Fearful
“Fearful when ‘others’ are greedy, and greedy when ‘others’ are fearful” is the famous quote of Warren Buffet which is applicable in stock market for ever. Sensex has reached 39500 level within no time. I think there is an absolute disconnection between reality and stock market. Of course, market is always ahead of the reality but when fundamentals are not supporting it, we should think about it.
My mentor says, in financial market when bubble build up, most players in the market indulge in the greater fool theory. They join the party and continue to reveal as the market climbs, believing that they will be able to get out before the crash. When the crash begins, they think it is a small correction and they will hold until the market hits the bottom. At that time, they sell it due to panic and handover it to genuine investor. Everyone has seen this drama playing out repeatedly.
Stock market is skyrocketing without any rational. Experts may come up with many reasons but my common sense says I should worry about the rally. I am not saying stock market will crash or collapse in near term because no one can predict the stock market. But when we face this kind of situation it is better to take decision based on your time horizon and goal.
“Save, Invest, Spend and Be Happy”
