Stocks for the long and short term portfolio

[jamit_05]

One Blue Chip is at long term buy levels. It was right in the open.

INFOSYS TECH

Reason:

CMP is Rs.2250, a 0.50 Fib Ret

This may not be the absolute bottom (but could very well be) for the decade. Price may go further down to 1920 (0.618 Fib) and absolute worst case 1500 (0.786).

So on the downside we have

2200-1900 = Rs.300;
2200-1500 = Rs.700;

One could, for the sake of simpler analysis, average it and assume that Rs.500 is the max down side left, i.e. around 23%. This is agreeable.

Hence, I believe, starting to SIP in Infy is a good idea. From here on, it will beat the FD rates in the longer run.

 

[Einstein]

Your INfy call is based on technical analysis or fundamental analysis??

 

[Einstein]

Aur master kaisa hai?? Appltd up 30% since my call, Goldman Sachs buying Den networking , seems like fundamental analysis really works.. many times better then technical analysis.

 

[Einstein]

Are you on skype??

 

[jamit_05]

<...............>

 

[jamit_05]

There are two ways to achieve long lasting success as an investor.

The first route is for pros. They know every detail about the company, its management, long term prospects, financial statements and the works. After being 100% convinced they allocate 10%. Warren Buffet and his likes of Value Investors walk this path. They often invest into the company in the early stages, before the junta.

The second route is for the less seasoned investors. Top companies from various sectors are selected. Since, they are always pricey one has no option but to wait for a killer price which comes once or twice in five years; in a melt down.

 

[Einstein]

in contrast with statement 2:

Report to warren:

Reporter: why did you bought heinz with 10 billion$?
warren: we bought it because its the business we like and the price we very much like.

 

[jamit_05]

in contract with statement 2:

Report to warren:

Reporter: why did you bought heinz with 10 billion$?
warren: we bought it because its the business we like and the price we very much like.

He also bought Wells Fargo bank recently. It is an old and established bank. But, it was trading very cheap.

So, WB looks out for both, buying companies early when they are cheap or companies with good management but are currently trading cheap.

 

[jamit_05]

Tata Steel is performing poorly, back to sub 300 levels. It is, along with Hindalco, amongst the first to fall when index collapses.

Be away from these sectors for atleast another 3 years:

1. Metals
2. Capital Goods
3. Shipping
4. Infra
5. Construction

But, when you get a super killer price, then do buy... but only the leaders in these sectors. There is a very significant reason for it.

 

[jamit_05]

Further proof:

The Image is from Equitymaster.com

The Metals sector tops the list of biggest losers in a week.

Hence, if Tata Steel must be bought wait for killer levels... wait for months/years. Buy only if you get a super safe support, which in my opinion is the low of 2008. Several, underperforming, but robust, businesses have reached that level, viz Bhel, Sail, SCI then why not Tata Steel (and EiL)?