Bull and Bear Market

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Note — Writing this as a note to myself. I own some of the stocks listed below and am not a SEBI registered advisor or any sort of advisor; just another learner in the stock market.

Everything rises in a bull market. You will fool yourself as a great investor when you are in a bull market. All your choices and your intuitions are proved right. As the saying goes, everything rises when the tide rises.

Everything falls in a bear market. You will start questioning your convictions when you are in a Bear market. And if you never had any conviction when you bought during the bull market, that is you had bought by looking at how fast prices were rising, then in a Bear market, you will panic, and sell when the prices go down.

And that may be the right move, in case the company had no conviction for its high price in the first place, or it may be a very bad move in the other case.

In my case, it is NYKAA and Zomato — thought both I had stayed away during IPO and bought only when it had crashed. Still, I find it hard to hold on to these, when the investor mood turns. NYKAA is still on my radar though.

However, my holding in KPR Mills, Infosys and TCNS Clothing has taken a beating from 10 to 16 per cent down. Yet I believe in these choices and I believe these will bounce back. It is easier to hold to your convictions when the markets are down. KPR Mills and TCNS have taken quite a beating, and an unexpected one. But then who would have thought INFY to dip 10 percent.

Good companies bounce back from their lows in a bear market; or hold their ground at some level. Infosys, SonaComstar , HDFC Life ?

Bad companies can even go down under and never recover. So beware of catching the falling knives.

On the contrary, a bear market is an ideal time to be going on a shopping spree for good companies, that have their price and hype moderated. KPR Mills , Infosys , SonaComstar , Polycab ? Even HDFC Bank maybe. But the bottom may be far off sometimes. And you could still go to deep red in the bottom fishing game.

As Warren Buffet tells — Being greedy when others are fearful is the right approach, but be greedy for quality not for price.

Distinguishing quality is the hardest thing to do!!

Falling knives are risky to catch. But some knives are so blunt and plentiful that you can collect and sell for scrap and still pocket some gains. Zomato anyone? Well, I tried, but again had to exit rather quickly as it seemed like a gamble.

No short term predictions. Medium-term IT should bounce back. Textile exports should gather steam and I am long on KPR Mills. Domestic consumption should rise for apparel-related and here TCNS and TRENT look good; though TRENT is better but costlier and I am betting on TCNS. Go Fashion also seems to be coming up. Will have my eye on the results ot Go Fashion and price of TRENT and the results of TCNS. Among the new IPO’s Campus looks very attractive and I am planning to slowly add.