Hi guys,
The stock market has fallen significantly and it is time to review
them.
First, let me start on macro level. The economy is not doing too good.
As I had been commenting in my previous posts, macro-economic factors
(domestic as well as global) have come into play. There is a
significant slowdown in the economy and according to me it will stay
so for next couple of years. The global economy is in a turmoil. US
financial institutions are falling like nine-pins. I think next in
line are European banks. Good news is that India is relatively better
off. The global turmoil is going to affect a few industries like IT,
Real Estate, Textiles, etc. Domestic growth stories are far less
impacted.
Moot question is what does one do in these times as far as investing
goes. Today, the best option is cash. Cash is King. Have some
liquidity at bay. The best opportunities to invest are in these times
of turmoil. Though index is at around 12.5 k level, lot of stocks are
available at valuations of 6000 to 8000 sensex level. If your
investment horizon is long (ideally 5+ years), you can start investing
in a gradual manner. Start by investing 5% of total to be invested and
invest another 5% at every 300 point sensex fall.
If one has slightly higher risk appetite, one can invest in mid-caps
and small-caps. If your risk-appetite is low, invest in large caps.
Large-cap investment ideas : RIL (below 1700), L&T (below 2000), NTPC
(below 150), BHEL (below 1200), Hindalco (at CMP and at all falls),
RCom (below 300), Bharti (below 650), Power Grid (below 70), Tata
Steel (below 400), etc.
Mid-cap and small caps : ICSA, JSW Steel, Madhucon, Man Industries,
Assam Company, Allahabad bank, Chambal Fertilizers, Great Offsore
(around 400), Gujarat Apollo, Guj NRE Coke, HEG, Graphite India, Hind
Dorr, Manugraph, Natco Pharma, Patel Engg, Tantia Construction,
Videocon Ind, Godawari Power, .
High-risk : Unitech (below 100), HDIL, DLF. These are high-risk
stocks. May fall more rapidly too. Buy only in small quantities.
Notes :
1 All stocks are LT buys. Please be prepared to invest for min
2-3
years. Short-term volatility is a given. Don't panic.
2 I have a fundamental analysis on all these stocks and am
invested
in most and intend to buy the ones not in my portfolio.
3 Please don't be leveraged in the market. Buy stocks with funds
you
won't need for atleast 5 years.
4 Please do not buy all quantity at one go. Buy in staggered
manner
and with every fall.
5 Please have conviction in your buying. If you have any inputs
on
these please pass it on.
6 Please do your own research on the stocks before buying.
7 Golden rule : Buy when veryone is selling, sell when everyone
is
buying.
8 Never be married to a stock. Any stock giving a return of 25%+
in
a short time is a good candidate for a exit or partial profit-booking.
Best of luck,
Jiten Parmar
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