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Old 29-03-2017, 01:33 AM
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Originally Posted by rsi View Post
I just wonder........ May be I am thoroughly wrong or I am less informed or may be I am too dim witted to understand this concept ..........

But my doubt is .........

Why do such concepts come up for discussion near the top of bull markets only?

From 15th March till today i.e. 28th March , how is the market moving, bull markets are nit that easy to trade from a traders perspective, investors may disagree.
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Old 29-03-2017, 02:08 AM
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Originally Posted by no1lives4ever View Post
That is what I liked to point out in the original post.

If you read the actual article, it was the kind which you see when markets are nearing tops. The kind of time when everyone thinks that the stock market is a good place to invest. And that whatever is the current theme driving the bull market will be on for a long time.

Interesting part is that in current market everyone is very skeptical about hitting a market top and no retail traders acting like stock gurus.

-- no1lives4ever

I am not ultra bullish, but situation is still far from sounding like a "Top" is nearing. This is again our own ( experienced trader community ) belief engraved from past instances. What i feel, situation is like observing very first divergence but actually it has to go far away and up from here.
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Old 29-03-2017, 12:31 PM
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Originally Posted by rsi View Post
I just wonder........ May be I am thoroughly wrong or I am less informed or may be I am too dim witted to understand this concept ..........

But my doubt is .........

Why do such concepts come up for discussion near the top of bull markets only?

Pretty interesting and a valid question.
What could be the reasons ?
Why do you think mkts are near a Top ?
What pointers excluding "high" index PE tells you the same ?
Why "this time can't be different after all" ?
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Old 29-03-2017, 01:30 PM
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Originally Posted by jazz View Post
Pretty interesting and a valid question.
What could be the reasons ?
Why do you think mkts are near a Top ?
What pointers excluding "high" index PE tells you the same ?
Why "this time can't be different after all" ?

I donot know whether the market is near the top or in the middle of the run away bull move. As far as predicting market tops and bottoms are concerned, let me assure you and every one here that I am absolutely clueless. After getting more than enough beatings from the market (read as after paying exorbitant tuition fees), one thing that I have learned is that I should expand my holding period beyond a few months, which was the case earlier. For example, earlier I brought Lupin at Rs. 400/- and sold at Rs. 450/- and then watched it growing 4X, 5X etc. Same is the case with Care ratings and many other stocks. Changed the outlook, changed the holding period. Result - Navin Flourine brought at Rs. 500/-, still holding on. Brought A. K. Capital (by looking at your post here in this forum) at Rs. 203/-, still holding on. Pocketed the dividends in the meantime. Wyckoff is used to time the entry.

What I am trying to say is that I have given up leverage completely. I have grown older and consequently my ability to withstand shocks is less. I have become very averse to loans and debts. That restricts one's personal freedom. If one is unable to repay the loan, then he has to hold his down in shame in front of the lender, who may insult in public. That means, I would like to grow rich slowly. It is just like fruit ripening in its natural course, rather than prematurely and by using harmful chemicals. There is vast difference between these two types of fruits.

What will happen at worst, if I donot get rich at all? Will the heaven fall down? No. Irrespective of the wealth (or the absence of it) I have, one thing is certain. I can spend only so much. I can eat only three meals a day. Believe me. I do not own any vehicle even today also. The family where I was born, the way in which I grew up, my surroundings never encouraged the present day western consumerism. Consuming unnecessarily and in the processing wasting more than consuming was strictly discouraged. Wastage was and still is a sin. By the way, what is the yardstick to call oneself as "rich"? I do not have any answer.

It is this consumerism, which is the root cause of all these hurry to get rich. In the process one assumes disproportionate risk, which fails more often than not. I would like to die without any debts rather than leaving debts to my son to repay by assuming disproportionate risks.

I know. This type of aversion to debts may not be feasible in industries and business. But is it required at the personal level?

Sorry. I got a bit philosophical and wandered away from the topic.

To answer your query in short, I have no idea whether this is the market top or not. But this sort of irrational exuberance is seen only near the market tops.

Hope this helps
R. S. Iyer
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Old 29-03-2017, 02:01 PM
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Dear, RSI ji, gem of a post to come by after a long long time.
Nothing but respect.
Rock solid value system, superb wisdom ...
we should learn from seniors like you, please do post once in a while provided you have free time. Thank you sir. Fodder for the soul and brain as well, in days where "who cares about what anyone is saying" is more common and "I know all" is more prevalent.
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Old 29-03-2017, 03:15 PM
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Originally Posted by rsi View Post
I donot know whether the market is near the top or in the middle of the run away bull move. As far as predicting market tops and bottoms are concerned, let me assure you and every one here that I am absolutely clueless. After getting more than enough beatings from the market (read as after paying exorbitant tuition fees), one thing that I have learned is that I should expand my holding period beyond a few months, which was the case earlier. For example, earlier I brought Lupin at Rs. 400/- and sold at Rs. 450/- and then watched it growing 4X, 5X etc. Same is the case with Care ratings and many other stocks. Changed the outlook, changed the holding period. Result - Navin Flourine brought at Rs. 500/-, still holding on. Brought A. K. Capital (by looking at your post here in this forum) at Rs. 203/-, still holding on. Pocketed the dividends in the meantime. Wyckoff is used to time the entry.

What I am trying to say is that I have given up leverage completely. I have grown older and consequently my ability to withstand shocks is less. I have become very averse to loans and debts. That restricts one's personal freedom. If one is unable to repay the loan, then he has to hold his down in shame in front of the lender, who may insult in public. That means, I would like to grow rich slowly. It is just like fruit ripening in its natural course, rather than prematurely and by using harmful chemicals. There is vast difference between these two types of fruits.

What will happen at worst, if I donot get rich at all? Will the heaven fall down? No. Irrespective of the wealth (or the absence of it) I have, one thing is certain. I can spend only so much. I can eat only three meals a day. Believe me. I do not own any vehicle even today also. The family where I was born, the way in which I grew up, my surroundings never encouraged the present day western consumerism. Consuming unnecessarily and in the processing wasting more than consuming was strictly discouraged. Wastage was and still is a sin. By the way, what is the yardstick to call oneself as "rich"? I do not have any answer.

It is this consumerism, which is the root cause of all these hurry to get rich. In the process one assumes disproportionate risk, which fails more often than not. I would like to die without any debts rather than leaving debts to my son to repay by assuming disproportionate risks.

I know. This type of aversion to debts may not be feasible in industries and business. But is it required at the personal level?

Sorry. I got a bit philosophical and wandered away from the topic.

To answer your query in short, I have no idea whether this is the market top or not. But this sort of irrational exuberance is seen only near the market tops.

Hope this helps
R. S. Iyer


You reminded me of this fabulous talk by Jon Jandai.
BORKED

Its also nice to learn that you have grown wise enough to understand the power of Compounding. Transforming from chartism i.e knowing price of everything and value of nothing to understanding value of something , is truly an amazing journey.
It took almost 8 years for me to fix it. And I am glad I finally did it around 2011-12.
I think, the sooner one realize this, the better for his own wealth and health.
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Old 29-03-2017, 03:24 PM
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Thread digressed No good answers to why should ppl be afraid of 1-1.25% p/m obligation towards working capital when quite a few seem to be making at least 10X more?

Statutory warning: Not meant for newbies, retirees, those having net losses
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Old 29-03-2017, 04:56 PM
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Strictly from Business point of view, taking loan is ok, provided the underlying business model is sound enough if not foolproof, even then many business houses are wiped out with heavy debt burden, its a spiral once triggered , no escape.Measured risk is good, but more risk without considering conditions is recklessness.To me it has no right or wrong answer only probable scenarios.Choose wisely.
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Old 29-03-2017, 05:01 PM
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Originally Posted by kkseal View Post
Thread digressed No good answers to why should ppl be afraid of 1-1.25% p/m obligation towards working capital when quite a few seem to be making at least 10X more?

Statutory warning: Not meant for newbies, retirees, those having net losses

To come back to the topic, I would like to give the following suggestion here to all my friends here.

1 - 1.25% p.m. compound interest may translate (please calculate - I am very poor in maths) to about 18 - 24% p.a. interest. Penal interest for late payment is not added here. But that is also quite a reality.

Please calculate your portfolio returns (not just during the bull phase but also during the sideways phase and bear phase). Calculate the returns after deducting mandatory expenses (such as brokerage, taxes including short term capital gain taxes etc.)

Why one should calculate one's own portfolio returns? Because, it is you alone going to borrow money and hence you alone responsible to repay it.

Why you should calculate the portfolio return during all three phases of market? Because, you never know whether it will be a bull market or sideways market or bear market after you borrow and invest or rather should I say trade. Because to my very limited knowledge, true investor will be hesitant to borrow and invest in the stock market.

There seems to be misconception of 10X returns. It rarely (almost bordering the impossibility) happens in short period of time. To be honest, I have more than 10X returns only in two stocks, which were brought by my father way back during late 1980's. Even the 2X, 5X return which I mentioned in my previous post, did not happen in short period of time. It took years.

Also calculate (mathematically not possible), the amount of stress the loan will bring upon you. See how it affects you psychologically. See how it affects your trading.

So are you earning more than all the above mentioned aspects at portfolio level? You will notice that I am stressing the word portfolio level through out this post. Because returns in one or two stocks may be fluke.

I can bet that for majority here (myself included) it is not worth. To be honest, it may even be harmful.

Hope this helps
R. S. Iyer
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Old 29-03-2017, 05:43 PM
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Originally Posted by kkseal View Post
Thread digressed No good answers to why should ppl be afraid of 1-1.25% p/m obligation towards working capital when quite a few seem to be making at least 10X more?

Statutory warning: Not meant for newbies, retirees, those having net losses

Exactly, if one has sound strategy (as I said an algo with 85% or more success, why not leverage yourself, take loans.
Only and biggest problem is to control emotions and be disciplined)

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