Feb 16, 2012, 11.18 PM | Source: Moneycontrol.com

Buy or Sell? Experts discuss investors' next market move

There are two rules of investing: The first rule is donít lose. The second rule is donít forget rule number one

Buy or Sell? Experts discuss investors next market move

There are two rules of investing: The first rule is donít lose. The second rule is donít forget rule number one.
~Benjamin Graham

Investors who took the bait and swam in the deep waters of the market, must be ecstatic that their investments are paying off. But traders and investors, thrilled with the Niftyís performance of the last few weeks, may have been slightly sensitive to todayís trend which was a bit of a bumpy ride.

The Nifty took a breather today, that pushed the benchmark Index to a six-month high of 5,540. The Sensex was down 48.42 points or 0.27% at 18,153.99 while the Nifty was down 10 points at 5,521.95.

Markets world over continue to cringe over two big concerns Ė Greece and the crude oil situation. Domestically, the benchmark Index is at overbought levels and it showed clearly during todayís trading session. But the one niggling worry on the street is who or what is backing this rally? Certainly not fundamentals.

But Nirmal Jain, chairman of IIFL defends the rally saying the market always runs on anticipation. He says, ďMany times people look at liquidity vis-a-vis fundamentals but if liquidity improves fundamentals can improve because most of the companies can raise equity, reduce debt, recast the balance sheet and if the money market condition becomes easier then money can be raised from overseas or money can be raised locally at lower cost and that also improves fundamentals.Ē

Earlier in the day, Sudarshan Sukhani of s2analytics.com had said that today would be a slow day and traders would be sensible to stay away from any trade. He is unsure whether todayís market play is a one-day consolidation or if it could increase to a number of days. ďIf the Nifty starts moving up - that will be a sign that okay, it was a very brief pause. But until then, it is wise to stay on the side,Ē says Sukhani.

For Portfolio Manager PN Vijay, the bull run is still going strong belying the cautious or the pessimists who were expecting eminent correction. Whatever correction is there seems to be very sideways and people are rotating stocks. ďGoing forward, as the risk appetite of investorsí increases, the perception is we are probably moving to a more relaxed credit environment where people would start pecking away at stocks like real estate for example,Ē he adds.

At the same time, market watchers know that the indices have run up a lot with many looking for bottom up opportunities which may see some consolidation. However, well performing stocks with good fundamental stories will always have buyers and investors. Whether you want to book profit or not depends on your portfolio.

Says Jain, ďIf you are holding good long-term stock, even if they correct by few percentage points, in a market like this when momentum is behind you, it is better to hold on rather than book profit in a hurry unless you arenít very sure about the fundamentals of the company and are looking at exit opportunities.Ē

The signals that Jain is picking up at the IIFL Investor Conference where he is interacting with over 400 global investors and more than 90 companies is that the worst appears to be behind us with investors optimistic about the future.

So, agreed, all good things have to come to an end sometime. But before they end, consider reaping maximum benefits of this up move.

Chelsea Saldanha


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