The 4 key pressure points to watch for are as follows:
2) Commodity prices mainly Oil
3) Deleveraging of the world economy
4) Emerging market currency depreciation
The 8 learning and inferences from the past corrections are as follows:
1. All markets are highly correlated when the market falls.
2. It's human beings who trade in shares. So fear and greed drive the market much beyond fundamentals.
3. The correction is not over. It will be deep and painful. It will test our conviction.
4. Emerging market currencies will keep correcting. Rupee may see sharp correction and move close towards 69 within a few months’ time.
5. Reduce leverage; there may be major margin calls in Indian equity market.
6. Down one year someone will say we should have bought those good stocks when it corrects much beyond its fundamental value.
7. Everyone is a great stock investor when all shares goes up my every day. We have to control our emotions. Overcome greed and panic to become a successful long term investor.
8. The world will have to deleverage and how it does that will determine the outcome of this episode.