Stocks for the long and short term portfolio
- Thread starter jamit_05
- Start date
@Mr.G you are very well disciplined investor I must say. I myself have my 80% invested in alembic pharma, and rest I use to trade, I just made 2 trades in options in last 3 months, first one was going bulling before infosys result and second was was joining down trend in ranbaxy before its result on 7th aug, made about 500% ROI average on last one, but speculation can never win, after all we are graham's and dodds fan here..
by the way, I was looking at IT companies's like techm their balance sheet is getting weaker quarter after quarter.. my question is.. Are we looking at a small bust in IT sector as it is highly over Bought sector???
by the way, I was looking at IT companies's like techm their balance sheet is getting weaker quarter after quarter.. my question is.. Are we looking at a small bust in IT sector as it is highly over Bought sector???
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IT are typically pegged with R/$ relationship. As long as rupee is falling then IT will have increased profits. IT has been the highest performing sector after FMCG so the momentum will carry on, Real skeletons will come out after rupee stabilizes. Mutual funds who want to be short on rupee are opting for service exporting firms.
In one previous post we saw how some sectors are down and out: Metal, PSU bank, PSE, Mining, Sugar. Even Mid and Small Caps, but it is a very risky job to pick companies.
Only these sectors will provide opportunities for investment. Not the well performing ones. If you feel you should have TCS and HuL in your portfolio then you should have planned for it pre-2008/9... now is not the time.
Let me revise a real life example to put things in correct perspective.
Folks who invested in HuL, which has always been a top company, in highs of 1999 did not earn a penny till as late as 2010. If you add inflation, then only 2012 would have broke them even! It is really surprising.
Therefore, to be successful as an investor its most important to have:
1) A smart purchase price and
2) A company that will survive the decades.
3) Intelligent diversification.
Only these sectors will provide opportunities for investment. Not the well performing ones. If you feel you should have TCS and HuL in your portfolio then you should have planned for it pre-2008/9... now is not the time.
Let me revise a real life example to put things in correct perspective.
Folks who invested in HuL, which has always been a top company, in highs of 1999 did not earn a penny till as late as 2010. If you add inflation, then only 2012 would have broke them even! It is really surprising.
Therefore, to be successful as an investor its most important to have:
1) A smart purchase price and
2) A company that will survive the decades.
3) Intelligent diversification.
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In this month of August, Bhel's Open was 158 and CMP is 106;
That is an enormous fall of 50% !! If NSE continues to slide, what stops Bhel from falling another 30 to 50%... noticeable nothing!
The only support of any strength is seen not before 2004 low of 37.50!
Don't believe me.... live to see it!
That is an enormous fall of 50% !! If NSE continues to slide, what stops Bhel from falling another 30 to 50%... noticeable nothing!
The only support of any strength is seen not before 2004 low of 37.50!
Don't believe me.... live to see it!
Consider two groups:
Group A: Current underperformers:
Banking: BoB, PnB, Sbin, Union Bank. (Yes, Axis)
Capgoods: Bhel, LT, Siemens, praj
Metals: Nalco, Sail,
Misc: SCI, EiL, HindCopper, maha seam, IHCL, NMDC, PTC, Ashok Leyland.
Group B: STocks of Pharma, FMCG and IT sectors.
Within a couple of years, or five, down the line, Group A will have stabilized. Their share prices will be in line with future growths. At that time, B will start looking expensive to the big pockets and they will see opportunity in Group A. Then sector rotation will start.
Whether they do well or not, Group B companies will be dumped (with varying intensity) causing the price to correct. This heaps of cash will be used to buy stocks of Group A, which are now cheap and little more promising. Causing them to zoom up to trade at a premium over their intrinsic values and in expectation of good future. Maharatnas will be applauded by the incumbent government as the ministers will derive footage.
Then we'd wish we had most of the Group A companies. But, if you are judicious now, this wish can become reality!
PS: As of now, I have almost completely removed stocks of Group B from my charting software. Will not buy anything expensive.
Group A: Current underperformers:
Banking: BoB, PnB, Sbin, Union Bank. (Yes, Axis)
Capgoods: Bhel, LT, Siemens, praj
Metals: Nalco, Sail,
Misc: SCI, EiL, HindCopper, maha seam, IHCL, NMDC, PTC, Ashok Leyland.
Group B: STocks of Pharma, FMCG and IT sectors.
Within a couple of years, or five, down the line, Group A will have stabilized. Their share prices will be in line with future growths. At that time, B will start looking expensive to the big pockets and they will see opportunity in Group A. Then sector rotation will start.
Whether they do well or not, Group B companies will be dumped (with varying intensity) causing the price to correct. This heaps of cash will be used to buy stocks of Group A, which are now cheap and little more promising. Causing them to zoom up to trade at a premium over their intrinsic values and in expectation of good future. Maharatnas will be applauded by the incumbent government as the ministers will derive footage.
Then we'd wish we had most of the Group A companies. But, if you are judicious now, this wish can become reality!
PS: As of now, I have almost completely removed stocks of Group B from my charting software. Will not buy anything expensive.
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