Friends,
There are variety of fears that people are nursing in their minds. Some of them are given below:
-that the financial system is going to collapse around the world and hence the purchasing power should be converted in to bullion.
-the bank failures will be rampant, at least in case of private banks, hence money be kept only in SBI.
-the shares will be worth only as much as the paper used in certificate.
-there will be hyper-inflation and the only thing that will have value is ‘roti’ or ‘double-roti’. For the rest there will be no buyer, hence store wheat and wood.
-the recession will make companies loose all their reserves because they will be selling end product at lower value than the raw material consumed.
-the bear market will continue for eighteen to twenty four months.
-the banks do not have trust in each other and clearing process will stop.
-the petroleum is cheap hence the recessionary times are round the corner.
-the cheap commodity prices are bad for even the assemblers and value adders.
-there is no buying power with people.
-companies will have lost pricing power.
-there will be job losses on large scale.
-the machinery of companies will not be saleable as scrap even. The land and building will rot and salary payment will be eating the entire companies reserves.
-foreign capital will not enter ever in India and flight of capital will continue.
-dollar will be costly and rupee of no value.
-elections will further deteriorate the situation.
-the global slow-down will make us suffer more.
-the worst is yet to come.
Now, you have to rationalise them yourself and carry only the necessary weight of fear. I have spelt out these fears above because while they lurk they are more forceful, once you give them a cool careful glance you may overcome them.
HariOm,
Krsna Khandelwal
BIRDINFO Stock Rx – A prescription for stock market
