Nifty at 4300 how much more? Is it an end to the bear market?

Hey all

After a long time I am posting something about stock markets. The reason is everyone was bearish and no one was ready to listen to ne thing negative so I stopped posting. And thats 100% true. Now I am seeing people coming back (especially my friends who were trading aggressively in the last bull run) and asking me about their holdings and talking about stock markets especially after the 2 upper circuits on back of election results.

Just before few weeks most of the analyst described every rally as a bear market rally. No one was expecting the NIFTY to cross 3800 levels. Everyone seemed to be bearish on market. Everyone was backing their views by talking about bad economic conditions, negative global cues blah blah.. Now with the election results things seem to have changed totally. People are no longer talking about global cues, economic condition and it seems that bulls have returned into business. Now suddenly India seems to have decoupled from global markets. and with the same govt coming into power people have again started talking about 8% GDP and so on.

What has changed in these few days that people have forgotten every thing and are just buying blindly? Brokerages are talking about 20k levels on sensex FII’s suddenly overweight on India and you will see every thing turned Bullish from Bearish. (Especially those who were bearish just 2 weeks back 🙂 This sounds really funny to me but most importantly its very confusing for those who are stuck with their holding which they bought when markets was @ 18k-20k and are thinking to hold or sell.

According to me the current movement in the market is because of over excitement and is overdone. People are putting in money blindly since there is a left out feeling. Every thing is moving up.. Personally I don’t feel that this rally should sustain. People already holding stocks should book out profits and stay with cash. “CASH IS KING” and no one will argue that. Profit booking to my mind is never a bad thing to do. If your investments have doubled book out capital and hold on to the profits. I just noticed that even companies which have posted net loss are moving up 10% – 20% every day. Reminds me of the last leg of the bull rally when each and every single stock was moving.

Ne ways having said that I think one must book profits and we could see nifty coming back to 3800 levels or even less going forward. And as and when economic conditions improve one should again start investing or buy stocks which are available at dirt cheap price going forward.

Though I cannot term this move as a bear market rally or a bull market but I am sure about one thing that the valuations doesn’t seem to be cheap any more and economic environment has not changed. So profit booking will be the ideal strategy.

Hope you have liked this post. If you have any questions pls post a comment and I shall reply.


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Satyam Fraud Everyone shocked, Bigger question What about other indian companies?

Well its not over yet..Now by the time im  posting it here everyone knows that satyam has committed a fraud as confessed by Ramalinga Raju. But the problem here now is that

What about the IT sector as a whole?

What about the investors confidence of people on Indian companies?

Apart from that big question which arise from the confession that if they actually dont have any cash on the balancesheet then how could they have bailed out Mytas Infra. Thats the main stage by which this satyam saga was all started. and people seemed to have forgotten that. If thats true then it means that Mytas infra knew evey thing about satyams balance sheet fraud. So now what about the creditablity of Mytas Infra.??

Another thing is if there was no cash on the balance sheet how could satyam board actually declared that they would have a buy back?

There are so many other question arising out here. Also the letter given to sebi

Another question which arise is that as mentioned that they had only 3% margins. Now if a company like Satyam has 3% margins then how come other IT companies showing 30% margins?

What about the shareholders?

Talking about share holders i think they should just forget the investment made into the counter. Only the fools will even think of averaging out the stock and they will suffer. I still see people asking if they could buy this stock. And I would suggest them not to even think of putting a single rupee in the counter.  If they put any they are surely going to suffer. Dont even think of short selling the counter. Just aviod trading it.

FII holding 46% share in satyam

Now here is one more question should we invest in companies where there is a lot of FII holding? Are their investments reliable? On what basis they make investmenet? How do they research? Simply on what company tells them?

Lot many questions coming in my mind currently. I will keep on posting my views and things that should be watched out for. you can discuss here by posting ur comments on this discussion

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My all time favourites

My aim here is to make all the investors get reasonable returns @ the least possible risk….People might not agree to these views..but I have proved it again and again since past many yrs….
Here is the proof I m just writting about those stocks in which i have traded the most in terms of % turnover and also % returns. I will get you updated all these stocks like @ wat levels one should buy and sell them in order to get the best of it.. Apart from that I will also get u the latest News updates or recent developments of these specific companies..

First of all the list of the ones which i like..In my next post i will tell u the reasons y I like the stocks metntioned below

1) GDL
2) Nitin Fire
3) Zylog System
4) Balrampur Chini
5) Amtek India
6) Rain Calcining
8) Religare
9) Infosys
10) Tata Motors

All the stocks above have given good returns to the investors and traders if they have traded these stocks at proper levels.. This is true with almost all the stocks but these r some which i track regularly..and i continue to like them inspite some of them might have underperformed..but for me they have always outperformed..

So Keep watching this space i will get u updated with the stock details soon and also the research reports if possible. Watch the comment space for each stock to get the latest updates

My Picks for 2008
1) L&T
2) Punj lloyd
3) Reliance Inds
4) Gmr Infra
7) GDL
8) Infosys
9) Godrej Inds
10)Shiv Vani oil

These are the combination of midcaps and largecaps..And i wouldnt hesitate to put equal amount in all the 10 can expect minimum 50% returns frm these stocks in this yr if traded @ proper levels..also watch out for specific news abt the stocks in the latest stocks section..

Keep visiting

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Has the market bottomed out? , Is this the right time to buy? , How much more downside?, Should I invest now or wait?

So many questions , Well and there doesn’t seem to be any answer for it. When things turn bitter it takes every good out of it.

Let me ease you out and help you to go in some direction which I think could be the best option.

Well if you take the above questions into consideration the only thing I can say is that look it as an opportunity and you will win.

Look @ the risk reward ratio. Imagine downside to upside and rethink.

Can market go to 6000? Or there are better chances for it to go to 12,000?

If we see the current levels of 8000 on sensex and assume the levels. Just imagine that you have a max loss of 25% but a profit of 50% and things around 50% is more viable. But what makes me feel so…

Well there are many reasons for it

1) Why a country like India should fall as much as US? Do we deserve to go down the same way as other countries I would say probably not and the reason is simple. In spite being affected due to the recession in world I think that we can withstand the pain in a much better way.

2) Earnings downgrade?

Some times I feel like laughing on such things. Why? Because just few months back when we were at 22,000 no one was even talking about it and now at 8000 people are showing concerns on earnings.

Average growth of companies had been good in range of 40-50% (Avg) for the last 5 years but that doesn’t mean that we should continue to do the same and we will not because we are some where affected by the global slow down and it should reflect on earnings. But even if you take that into consideration still companies in india are growing at an average rate of 30% which is not bad at all. Just see how much stocks have fallen but in that comparison do they deserve to be battered so hard? Is the slow down in earnings so severe? Does this mean that 30% growth is here to stay? Again so many things . now let me put the worst case scenario. Earning could slow down to 20-25% from 40-50% that’s for short term I mean 2-3 quarters. Currently we are in the range or 30-32% but if things gets worse it will come in the range of 25%.

Even if we grow at 25% I don’t think that there is any other country in the world where companies are showing 25% growth. So the positive thing is that we have fallen in line with the global markets but we do not deserve to fall that much.

Now going forward when things stabilize people will again start putting money into the markets. And India would be the best place where people will find it safe to invest money in. The reason Is we have a steady growth.

People talk about GDP growth coming down from 9% to 5-6% now most of the FII expect growth to be in the range of 5-6% but personally I feel that we are going to exceed expectations. It will be more than what FII expect which would be a trigger for our markets to go up.

By the time the numbers come out our markets might already be trading up 30% from the current levels. So 20% more will make it 50% up from the current levels of 8000.

Few other reasons to be bullish about this market

1) Interest rates have peaked out

2) Crude has fallen to $60

3) Inflation is coming under control

4) Dollar appreciation will be under control going forward

So the concerns that seemed to be there few months back are going to be solved in next few months.

This is not the end of the world. Its not that people will keep that money into banks because they don’t even trust banks – looking at what has happened to US banks. (It doesn’t mean that in india the banking system is not good – infact it’s the best amongst all, ofcourse there are few exceptions) but people want more returns so they are going to put money into stock markets.

Now comes other source of high returns or other sources of investments. Lets take real estate into consideration. Almost everyone feels that property rates have peaked out and soon they will see real estate price falling around 30%.

So people are selling of their properties and investing 50% in stock markets and 50% in banks FD.

Now going forward things will stabilize in stock markets as well as real estate market. Lets assume that real estate price have fallen 30%

Take an example of a house which cost me 10 lakhs few months back is now available for 7 lakhs. I en cashed money @ 10 lakhs and kept 50% in FD and 50% in stock markets. i.e 5 lakhs in bank and 5 lakhs in stock markets.

Taking a period of 1 year into consideration. Lets assume that stock market are at 12,000 levels ( and there is no reason y it should not be at those level) your investments made @ 8k sensex for 5 lakhs would be of atleast 6.5 to 7 lakhs and your 10% interest on 5lakhs FD would amount to 50000 Rs. So total amount comes to 6.5 lakhs + 5.5 lakhs = 12 lakhs 20% net profit and the cost of the house you sold would be 7lakhs or less.

Now the choice is depending on market conditions you can keep the 5lakhs FD as it is @ 10% and invest back 7 lakhs in the same house you sold for 10 lakhs few months back.

Or invest 2lakhs of the money that you earned by doing all these transactions in stock markets (tension free as its not your capital)

5 lakhs in FD and buy a smaller house for the 5lakhs that you have. In this way your investments will be diversified and the risk might come down.

So think I just gave you a ray of hope and the things that I feel.

I may not be correct in what I said. But I am just talking something that’s logical in my way.

Hope you enjoyed reading this. And hope that this has helped you to get some direction if you are stuck.


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