STOCK MARKETS AND OCTOBER

So it is proved once again that the month of October is not good for Stock markets. Over the past 80 years, starting from 1929, the month of October is always a bad omen for stock markets world over barring few exceptions.Remember how bullish/positive most of the market participants were just 10 days ago and see how things have changed dramatically. While the uptrend or so called strength during the last 2 months was labored and with declining volumes, the fall is sharp and swift to say the least. Like the famous words in U.S nowadays(TOO BIG TO FAIL) we are now hearing lot of voices now which say - IT WAS EXPECTED AND/OR I SAID SO. But as far as I know only very few stayed away for buying at 5000-5100 levels(nifty)even after the INDEX doubled in less than 7 months saying that every correction is a buying opportunity and lot of money is waiting in the sidelines to support the market at lower levels.

On the macro side, the closure of small regional banks in U.S is happening faster than the H1N1 deaths as the number has gone upto 115 as of yesterday(30/10/2009)from less than 100 at the start of the month(as mentioned in my article dated 2/10/2009).


Federal regulators close 9 banks, mostly in West; marks 115 US bank failures this year

And as per the Federal Reserve's own statement another 330 banks are in the watchlist.

The telecom sector was the worst performer last month in India, with the market leader BHARTI AIRTEL losing 1/3rd of its market cap. Amongst many others, one of our knowledgeable market analyst Mr.Ramesh Damani, candidly recommended short in telecom and long in Airways as a contrarian bet sometime ago and he is spot on in his reading.KUDOS to RAMESH DAMANI!!!!!!!(He also mentioned as one of the reason for the industry's tough times is the new emerging concept"GOOGLE VOICE"). By the Way,I am not a technology man by any stretch of imagination.

With U.S market in lot of mess still and the printing notes and giving stimulus is not the solution, the crisis created by 40-50 years of borrowing and spending can not be corrected in 1-2 years. My reading is that it should take atleast 5years if not more and so we are in for long testing years before the new highs are made in any sustainable basis in emerging markets or elsewhere. So learn to be patient and tone down your expectations. Happy investing. BEST OF LUCK.

MY ONLY RECOMMENDATION: SPICEJET(BSE:500285) CMP 37.05 TARGET Rs.60-75 in 12-15months