For anyone who thinks that, after this phase of correction, valuations have become cheap, think again. They haven't, either on a relative or absolute basis. In this scenario, it is important to manage risks. There are two kinds of risks in the markets. First, the overall market or asset-class risk. The second is individual risk. The first is not in anyone’s control. It can hit the market for any number of reasons, emanating from any corner of the globe. Individual risk is about the stock you buy. To reduce risk, you need to look at many things, especially while making long-term investing decisions. These are trends in the industry, financials of the company, and many others. But the biggest is the one big edge that a company has. It could be capital, it could be a monopoly-duopoly position. It could be anything. But there has to be that edge.
