What if I were to tell you that you can take currency notes worth Rs 1 lakh for just Rs 50,000, today, with just one condition that you can sell those currency notes worth 1 lakh only after 24 months and not before ?
Note: This article is for investors serious about wealth creation. If you don’t look at stocks/equities as an investment option beyond a day, week or month, then don’t read beyond this line.
Ok, let me give you another option. I may offer those same currency notes worth 1 lakh for 40,000, one week or maximum two months down the line, however there’s no guarantee.
It all depends on my state of mind at that point of time.
What would be your reaction?
I believe most of you reading this would first think of me as a complete fool (assume that I am depressed) and secondly almost all of you would capitalize on the opportunity and go ahead and buy currency worth 1 lakh for just 50,000 i.e. a 50% discount.
You would also bet against taking a chance of waiting for 40,000 because that is not a sure shot case and most importantly if you miss out, you will miss out on the 100% gain in 2 years time frame (36% annualized) that is already there on your platter.
At least that’s how I would think and act if given a chance and if someone comes across with the above offer.
Well, I am sure that no one would come up with such an offer, however I am glad that Mr. Market is one such thing which goes through mood swings and time and again comes up with such offers.
At this point of time i.e. @ 4900 on NIFTY, he is offering us a pretty similar offer as above. The market is shouting loud and clear that in case you missed out my 2009 offer, here’s another opportunity for you. I may go down to 4400-4600 i.e. down 10% from current levels, however as always my ultimate fate is to go up because I am following Indian economy which is growing at 7-8% and since I am constituted of some of India’s best run companies, I will grow at 15-18% over the next many years.
Besides, if you are not so sure of my promise, check my history. Be it 1992, 2000, 2006, 2009, I have always lived up to my words of rewarding you more than what I had guaranteed.
Moreover, if you don’t like my offer, I have something still better, i.e., a select few small and mid cap companies that are available at almost 50-60% discount to fair valuations and growing at a scorching pace of 30-35%.
Well, we have outlined the analogy for you.Â Now, it’s up to you to take a decision. Remember, the time is on your side, so you may still take up Mr. Market’s offer in a phase wise manner as long as he is depressed. You never know when he may have his change of heart.