Tuesday, December 9, 2008

After all, a bargain isn’t a bargain unless you have money to take advantage of it.


Global equity markets are down 40-60%, stocks are down 70-90%, slowdown, recession, discount, sale are common words now but will you be able to take advantage of such bargain price? Are you buying now? If not either you don't have cash in your hand or you feel as if market is going to fall further or you think that market is going to take long time to recover? Whatever may be the case, don't miss these opportunities which comes once in lifetime. Buy equity, asset with highest return over the period.

India is impact due to global slowdown, the real problem lies somewhere else. World has accepted that we are in recession and there is no denial (once you accept that you have a problem, you start thinking about solution with open mind, but as long as you try to cover up the problem, solution will never come) hence recover will start sooner than later.

Over one-year since the credit crunch began, American taxpayers are now on the hook for an estimated $8 TRILLION in total spending and “commitments” by the government in its desperate attempt to prevent a total meltdown of the financial system — yet stocks continue to tumble, banks refuse to lend, and the economy keeps sinking! From over all picture $8 trillions is not a small amount of money. So, it seems like we are almost done, or close to the bottom of this crisis.

Five full year’s worth of wealth creation — completely wiped-out in just over 12 months. It’s as if someone pushed the reset button on the last bull market … perhaps all the wealth we saw during the bull was all just an illusion to begin with? Wealth created and then wiped out, what next, it's simple wealth creation, because it is cyclic in nature.

We’re likely to see steeper earnings disappointments, deeper worries about home foreclosures, and debt defaults, across the entire American economy — as other sectors are hit — retail, autos, and technology — for example. Take these an opportunity to buy at much more discount.

It’s true that stocks have already declined significantly, and powerful short-term rallies could come at any time.
-Payal Saha, Associate, HBJ Capital

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