You need to get in the game! Slowly!!

I AM A BUYER OF THIS MARKET AND READY TO TAKE THE RIDE DOWN TO S&P 1040 WHERE THERE IS A HORIZONTAL SUPPORT. THE RISK REWARD EQUATION LOOKS BETTER THAN IT WAS ON JAN1.

Bullish Argument

• Majority of the companies reported great results and boosted outlook
• Better than expected GDP
• Re-election of Ben Bernanke
• Most importantly, everyone is scared for Greece and Obamanomics!! EU won't let anything happen to Greece

Bearish Argument

• Economy growth will slow down when the stimulus is out the system. I agree with that to some extent but we are not going back to the stone age!!!
• China is tightening lending to control the growth which is out of control at this point. Hitting the commodity stocks hard.
• DC DC DC DC DC... What can I say!!!! Obama needs to understand his game... I think he is not on top of his game after Mass defeat and saying populist things which are creating uncertainty.

In summary, you decide which side you want play. I am playing on the bull side but with lot of discipline hoping that DC will not harm the market further and Greece will be saved by EU.

I have been reasonably successful in minimizing my losses and preserving by just focusing these simple investment strategies which are easy to understand but hard to implement.

1: When big boys (mutual funds/institutions/pension funds etc) fight it out; you either stay with them or stay out.

Lets be honest. As an individual investor we can't move the market. I don't care how fundamentally correct we are in picking the individual stocks. I personally hate shorting the stocks which I fundamentally like, so when the market is going down on huge volumes (Funds selling) I stay on the sidelines and look for opportunities to buy good companies at a cheaper price.

2: Look for companies who announced great results, boosted outlook, and still trading down due to lack of buying or institutional selling pressure

Recently Amazon announced blockbuster results but the stock got hammered. Goldman, Apple, GOOG are all in the same category. Why??? Because these are the most loved stocks and up more than 80% in 2009. People are taking profits and raising cash for next big opportunity of 2010. I think all these companies deserves a look at the range they are trading.

3: Don't be afraid to take losses!!!

This is the single most important thing to remember as an investor. Everyone hates to lose their hard earned money but cash creates opportunity. No one can get all the trades right and the art is to realize a bad trade early, take the losses and re-invest the cash in a better trade. I have just done that during this 5% correction. Flushed out my bad trades and now I have cash to put in much better companies and position for rebound.

Are you nervous about the market?

..I am and here is what I have been doing to protect my gains and outperform S&P.

Here are key themes worth noticing. They are my guiding principles for the strategy:

1: Obama's attack on bankers and their bonuses shows how immature, reactive and populist this president has become. I think the hidden theme here is the confidence in the US banking system and money these banks are going to generate in the coming years. Remember, Obama is planning to tax these banks for next 10 years. So against tide I would buy banks right here if you are a long term investor. I am a buyer of GS, MS, and BAC on dips.

2: One sector that is hot right now is Agriculture. There are two reasons: as the world economy improves the demand for more nutritious food will grow which means more use fertilizers. There will be a shortage of land available for Agriculture due to rising urban and middle class in emerging markets. That means making the most of the available land and using crop rotation techniques to keep the land fertile.. guess what.. you will need fertilizers...I am a buyer of MOS, IPI, Innophos in this space

3: Technology is my favorite sector but it is also the most crowded sector. Everyone is playing the smartphone and mobile Internet boom. It is too risky to play this sector using individual stocks as the valuations are over the roof. There are still some companies out there which are trading at lower multiples and have strong balance sheets and future growth. One such company is Neutral Tandem (TNDM), a small cap with excellent balance sheet and currently trading at 16X forward earnings. This stock has come down from 33 to 19.30 in just 5 months even after producing a great quarter. I think the competitive threats are overblown and I would pull a plug right now... Other investments are: AAPL, CTRP

No time to cover all other sectors.. Here are some names that I am watching: AMED, VTIV in Healthcare, SPWRA in Cleantech, FLR, BIP, CSR in Infrastructure, NEP in energy, RTP, ABX in mining and precious metal.

Happy investing :-)