Market wants you to take a stand

• Posted by vinaydh
• on January 20th, 2010

In this market the choice is very clear. If one takes a stand one can at worst loose money but if one doesn’t take a stand one would loose money as well as sanity. It’s better to stick to one’s bias rather than jump around with every market antic. The most a bull or a bear can loose is money but those without any conviction would jump ship at the first sign of trouble and eventually end up loosing money as well as sanity. This market is as tricky as it can get. It wants everyone to keep second guessing it.

I still think that the market is on track to 1160+ sooner rather than later. One of the reasons attributed to today’s sell off has been China’s decision to clamp down on bank lending. Now one can’t have the cake and eat it too. If there is visible growth then tightening will take place. The choice is simple, no growth and lax monetary policy or strong growth and tighter monetary policy. It’s not that the market needs me to explain these things to it. It understands it pretty well and it’s reflected in this biggest rally since the Great Depression. It’s just that this market loves to throw tantrums and doesn’t want anyone to get too comfortable with this rally.

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