Market knows it best!

I am writing about the markets after a long time. But I realise that nothing much has changed since I wrote last time. Liquidity is good. Good companies are growing well. (Tata Motors) There are multinational takeovers (Bharti Airtel). Indian rupee is holding its ground vis a vis US dollar. Domestic insitutional investors (DIIs) are flush with cash. Specially LIC. They have plans to invest another US $ 2 Billion till 31 Mar 2010. As a result more stocks are shifting to domestic hands. Good for stability. Advance tax collections are far better than expected. GOI is likely to have lesser fiscal deficit than expected. Govt PSUs are ready for disinvestment with no resistance from any shores. Budget is likely to give signals for long term reforms. It augurs well for the markets. So says the market by the sharp recovery shown in the indices in the last two sessions.

The sad part has been the recent terrorist strike in Pune. The attack caused loss of innocent lives, serious injuries to many and loss to property. We need to handle the threat of terrorism more effectively and provide safety to common people like us. Hopefully collection of ground level intelligence will improve.

So we continue to buy stocks on all dips. Indian markets are good for a long term haul. Buying stocks is better than fixed deposits. Stocks beat inflation and can be encashed at short notice witout any hassles. Except when one has bought them in a over heated market.

So I wait for another bout of correction. It ought to come before the budget. Let us see.

rgds
Vibhas