“What is it that goes up but never comes down?” this was a riddle that was asked to me by 21 year old boy. My answer to him was, “definitely not the stock market!” We started this year around 4650 and rallied to 5400 levels and today we are close to 4900 levels.

Does it really matters where markets are heading for you to take your investment decision? If your answer is ‘yes’, then my advice is to re look at your strategy and it is time to re-write it again.

Warren Buffett once said that invest in equities thinking stock market will close down for next 10 years. My understanding to his insight on this subject is to focus on quality stocks (Companies) rather then studying the behaviour of stock market. Finding out quality stock is far easy then investing just looking at price and volume charts or any other technical charts.

The European financial crisis and specially Greece is being taking the centre stage from last one year in financial world. The last weekend G8 meeting at Camp David Maryland USA addressed European crisis by their leaders, but nothing new emerged from that.

A very reputed hedge fund founder Ray Dalio said in the interview with Barrons last weekend that, “At the moment, there is a tipping toward slowing growth and a question of whether there will be a negative European shock, and that will favor low-risk assets. But to whatever extent we have negative conditions, central banks will respond by printing more money. There will be a big spurt of printing of money, and that will cause a rally and an improvement in the stock markets around the world. It’s like a shot of adrenaline: The heart starts pumping again and then it fades. Then there is another shot of adrenaline. Everybody is asking, “Are we going to have a bull market or a bear market?” I expect we will have both with no big trend. Typically, in these up and down cycles, the upswing will last about twice as long as a down swing. We are now in the higher range of the up-cycle.”

 

You can read the whole interview here:

 

http://online.barrons.com/article/SB50001424053111904370004577390023566415282.html#articleTabs_article%3D1

What are your views in regards to the above interview? Share with us.

Also do let me know which company you want me to cover for my next week post. Leave maximum 5 names of the companies in the comment and we will choose the most popular ones.