Tuesday, October 09, 2007

Eighteen and on

On 18th September Ben Blew the whistle for the "Beta Treasure Hunt" and it still continues, with some finding huge treasures along the way. So sensex yesterday reached 18000 and all of us have a reason to cheer.

Lets look at what really happened - After the Fed cut the rate, there was new wave of liquidity that was chasing high Beta. One saw it in US markets, in emerging Asian markets and popular Beta stocks in the US markets viz. Google, Apple, RIMM (This is what minyanville says not me!). But in last week or so we have started seeing a divergence in this beta, what it means is they are not all moving up in sync, these are definitely first signs of caution.

But, but but rallies like this typically end not on the basis of technical indicators or valuations, they end with structural imbalances manifesting into something awry. From what little I know, I think they are getting there and it is just a guess, I don't have any claims to smartnesss, but we are seeing something really really soon, maybe within a week. I could be as wrong or right as anybody and certainly don't claim to be smart.

Atleast now I have started hearing words like "End of Bull Market" from eminent fund managers, so the current mad rush is to get the maximum buck for your bucks.

Having said so - I would say continue to party, as long as it goes on, but don't be a minute long than you should. One would have no place to hide!!

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