Dronamraju Ravi Prakash

So the market trended down over the past few months. Why wasn't that surprising? There was way too much optimism about growth prospects. I mean, companies were doing well, and business is strong, but outlook has about business has ignored some of the real events that were happening around the world

The rally can be tracked back to Oct 02, with an initial leg bouncing off the lows under 1200 (Nasdaq) to over 1400+ in span of a quarter. Market took a breather from that 20%+growth and consolidated till March 03. The 2nd bull run started then, to culminate with nasdaq ending at 2100+ which is roughly 50% gain in 10 months. The stocks were way ahead of themselves and the optimism was unbounded.

There was good reason for that optimism, however, the realities in Iraq brought us back to the ground. I believe that the cloud of iraq will get lifted from the market over the next 2-3 months (end of august) and this -coupled with much needed breather in the run up - makes for a nice summer rally starting early july and into october.

Given that, what am i going to do? I am moving all my cash positions into stocks and going long on stocks. I might still consider few short positions, but my predisposition is to go long. I am going to invest into

• tech infrastructure plays with 2 year horizon
  
• Stocks that take advantage of secular search trend
  
• Some dividend paying stocks - YES, including financial stocks.
  
• Some (small) bets on long term technology trends.
  

I'll come back with exact stock picks