Before Friday, all the analysts were extremely bearish and all of them were talking about levels of 5000 and 4800 and some even 4400. Is it true that analysts get carried away too much when market breaks a support level on the downside? What they don’t realise is with their extremely negative views they’re scaring the retail investors from investing into the market. Our markets have given the opportunity to invest at low levels of 5200 several times by now but so many people out there keep missing it because some or the other analysts are bearish on the market and try to give a picture of 4800 and 4400 and people get scared.

I remember a few silly predictions by so called analysts and experts. One of them was if in June, our markets dip below 5350 then we’ll see the markets around 4800 and even 4500 in the long run. The funny thing is in May we did give a closing below 5350 and the next day we bounced back. So the same thing applies to June but not May? Im not able to understand this logic. Anyway in June we did see a fall below 5350 levels and in a much larger volume than anyone would have had expected but we went no where below 5200. Now Im hearing some analysts predicting a fall in nifty to 4700 in July series. So is it that if the June hopes did not work, shift it to July and if the July doesnt work we can expect the same thing for August? Another analyst was giving a sell call for Yes Bank with a target of 240 when I was buying it around 282 levels. I mean, whats the point of making a vague call like this and get proved wrong just the next day? There has to be a logic behind a call right? The stock fell 8 rupees on one day means the stock will fall 15-20% further?

Actually, most of them have no clue as to where the markets or individual stocks are going and each one of them is just speculating around their own ideas. They should just be truthful and say that they really have no idea but this/that is what they are guessing. They come straight on the TV and speak boldly as if they’re so convinced about their calls only to get proven wrong the other day. There are only a couple of analysts out there who give reasonable calls and present their ideas as their own. They do not try to put it as a 100% sure shot convincing call and scare the investors.

I would ask all retail investors who actually consider themselves as long term serious investors to stop trying to time the markets. If markets dip to 5350 or 5200, they should look at good individual stocks and if they are bottomed out, they need to start entering them. Markets may or may not fall below 5150 – 5200, nobody really knows. It is a speculation on either side and wherever market goes, there’ll be people telling you, “See Im right”. My only question is if there is a long term view on this and the stock looks bottomed out and posts an interesting upside, why not enter it? Markets have bounced back several times from 5200, so one can consider buying stocks around those levels. If you hope for further down fall then even if markets dip further, you’d just keep waiting for more downside and will miss the rally. If at all one is worried too much, they can consider going partial investment at all kinds of levels. Invest half what you wish to do around 5200 and then wait for a couple of weeks, then see where markets are and put some more money etc. If you try to time the markets, you’ll end up in making mistakes because really nobody can time the markets.

I can assure you that 5200 is not a bad level to enter the markets at all because just 6 months later when FY13 estimates come in, we would look cheap. Stop worrying about 4700 or 4400 levels and enter on dips and go long on the stocks. Let the markets dip, buy more if you can and again the same idea, go long. Buy stocks in a crash and sell it in a bull run and maximise the gains.

Related posts:

1. Adopt Wait and Watch Approach Now
2. My Views On The Market