June 29, 2018

How to survive the Smallcap Crash in 2018 ! @nooreshtech

... the Nifty is just down 5% from the peak of 11171 but the broader market is down 20% or more from the peaks of 2018 but the sentiments have taken a knock as many stocks have fallen a lot from peaks.

Why is a 20-25% drop from the peaks such a sentiment hit ?

1) Some of the worst hit stocks have fallen 50-90% also.

Its not the 50-90% fall but the problem is some companies which are outright frauds never come back to previous prices and there is permanent loss of capital.

I remember recommending Nilkamal , Aarti Inds, NBCC, Supreme Petro etc and seeing a drop of 30-50% in 2012-2013 and a multi-fold rally in coming 1-2 years.

If one can avoid frauds itself is enough. Also if you get one diversification should help you save your portfolio. Have recommended duds like Cebbco, Zicom too but allocations was a savior.

2) 80% of stocks have fallen more than 20% and the median fall is 34%

Read more at http://www.nooreshtech.co.in/2018/06/how-to-survive-the-smallcap-crash-in-2018.html

My take:

- do not invest more than 3%in any stock
- keep min trailing SL of 10% from recent high

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