Stock Market: Is the current decline in the stock market just a stop in the bull market? Or are we standing on one side of the bear market? The debate is reminiscent of the story of an elephant and six blind men, who try to guess the size of an elephant. Stock market expert Vijay Kedia said this in an article written for Economic Times.
Kedia said, no one knows what are bull and bear markets. Everyone describes it based on their positions and the performance of their portfolio.
Some bluechips down 20-25 per cent from recent highs
For example, some bluechips have broken 20-25 per cent from their recent highs. Even the stocks of good cement companies are down 20-30 per cent from their recent highs. Those who have positions in such stocks might be thinking that this is a normal bull market where a reaction of 20-30 per cent is normal.
In the mid and smallcap segment, there are many stocks that have lost 50 to 70 per cent. If you have invested in these stocks, then you will be in no less condition than the recession of 2008 which started after the Lehman Brothers Crisis.
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New Age stocks fall up to 80 percent
New Age stocks on Wall Street are down 80 percent. Many of them will not touch recent highs in the next 5-10 years and in some cases never.
If you are an investor in midcaps then you would feel that you are already in the bear market which is 4-6 months old. You will see that lots of shares are getting down up to 50 per cent in BSE500.
Look at the Stocks, Then Take a Position
Kedia said, if you are thinking about the timing of the bull market or the bear market, then you are just wasting your time. Look at the stocks and take your positions based on that. Take a look at the growth prospects of the company you are investing in. Stay away from sunset sectors at any cost and stay in sunrise sectors at any cost.
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Bull market persists in one part of the market
Keep in mind that as the sun shines at some place on the earth, in the same way a bull market can prevail in any part of the stock market. The market is as big as the sea and turbulent in one part, but calm in the other.
Thus, it is neither a bear market nor a bull market. It’s just the stock market.
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