Patience, our friend.

In the stock market, patience usually wins. In the same way, impatience usually loses (although in the momentum phase of the market, it appears that only the impatient win – bu not for long).

Thanks to 24 hour TV, our ability to wait has been reduced. While the patient investor could look forward to handsome gains over a few years, that time frame hs changed so much that gains are expected immediately. We cannot wait for time to do its own thing. We want results. Now!

As an example, reading habits have changed because of the cable TV & internet. People have bcome impatient readers. They have become used to channel surfing or sufring the web, quickly moving from one page/channel to another. people send SMS instead of calling or sending emails.

As a trader, impatience and the need for instant results cause us to make poor quality trades. There is a stock, for example, we can take Hindalco. You have heard experts (who else but  me!) say on TV today that Hindalco is a buy.

You check up your charts and find the share is up almost four percent today. Now what? You tell yourself that the stock will run away so you must enter it quickly. Tomorrow, suppose the share opens one percent lower. You buy quickly since you know this is going up big time.

Much to your horror, the share price keeps on falling, finally ends up 11% lower over a period of three weeks. At that point, you curse the expert, sell off the shares and begin paying attention to the other experts. Now, the share (Hindalco) stops falling, slowly starts rising, then over a period of three months, makes new highs.

Suppose you had the patience to tell yourself: I will buy, but only on a correction. If I do not get a correction, then I will not buy. Would the outcome be different? Your views are welcome.

And now we have 5700

The Nifty crossed 5715 today, a number last seen on January 18, 2008. We are at the current highs after 32 months. This has been quite a journey, from 6355 to 2240, then back to 5715 today, and, of course, who knows about tomorrow?

On CNBC today, I suggested buying 5600 October Puts. This is a game of patience, I said. The intermediate trend for the Nifty is now living on borrowed time.We are in the 14th week, while the maximum has been 15 weeks. A correction, whenever it comes about, will not be a friendly neighbourhood dip.

Traders should do both – ride the upward momentum, and, also buy these puts slowly, bit by bit on rallies.

What about investors? Investors should buy only on corrections. Remember, these dips come two to three times a year, at least.

Finally, find out about the Gold Super Cycle. Click here to read.