores and to some extent it has eased pain. But the real test will be faced in coming days when lot of foreign currency debt matures. So if International markets don't stabilize we will see Government (Central and State government has very high fiscal deficit) and private companies fighting for scarce capital. Having said that there have been people predicting up move in markets. Frankly nobody has a clue, Elliott Wave chartists have said that we are in Wave 4, which can take us up. But once this recovery wave completes International economists are predicting sever falls if not disaster, that is when we enter in Wave 5. This will be the time when you will start hearing that evrything is OK and crises is a thing of past. Given the crises we all are in, I am also of the view that as Investors we should try and protect our capital. This is surely a deflation era where you can expect asset prices to fall. Dont be bullish when inflation rate falls and government cuts interest rates, this time things are different, sit out and enjoy with your kids. Please don't let your patience to be tested, In my view you will get chance to enter better than these levels, but for time being my advice is to sit out.

Hi friends, I am back to post good news and tips over here.Please, Please dont be so bearish, the market is going to do well in coming months. resistances are 10650, 11200 11800 and 12500. In downturn market will not breake 8200. So within a range keep buying largecaps like NTPC, SBI, ONGC, Reliance, RPL. Because these companies are not going to shutdown or cut production in coming years.Always remenber when all are saying to sell keep buying. Believe on Indian Economy and see the other economies. At 21000 all were busy in buying and nobody was talking about selling.

Hello Friends Wellcomes Once Again
Market Are Now Going Upword Direction So Please Keep Petation
Because In Last Market Are Down With Range Niffty 2500-2800.
Sensex Is 7000-9500

Thanks

hi mso,
thanks for your valueable information, it has been really long that any one wanted to share there views on this site.

There has been an uncanny silence all around as nobody wants to post any entry here. Unlike good old days when one could check numerous posts (rather absurd posts)on an hourly basis. No posts, is a sure sign of pessimism and indication of Bear markets firmly in place. Let me put my neck out and say again that please don't enter markets, though there are people saying that there may be a bounce back for short-term, to certain extent this is justified as market has gone really short. But this may will be a Dead cat bounce and you will see a fall which will be unprecedented, this is seconded by few people who predicted this crises almost 2 year back. Most notable being Nouriel Roubini, Mike Shedlock and Krugman. Already people in US are predicting US DOW to fall to 5000 level (Some are predicting even below this level). China which was earlier thought to be a power house has seen its energy being sapped, there is already news of Unrest in their economy. Coupled with Japan and Europe in recession these are scary times. Middle east Sheikhs who were sitting comfortable till Oil was above $100 see their asses on fire. Oil at $50 doesnot give a comfort, as almost all countries lose money (Except Kuwait). All in all bad times. Therefore I think we should stay out.
To end, my heart goes out to the Brave soldiers, people and fireman who fought so valiantly in during the crisis. Lets not forget there contribution in most grueling circumstances.