The rebound begins
The finance minister and his team are doctors who know the right cure for the dire situation. The patients, in this case our people, know that the situation warrants tough calls being taken. But, the relatives of the patients, the politicians, are playing around the decisions with reckless abandon. They actually believe that they know what is right for the patient and are stalling all forms of treatment. Nobody is paying heed to the doctor’s dire warning. We all know what happens when timely actions are passed over in treating serious illnesses. Unfortunately, India is allowing time to pass without treating her financial ills. The politicians are squarely to blame for postponing pain and compounding it. The worst part is that all this is being done in the name of the patient, the aam aadmi of India. The Doctors will has finally prevailed. Hopefully, the treatment continues without hitches from relatives. Or else, we the patients have enormous pain waiting for us when things worsen.
The memory of people in the stock market is very short.
The sharp global rally has left most stunned. Knowing how the markets work, it is hardly surprising. If you missed buying, there always exist other ways of playing the rally. A rally in the markets tends to take all stocks higher. Non performing investments rise too and the rally should be selectively sold into. Investors tend to sell performing stocks on rallies and hold on to non-performing bets. This folly must be avoided during the current rally. Selling the laggards in your portfolio will release cash that can be used to buy performing stocks on dips. The markets may not runaway. The fundamentals don’t support that prospect. But, the worst could be behind us and the rally is a sign that the markets think that way.
The sharp rally is an opportunity to clean up books. Time to act.