Most of the wealth in market is made using contra (contrarian) calls. When everybody is buying, wise people sell. When markets are in deep trouble and everybody is selling, these wise businessmen buy. Why? Because when everybody is buying, markets become overvalued and all products irrespective of quality, gets higher valuation. That’s the best time to sell your shares (if you have), and book profits. Same thing applies when everyone in the market is selling. This eliminates the weak firms from the market and only fittest survive this storm. You have the golden opportunity to buy the best quality business at a discounted price. That’s how this game is played in the markets for centuries and all seasoned investors swear to this rule. This rule applies in all markets.
Take the case of businesses in post-corona world. Before corona, Food industry was in boom. Everybody was opening a restaurant thinking it to be a money-making machine. They believed it was a goldmine, so everybody invested. Many of them invested in poor quality brands offering little or no unique business potential. These investors are stuck today. They don’t know how to move further. If you buy shares when Nifty is at all time high, and then there is a correction in market, this is what happens to you. You feel stuck and miserable.
Right time to invest in businesses is now. Especially in food industry, because the market is in trouble. This is an opportunity to identify the fittest players. This is the time when you can get quality assets at discounted price. If you get into this industry now, you will reap the benefits with both hands when market becomes normal again. And market will become normal again, because that’s how the markets have behaves since centuries. Think again, contra view makes fantastic profits, for all industries, for all wealthy families. When middle class people follow herd mentality and get stuck, wealthy businessmen laugh all the way to Bank.