Azadi Ka Amrit Mahotsav 🇮🇳 ‼️
Today we are celebrating 75 Years of our Freedom.
We have seen DotCom Bubble Bust (2000), Great Financial Crisis (2008), and now Covid-19 (2020) and based on prior experiences we are suggesting following plan of action.
- You must keep your investable funds in Fixed Deposit or in a Physical Gold (Silver).
- Wait patiently for Next round of Crisis, Trouble, Panic, whether Financial or otherwise.
Please don’t follow this blindly. Most importantly, we are available to help as usual. No hesitation – ask your question freely.
Furthermore, we advise you to evaluate this from all angles and depending upon your financial requirements either follow this fully as mentioned here or in parts.
Advised in March 2020 👇
Now, Please Understand Three Things,
- First: Don’t Assume that Crash / Fall is near.
- Second: But it does not mean Crash / Fall would not happen.
- Lastly: This is just a Idea / Concept. Final Levels at the Time of Fall.
Treat This as Homework. Rather Tentative Planning for that Impending Fall.
Here are Panic Levels to do long term Cash Investments.
We don’t suggest Cash Blocking at NIFTY50 levels of 18000.
Our strategy is to accumulate cash over long duration to deploy in lump sum at a very specific time / market levels. Which means, if you are in Stock Market for quick gains then definitely we aren’t the right ONE for You. Patience is Key here.
- Panic means End of World Scenarios at Country Levels.
- Crisis means Macro Issues at Individual Company Levels.
Investments at these times has huge Margin of Safety.
And, Reward remains unknown. Possibly Multi-Bagger.
We had seen these things happening. Sometimes you are spoil of choices (like March 2020) and many times there is dry spell like the one we saw from January 2021 To June 2022 period.
Some Levels for NIFTY50:
- At present 14200 is First Entry Level – Correction Stage.
- Second Entry Level – 11500 – Recession Stage
- Third & Last Stage – 9300 – Depression
During 2008 Crash we had depression stage Entry. And after that immediate recovery.
Likewise, Covid-19 pandemic market Crash came & bounced from Recession levels itself.
Importance of Stop-loss:
In Stock Market whether Trading &/or Investing must be done with Stop-loss.
Stop-loss is a safety precautions. Must not be ignored.
Because, even In life Fortune doesn’t take much time to change. And, in Stock Market fortune could change overnight.
Only Stop-loss can give you second chance. 🙂
How to Apply Stop-loss & Re-Entry Rules:
Suppose, You brought YESBANK Shares at 155 Levels with 95 as Cash Closing Basis Stop-loss. When prices closed below 95 NSE Cash then you have no option but to book losses. Ruthless Execution. No second thoughts.
- Result: 39% Capital Loss. You feel Bad, Very Bad.
But, imagine the mental relief when you saw YESBANK trading in range of 10 To 20 for close to next three years. Now, here are two possible Re-Entry points,
First: Wait for prices to come back above 95 to Buy back the same quantity.
Second: BUY at Government declared Floor Price. RBI had mandated at ₹12 per share price in case of YESBANK. And, entire financial world did invest in YESBANK at & below same level only.
Retail people (like you & me) got Entry in range of 10 To 12 for close to 3 Months after announcement of that Floor Prices.
And if you are buying then buy the same quantity what you exited at 95 levels.
Recall there was no floor pricing in cases of DHFL, IL&FS, ADAG Group Stocks…
Here we must recall the case of Satyam Computers which was taken over by Mahindra & Mahindra Group, way back in 2010 which is now functional in name of Tech Mahindra.
This is also a kind of Floor Pricing Example, where You are buying same quantity at & around take-over pricing.
Same thing had happened earlier in case of Global Trust Bank, here GTB was amalgamated with Oriental Bank of Commerce (now PNB). This is in net Loss till date, But a reasonable one. Because, at least your capital didn’t go to Zero.
Lastly, You must not use these levels for Derivatives. Neither for Futures nor for options. Panic Levels are Purely meant only for Long Term Cash Investment.
Need more help?
☎ +91 9900330558, Bengaluru; Preferably during Market Hours (9am to 4:00pm).