Let us say you go to your car mechanic and he tells you that the wire connecting your brakes and car is lose. What will you do? Will you ask him for the exact time at which the brakes will fail or will you immediately request him to repair the problem? It is quite possible, that your brakes might work for sometime till the wire completely breaks off. Will you take the risk of repairing the brakes moments before they actually fail?
The same way when it comes to investing, it is possible to know when things are overvalued or undervalued, but no body can predict the exact time when a crash or a rally will come. We need to learn to leave a bit on the table and pull out when we are in heavy profits and need to invest when the markets are in deep red. A lot of people have been asking – when will a property crash and stock market correction come? Others have been asking if it still makes sense to buy gold. I am sitting largely on cash and continue to hold gold. That is all I can say at the moment, because a lot has already been said by me in the past.
Time will make things clearer on the real reasons gold is bound to rise. We will be entering one of history’s most exciting as well as challenging moments soon. Unfortunately, people who are not prepared will end up losing large amounts of money and a very small minority who is armed with knowledge will end up being rewarded enormously. Investors in major Mutual Funds, Insurance, Real Estate as well as some big International Banks will bear major losses across the world. India will be relatively protected, but there have been lots of instances where financial institutions have sold junk Mutual Funds and Investments to clients. In spite of India offering so many value picks, these people prefer to chase a handful of glamorous companies in businesses that are losing cash daily. Look at some of the media companies in India and see the amounts of cash they are burning.
People on the inside already know what is coming and most of the large media organizations and rating agencies are well funded by people on the inside to let the masses know the realities. Isn’t it surprising that America has a better credit rating than India, even though it is head deep in debt?
What happened in Dubai is very small, as mentioned earlier. We all knew it was coming. Imagine what happens when the great grandfathers of Dubai in terms of debt go under.
On another point the recent eagerness to change timings of the stock exchanges, doesn’t really matter to investors. A good investment is always a good investment and a bad investment is always a bad investment. It doesn’t matter whether it is 9 am or 10 am. Of course, I can understand that is must be hard for people working at brokerage houses to leave much earlier and put in extra hours unnecessarily. I would rather want them to spend it with their family and lead a happy quality life.
Recently I saw Rocket Singh – Salesman of The Year. I loved the movie and connected with Mr. Singh’s character. It reminded me of the time when I was barely 15 or 16 and during the summer vacations started working for a small company in sales. My other all time favorite continues to be Guru.
Our last post had me laughing out loudly after reading the comments posted by a fellow Happionaire, whose wife is extremely upset with me. I do hope I get millions of more wives out there just as upset!
Have fun and happy investing!