Thread by @AnandableAnand

Market crashes, when almost no one is expecting it to crash.

Right now, 30% guys I speak to, are expecting a sharp correction.

So at best it will consolidate here or time wise correction. Crash won't happen.

So side ways movement for next 2 months?

Another way a sharp correction can happen is event driven Like lehman / ILFS collapse

That, imho can happen any day in India or globally.

So many bankruptcies are being filed, it will have cascading impact on financial sector.

Just a thought, LEHMAN collapse happened in September 2008 and NIFTY took nose dive from 4400 to 2200, a 50% correction in 50 days. Less than two months. Made a low in Nov 2008.

Also, last time FED started lowering interest rates in Sept 2007, and Lehman collapsed one year later.

So two things

1. FED money can jack up equity markets but can't prevent eventual global meltdown. It's a matter of time

2. These collapses take their own time and prediction

Of exact month is difficult.

For traders, 2007-2009 was one of the best period. Just follow the price trend.

For buy only investors, it's going to be very challenging.

Value boys will lose their pants, just like last time as it's very challenging to get valuation right in such

Uncertainty

For momentum guys, only Bravehearts will survive as your backtest will show you, BUY only momentum strategies give you much sharper correction as compared to NIFTY or buy and hold.

So when eventually nifty corrects 50%, BUY only momentum will correct 60-70%.

If u are investor, and made decent gains it's not such a bad idea to book some profits now and sit on 30% cash.