Key Points
When emotional investors take an extreme view of an assets future and, as a result, take the price to unjustified levels, the easy money is usually made by doing the opposite..
The investors who find themselves obsessing with the current highs of the markets should carefully read and understand the following memo published recently by famed investment manager, Howard Marks, on his firm Oak Tree Capitals website..
It states, When the markets are at extreme highs or lows, the essential requirement for achieving a superior view of their future performance lies in understanding whats responsible for the current conditions..
This is the buying panic that I often warn investors about because market highs are actually a risky and dangerous time..
Marks goes on to say: Remember that in extreme times, because of the above, the secret to making money lies in contrarianism, not conformity..
You might be interested in
Vikas Khemani’s top tips: Remain invested & forget FOMO
21, Jun, 23“Most of the uninformed investors end up riding into the late stage of the euphoria and that is where they end up losing money. People should not participate out of FOMO. Market gives enough time and opportunity to every investor and there is a huge amount of money to be made through different sorts of styles. We should be invested in India. We will make lots of money.”
9 common mistakes equity investors must avoid now as stock market flirts with peak
09, Aug, 23While optimism is contagious, it's essential to proceed with caution and avoid falling into common traps that can adversely affect our financial journey.
Are the next 6 months good for a pre-election, pre-rate cut rally? Abhay Agarwal answers
18, Dec, 23“I do not think anybody is going to wait for the next six months outcome. People are going to rush in and start allocating their longer term bets now and that is what is going on when we talk to the foreign investors. Everybody is asking for new ideas, where they can deploy capital. Sometime back, the conversation was about how much to take off the table, how much cash to sit on but that has all gone in the air now.”
2023 was ‘ulta pulta’ year; 2024 will be largely about largecaps & FIIs: Saurabh Mukherjea
20, Dec, 23The sheer amount of money foreign investors make wont go into smallcaps so much; it will end up going into the larger stocks and we are hoping that Consistent Compounders will continue to make money from that. We are up 26% this fiscal in CCP. We manage roughly a billion dollars with our clients and we are hoping that as FIIs return, that 26% will be further augmented by FII flows.
Master Market Cycles: Recognize patterns, time investments
23, Mar, 24A common mistake investors make is trying to predict when to buy and sell stocks. Understanding how markets move can help us make smarter decisions about where to put our money.
Don’t make this mistake while buying stocks with Nifty at record high level
16, Dec, 23In this hype, many retail investors are rushing into the market. They may be influenced by the euphoria of Nifty at all-time highs and fear of missing out. However, in this rush to participate and benefit from the markets they are ignoring the risks associated with it. Risk is inseparable from the world of investing.
‘If you’re greedy in a bad market, you’ll most likely make money’; check Naveen Kulkani’s top stock calls
28, Mar, 23Naveen Kulkarni predicted 12% returns in the second half of FY24 and asked investors to be greedy in bad markets while sharing his outlook on the domestic equity markets.