panch-tattva talk…RBI action

Friends,

 

RBI has in a sudden move ,though expected at some time in near future, has raised the repo rate by 75 bps and has further raised the CRR by 50 bps to be implemented in two tranches.

 

Earlier RBI Governor had informed that the necessary tightening of money supply and raising of interest rate would be resorted too but with a consideration that the growth does not take a beating . Inflation at high level is the cause for it. The markets took a negative view and opned lower but strangely, not for me, through out the day buying was made by some quarters without upsetting the applecart and in a very subtle way which saw the down opening turning in to a decent gain over the last closing . Clearly, some smart people are accumulationg good stocks in general. I have told you earlier that the entire Nifty universe has opened buying opportunity and those who wish to be on the right side of investment may buy.

 

The political bad news, the economic bad news and the international bad news is slowly loosing its effect on Indian market as the values have become very proper , for the entry to be made. The profitability may loose its tempo but the future profitability is not going to be affected by the intervening period of tight money supply and high interest rates as the real interest rate is still not high, rather it is on the lower side of the range it has traditionally maintained.

 

So, my advice still stands ie buy for long term without getting unnerved and buy the companies under good managements only for the long term delivery of rewards can only be expected from such groups. The mediocre may not be kept long term company and the dishonest have to shunned outrightly. I have been indicating as to who has what character from time to time, not that I want to throw bad light on someone but I feel duty bound to let my readers know the true colors of the managements as it is necessary to have such an idea for an investor before he commits their hard earned rupee.

 

HariOm,

krsnaKhandelwal