2017 was a year of extraordinary returns. 2018 is a year of staying extraordinarily cautious. Does this mean that you need to stay away from the market and wait patiently for the 2019 Elections Results outcome? Preferably not.
2017 will be remembered as a year when most of us had boarded the Small & Midcap train. Why? To travel the runway as far as possible with a fire of sentiments and emotions. Ignoring the fundamentals, I had never even bothered to analyze the business prospects of a company. Neither its corporate structure nor the governance model. Not even the cash flows and debt levels, let alone the credentials of its promoters.
For the initial 5-6 years, Chinese Bamboo Grass doesn’t grow an inch. It requires a lot of nurture, care, water, and soil fertility to grow slowly and expand within the soil. The visible signs of its growth are not noticeable in those initial 5-6 years.
Years of its inactivity scare us and test our patience level. And then, the growth level it achieves in the next 5-6 weeks, is phenomenal. Our tolerance gets rewarded when it grows by 70-80 feet in just 5-6 weeks.
Hard to observe in the short-term. Difficult to ignore in the long-term.