Is Market Headed For a Deep Correction?
This is one secret that probably even a newbie knows. Ask anybody and he will quickly point that it’s certainly headed for a deep correction, but when I am not sure.
“Arre Baba market ko girna hi hai. Itna badh gaya hai jab puri economy barbaad hai.”
And you know what I feel.
I too had the same feeling till 15-20 days ago, but as I saw the Twitter threads, discussions, news, and overall mood, I became almost sure it’s not going to crash anytime soon.
There might be some corrections of 5-10 percent, but not something like the Corona-type crash we saw or like the 2008 crash when Sensex went into 4 digits.
And I am saying not because I have a deep understanding of technical charts.
My simple logic is if everybody feels the market will fall, it will not fall for sure. Mr. Market never respects the collective IQ of the crowd. It’s similar to when everybody starts feeling about the bull market’s strength; it’s almost sure that the market will not go up. It’s a clear signal that you have to be cautious.
When the market has to crash, it will not give you time even to think. Just 5-10 trading sessions, and you will see everything red on the screen.
And there is another reason; if the market has a non-stop rally of over 100% from the bottom of the 2020 crash, some correction will do happen to clear the froth.
There is already a significant correction in the smallcap and midcap segments, and the froth has gone down to an extent.
I know you’ll not believe my words and who is more competent to explain this than Shankar Sharma, Managing Director of First Global. The person who felt the market nerve tick by tick from last 40 years.
Listening to him is always gives you a surprise as you learn great wisdom quickly.
So what he feels about the market right now. With eyes gleaming and a smile, he quips,” market is certainly not going to crash. There may be some 5-10% correction but not a crash like aN event we saw. People make this wrong assumption because they compare it from the bottom of the market crash in 2020. However, when you compare it from the pre-corona period, it has not gone up much. I believe that bull market is here to stay for quite some time, and this is the start of the bull market.”
And then he says further,” In dollar terms, the Indian market has not given any return from the last 10 years. Therefore, it has a lot of potential or room to grow now. If it’s a pond with 100 ft capacity, I’d say it’s just filled 1-15 ft. I’d have been skeptical if it gives 40-50 percent return for 2-3 years.”
And boss, when he says something, you have to listen.
And if you don’t listen, then for such people, there is a famous saying in Bihari,” Beta makhoge (you will face the consequences of not doing right things.”
Even Samir Arora, the iconic hedge fund manager of Helios Fund, says, “25-50% type crash baar baar nahi hota. It happened in 2008, and then this happened in 2020. Corrections aate rahenge, ussse ghabrana nahi hai. Keep invested.”
The bottom line is there is no need to panic. If you have made a decent profit, book some profit and buy on dips.
Please comment if you like the story as it takes a great deal of time to write such things and your comments will certainly encourage me.