Glencore is not Lehman Bros, but retail folks must stay away- no buying opportunity is this

Crash in commodity giant Glencore’s  share price has made people wonder whether it is a Lehman Brothers moment.  Do not think so. Investors need to hold their nerves, but stay off completely from buying even if the experts tell you about the so-called buying opportunities. But yes, Glencore is a classic case of over –leveraging your resources and trying to be “over smart” in the trading arena.  

Everybody thought Glencore had some of the most sophisticated trading desks and could go on excess borrowing without making a mistake. The Anglo-Swiss resource firm thought it was a trend – setter, which it was not.

In case you, as retail investors,  have just entered the market a day or two ago and your stop loss has been breached, just get out of the market and relax; otherwise the losses could be much bigger.

In the market anything can happen. Even if the markets turn for better, it is not going to be a consistent and stable trend, at least for now. I can bet on that.  

For retail folks, this is time to be sitting on a cash which may be parked on short tenure fixed deposits    with banks even if RBI cuts rates.

These financial honchos of the world  must listen to traditional Indian Marwaris who will never borrow beyond a point even if it means missing an opportunity. The trouble is that in the financial world , everybody , including the most sophisticated  ones gets carried away when going is good. Bull run brings in more bulls without caring for the bears who can then bring in a devastation.

Why did I say, Glencore would not be Lehman Bros? It would not lead to any major bank collapse. Plus, the 2008 crisis came on the back of a good run. Now, we are in the bad run, in any case. So, it would be one more big hit that would certainly delay the recovery.