Monday, May 11, 2009

Post 607 : Cash is king (and possibly dumb!!)

Four days ago, moved out of the markets and into cash. Its rare, if never that I hold cash in my hand. I believe markets fall-rise-oscillate-gyrate, stay invested…that is the smartest way to be.

I am now 90% cash, 10% stock. Why this “proselytion” to a newer faith? In my 15 years of being invested, never even in post dotcom bust(y) days have I ever held cash over the market.

Devina Mehra puts in in this interview, we are all ignoring the elephant in the room, assuming it will go away – I think I could not sum up my own apprehension better.

Elections are not just an elephant, it represents a herd on a rampage. How long before they make their presence felt in the room.

My reading 3rd front might be a good possibility (dont look at me like that, I did not vote, and I am not responsible for it!!). If that assumption is correct, a 40% shave off the market does not seem too far-fetched. Mr. Karat’s gang is capable of all this and more.

Like any other bet, this bet of mine can go all horribly wrong. How horrible, with the sensex at 15PE, and gloomy shadows for the next 3 qtrs, is your guess vs. mine…..

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