Intended to blog only weekly, but the current situation in US has necessitated that I intervene to modify on my previous blog.
US markets are down dramatically this (US) morning, consumer confidence is at an all time low. Rate cuts by Australia and India and nationalization of banks (or banks' losses) by Spain, UK, Finland are failing to restore confidence in the financial system.
This is -ve for asset based valuations like Real Estate, -ve for Banking sector obviously, -ve for service companies (IT contractors), -ve for highly cash flow -ve Retail in India, -ve for FMCG and consumption based industries and hugely -ve for all project companies depending on project finance.
In my 6 years of investment and 9 years of tracking Financial markets, I have never come across such a situation. While I would not recommend a sell-off of assets, I would definitely recommend a major slowdown in accumulation of stocks till the dust settles.
The financial economy is beginning to affect the real economy and I would be stupid not to admit the fact that I do not know where and how this is going to stop. Most acts by central banks are still standalone and not concerted world-wide.
Conclusion: WAIT, Accumulate further only after Nifty breaches 3450 or till the dust (and global capital markets worldwide) settle down.
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