Investors and Sensex – Subramoney

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I started investing long long ago. All right, so long ago that the Sensex was not born. Also I have no clue why an investor needs to look at the sensex. IN 2007 I sold shares like LnT, Kotak bank, Cholamandalam, Tata Power, and a couple of tech shares. This has NOTHING to do with the index being at 21000. It was purely a feeling that Tata Power could never have a PE of 100. Gimme a break.

I bought back Tata Power, Chola, and Kotak. However, I later exited Kotak bank at a decent profit.

To me investors looking at the Sensex made no sense. Even now, I was sitting on some cash and decided to buy Bhel, Tata Power, Vedanta, Motherson Sumi, and a bunch of Psu shares.

The Index represents a bunch of shares that I may like or not like! Imagine adding up all the PE and arriving at the “market PE”. Honestly, I have not seen anything more stupid. I am sure that the market is currently over-priced, but that did not stop me from buying Bhel, and Tata Power at their life-time lows. It did not stop me from buying JSW, and Vedanta. In the case of Tata Motors, I have not done anything to my position – and I have no clue what to do. Of course, it has no PE to talk about!!

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I also do not like asset allocation beyond a point. I have some money in debt instruments -I guess it is about 10 YEARS household expenses. This is over and above another 10 years expenses in PPF. At my age this is more like “for the rest of my life”. I have current income from training, dividends, my wife has rental income, and thus all the remaining money can go into Equity. Another way of looking at it is to say “the need to take risk has gone away” – so I can go to full debt like a debt mutual fund growth plan. I prefer sticking to equities, as always.

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As a professional trainer, Subra trains a lot of people – corporate employees, promoters, non-finance managers, fund managers, entrepreneurs, life insurance agents, journalists, PR agencies, and anyone who wants to learn. His style is simple – He tells stories of real people, real experiences, and breaks down complicated topics into easy to understand lessons.
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