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deepinsight
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Joined: 18/Sep/2006
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   Posted: 06/Mar/2008 at 4:32pm |
Originally posted by ThinkDifferent
Basant-Sir,
This leads us to the most important question of all. Is it a good time to leverage?
I think You have said in other threads that one can leverage during some special circumstances. Is this one such special situation where one can take a personal loan to buy shares?
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ThinkDifferent: IMO
WB has said it quite well. One should not risk somethings which is important (in this case solvency, capital etc) for something less important (over sized gains) if there is some probablity of failure.
Just my two bits
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"Investing is simple, but not easy." - Warren Buffet
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Ajith
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Joined: 06/Aug/2006
Location: India
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Posted: 06/Mar/2008 at 4:48pm |
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Even if Sensex falls 10 percent,the fall will be narrow and some stocks and sectors will outperform hereon.
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Ajith
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Musketeer
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Joined: 12/Feb/2008
Location: India
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Posts: 310
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Posted: 06/Mar/2008 at 4:50pm |
That was very well put. Full of deep insight. 
ThinkDifferent: This is a time to put in investible cash you may be having or realigning your portfolio to choose the best horses (though there is never a wrong time for this). But this is not a time to withdraw cash from the market, atleast in my view.
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Be fearful when others are greedy. Be greedy when others are fearful.
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BubbleVision
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Joined: 05/Aug/2006
Location: India
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Posts: 3142
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Posted: 06/Mar/2008 at 4:56pm |
Originally posted by basant
Didn't someone say that trying to catch the bottom gets you a handful of sh*t!!!
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Yra Harris, Plexis Asset Management, Chicago IL
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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basant
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Posted: 06/Mar/2008 at 4:59pm |
Originally posted by ThinkDifferent
Basant-Sir,
This leads us to the most important question of all. Is it a good time to leverage?
I think You have said in other threads that one can leverage during some special circumstances. Is this one such special situation where one can take a personal loan to buy shares?
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I am not averse to leverage provided it is not in the F&O market because then your broker does not make you buy and sell for his own vested interest. If you are buying on a personal loan ensure that the loan component is not more then 20% of the total equity. For example if you have Rs 80 take Rs 20 and make it upto Rs 100 so Rs 20 is 20% of the loan amount. That will help you survive from a bad day.
If you are working and have aregular flow of income you could leverage and pay off your investment in 24-36 months! When you can have your car on installment why not your investment provided you can stay solvent for the entire length of the loan tenure.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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hkumar
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Joined: 15/Jan/2007
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Posted: 06/Mar/2008 at 5:03pm |
Basant ji, excellent analysis!!
I do agree that long term market is in bullish trend but does catching a falling knife make sense? Isn’t it better to wait and start investing when there is some light at the end of tunnel?
Given the US recession a distinct possibility, banks started disclosing the exposures and figures of GDP growth getting revised downward… I feel to sit on cash for some more time and start investing when things start looking little bright.
I do remember before the start of this bull-run many blue chip companies were available at throw away prices and there were no buyers and SENSEX was languishing around 2800
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smartcat
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Location: India
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Posted: 06/Mar/2008 at 5:06pm |
| When you can have your car on installment why not your investment |
That's an interesting quote.
Can I write off my interest costs against short term capital gains?
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hkumar
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Posted: 06/Mar/2008 at 5:11pm |
Originally posted by smartcat
| When you can have your car on installment why not your investment |
That's an interesting quote.
Can I write off my interest costs against short term capital gains? |
No, to do that you need to show the gains as business gains.
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