The opportunity lies in boredom.
There are times when you simply buy. There are times when you have to hold on and do nothing. There are times when you should just sell. India has seen all three situations. Our response to every situation determines our outcomes in investing. Indian investors have a long history of mixing the three situations up. Habitual responses have actually hurt. So, let us understand the habit and how it hurt us. One habit has been to buy for a one year horizon. Several HNI’s tell advisors they will see results for one year and then decide how much more to invest. This is almost like an investment law. An advisor then loses the opportunity to invest aggressively for these clients simply because they asked him to wait for one year. Investors seem to be playing the prolonged economic recovery in this fashion. Precious buying opportunities are getting passed over simply because evidence of returns on the table is weak. Waiting for returns to show up before buying more can only hurt in times like the present. It is like saying “I will pay a premium to sellers if you show me returns “. Now, that would only make an advisor look ordinary thereafter. The game is about not trying to time very finely. Reforms are mostly long range and benefits will accrue over sustained periods. Buying works best when done before benefits start showing up and newspapers headlines start picking up the data. We are exactly in that insipid phase when government fixes problems one by one. The deep-rooted nature of problems will definitely hamper& delay results. A smart investor should see opportunity in that delay. This is the time to just keep buying.
“If an investor had bought at the absolute lows, it would have been more a matter of luck than anything else. “ – Philip Fisher