Stay Invested Don’t Panic
There
is panic in market . Heavy selling leading to sensex , nifty and major indices
tumbling down . One should evaluate this with a little bit of common sense .
·
Is this due to permanent or temporary
reason . Its because of temporary reason – Corono virus .
·
How long the world can see the impact ( health
wise ) of corono virus – difficult to say but definitely not beyond few months
. No virus has stayed for very long time .
·
Why this impact in terms of business and
market – Business Travels , business meetings , business conferences almost at
a standstill pace . Impact on Order Book of any company . There is a gap when
order booked and business realised and accounted in profit . So going forward
there will be a big dip in revenue ( 1 quarter for sure , may be next 2 quarter
there could be cautious wait and watch approach ) . Now with reduced future
earning clearly visible and that on the back of already slowing economy short
term problems have compounding negative effect psychologically .
What
will happen once after few months Corono virus does not exist --- Reverse of above . Business travel meet ,
order books everything will grow . The moment increased sales realisation
happens market will revise the earnings upward and beaten valuation will again
scale up .
Only one suggestion I can give –
Don’t redeem your equity investment in panic . Have patience and stay invested
. Valuations will move up because it went down because of temporary reason and
once that temporary reason is gone it will move up.
