Surviving the BEAR

We are now 12 month into a falling market. A market that falls for more than 9 months is called a primary BEAR. But there is interesting statistics that can be observed now. Assuming all the investors were smart and knew Oct 2008 was a smart entry, how many investors do you think are still stuck in the market now that NIFTY has reached Jun 2009 levels? There were 3 smart trends.
First was the one from Oct 2008 till Jun 2009 9 (T1-T3). The Second one was from Mar 2009 to Jun 2009 (T2-T3) and the third one from Oct 2008 till Nov 2010 (T1-T4). The second trend gave the maximum annualized return while the third gave the maximum absolute return. Assuming 20% of the investors are smart to get the complete absolute move, only 10-15% could have the shrewdness to capture maximum annualized return and stay out of the market. This leaves sizeable 55% investors that are still stuck with their investments. And by the way, we assumed 100% of the investing community was invested in Oct 2008, which is a wrong assumption. A correct extrapolation can easily take us to 75% or higher number of market participants that are still stuck with what they bought in Oct 2008. Now this is what a non trending market does. It makes it difficult to survive leading to problems, downsizing, mood lows and murky outlooks.
This special report carries trade ideas, levels, and projections on Nifty, NSEBANK, CNXIT, Lupin, HDFC, Petronet, Axis Bank, Reliance, TCS, SUN, BOB, Havells, Bajaj Auto, Mahindra and Yes Bank.
To read the complete report download it from Orpheus E store.
The article without cases was written for Business Standard
Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.
Coverage India: CNX500 traded stocks and Indian Indices.