This week was a roller coaster ride for many. Some are already saying “Thank God It’s Friday.” I’ll say, thank god I cancelled my travel plans, stayed back & experienced the drama unfold in most fruitful way. Time for key learnings:
– When VIX is high >20, avoid ultrashort term trading because markets can move in any direction in a blink of an eye.
– Market hates uncertainty & loves certainty. On 4th June, there was uncertainty on whether NDA will get the desired support & able to form a government? And the market tumbled 6%. On 5th, I remember in afternoon, the other parties gave their clear intention to support unconditionally & form the government. Certainty came & markets are up. Recovered all lost gains.
– Those who panic sold on Tuesday assuming the market peaked out, are repenting looking the market stabilised again.
– Those who had cash were the king who got multiple beaten down stocks at reasonable valuations.
– Those who bought the dip are rejoicing. Buying quality businesses at reasonable valuations always pays off when markets dip.
– In markets (and usually in life too), have courage when others are fearful.
– Looking at just that 1 day 6% fall in indices & making a conclusive decision that we are entering bear markets is naive.
– Last but not the least, time after time, markets have taught that those who HOLD on to quality businesses with patience & tolerance are sooner or later rewarded. And this week is a beautiful testimony of that.
