Thread by @TreasureHunt_TH

Its interesting to see the TV anchors coming on a daily basis and showing the previous charts on mkt falls.

Year 1992,2000,2008 and 2020. As per these analysts there might be many falls which would take out the previous low.

Lets check the characteristic of these falls...

2)
Year 1992:
* India centric ( Harshad Mehta scam) Mkt fell 52% from the top in a span of almost a year. It was not a sudden fall.
* Post the fall mkt recovered completely by mid of 1993 and gave return of 250%+ in 2 yrs time frame.

Year 2000:
* Associated with dot com bubble.

3)
We had mentioned in one of our tweet, anything and everything associated with infotech in name was accumulated by investors with out fundamentals. Greed and speculation was ruling the mkt. The mkt fell 52% & took 3 yrs to recover & had a massive uptrend for the next many yrs.

4)
* The interesting fact is, over all 3 yrs correction the mkt had formed bottom in Aug'01 and it was side ways for the next 18 months. And in Fy'03 ( Apr-Dec) Mkr almost recovered the entire gains ( doubled). And the next 5 yrs gave a return of 400%+ ( from bottom 700%+)..!!!

5)
* As a novice my entry also happened in middle of this bull run....😄 A portion of my hard earned money started getting deployed in to the mkt. It was easy and interesting till we faced the biggest fall..!!

Year 2008:
* It was indeed steep & shocking. The indexes..

6)
indexes corrected almost 60% through out the period (13 months). Multiple bear mkt rallies also took place from 30%, 40% and final 63% fall from top.
*The market recovered and gave a return of 500% from the lows in the last 10 yrs....

7)
And not denying the fact, there were minor corrections which lasted a mth or two.

Lets look at some interesting facts
* The prolonged period of correction has come down from the first one to the last one. The first was almost two years+ and the last one was barely a year+

8)
* Investors had enough chance to accumulate quality stocks but remember some points here. Some of the stocks corrected in the first phase hadn't corrected in the second phase, means the first correction itself was giving enough margin of safety on a valuation point of view.

9)
* Many retailers who bought stks were selling in each uptrend and they managed to make good money but eventually couldn't buy those stks, expecting another fall.( including me some stks, ). You will understand this only when you check the compounded return after many yrs.

10)
* Those stk we bought and kept in the first two falls had given us much bigger return than those profited and reinvested during the course of correction.
* Experts say leadership and sectors in tough times, bearish on some sectors. But eventually the ever green sectors will..

11)
recover after the correction and give much higher returns than those which were strong during a correction. Its all about where smart money is going to come eventually.
Eg:-- Financials vs pharma theory now.

12)
* We would like to summarise this way. A retail shouldnt wait for major corrections for all the stocks. Its all about valuation and one's comfort zone. Buy when value is visible and invest in tranches.
* Raise cash at each interval, book 5--10% profit when you get it.

13)
* Profit booking on invested stks helps one remain profitable always and reduce the holding rate considerably down.
* Stay away from too much negative news and look for investment opportunities in each fall. Many miss the bottom this way. Mkt is forward thinking.

14)
* And final one,never compare one event with another, there will be some similarity but the govts and regulatory authorities are more resilient now a days...!!

* Always keep 25% cash. There might be some opportunities coming even after the recovery.

~Happy investing...!!