Stocks had a wild run for a while now. Traders and investors are overly optimistic again and this tells me that it's time to a think about a little contrarian approach. While the liquidity and credit crunch is over there are some fundamental issues in the market still exists

1. Real Estate Bubble: Real estate stocks are a big component of major indices inluding nifty and sensex. Real estate in major Indian cities like Mumbai have already passed some areas of New york and Hong kong. Is that kind of prices really sustainable. Thing could have collapsed 1 year ago , if govt would not have provided support.

2. Inflation : Food inflation is ruling high and it's being neglected. While short term liquidity strength may pump the stocks, over valued stocks should be handled with caution at this time.

In no way I am stating that there are no opportunities in the market but one with medium to long term perspective should be cautious and bring down expectations. Growth of 20% in p/e is not sustainable year over year. Be very stock specific and avoid over valued sectors. Keep cash ready for another opportunity.