The Reflections of the past…..

The history is to visit the past to plan for the future with the presents scenarios. The stock markets provide ample of evidence to correlate with the past experiences. The end of the Bull market can be gauged by the exuberant rise in the small cap stocks that are known to no body. The reverse is the case for the end of the bear market when the well known most trusted firm’s bankrupt and the HNIs and the wise will grab the opportunity to invest for long term. Now the time is……
Uncertainty is Certain… 25-12-2007

The stock valuations are most vulnerable by their nature to the minor and major issues and to local and international issues even if they are not of much importance on the face of influence a lot in the minds of investors cause anxiety fluctuate in price irrespective of the percentage of concern. We can easily say, “the uncertainty is certain” at the bourses each time and every time. Those who fear about uncertainty can search their souls in peace, as nothing is certain.

As expected in my earlier write up the market bounced back on bull track in 4 trading sessions.(………if the Nifty to close above 5935 with in 3 trading sessions. At the immediate level the Nifty shall not close below 5670 level to continue the bull run…….. The markets likely to take help from the tech stocks, FMGC and from the Pharma).

Now the challenge at the Nifty level is to stay above 5778-71 to register a new high and above 6400 level by the end of first week of Feb-2008. The run up in the prices of power and infra will take a back seat and the service sectors and hotels will enjoy the support of bulls along with FMGC & retail move. The gas transportation and the network is the emerging sector. I have been suggesting holding in Fertliser stocks and the next big bet on banks with insurance exposure. These sectors will explode maximum followed by oil exploration and allied services.

No longer immune…….

The Indian markets are resilient to the external pressures of equity fall as the markets see good future but the immediate and short-term pressures cann’t be ruled out. In my ealier write up dated: 29/10/2007, clearly mentioned the possible up side be capped at 6290.

It can’t be stretched further….

…..I foresee the Bull run can become a long consolidation period- more than 6-9 months with a range of 5250-6290 at Nifty level.
The markets are likely to see more down ward action than upward momentum. The rise and fall ratio could be of 1:3 from next week onwards until Aug-Sep-2008. Incase economy could face the challenges for next 6 months than the upward journey in the stocks resume. Indian stocks revaluation based on the broad based economy and growth prospects is over and the real test is that the companies have to perform given the opportunities, then the markets. So is US………

The markets are fighting for their survival as the Bull Run took a beating at the bourses. The markets will take considerable time to resume their upward move. (Pls.read my earlier write ups.---the range suggested at 5250-6290 but the high touched at 6347). The game plans of the operators are very clear that they took the Sub-prime issue for more than 6-months so that the retail investors forget. I warned that the sub-prime issue is much bigger than what they pronouncing.

Now the long period of consolidation is good opportunity to traders as they can get in and get out at every 12-15% rise and fall. The earnings will be good to the Indian industry as the consumer demand and the economic growth continue to flourish. The markets likely to test the bottom at 5192-5226 at the worst scenario but this will happen only if the Nifty fails to cross 5935 before the end of Jan-FO series.

The markets likely to get support at 5670 level as first support and if trades below that level then the support at 5445-15 level at the October-07 level. So long the Reliance stays above 2630-50 level, ICICI stays above 1135-29 level and the ONDC stays above 1090-1110, SBI stays above 2020 and the Bharti stays above 810 level the markets enjoy the bulls support. This correction is a measure to MFs & FIIs to save themselves from the Mid-cap trap happened at 2005.

The Fittest will….

The trouble was there in the market when the markets crossed 6300 at Nifty level and the supports became weak but it survived on the euphoria of Mid and small cap run-up. I personally warned in my write up titled..(Y can’t it be…………….Dt.18-11-2007……. I personally feel that the prices were sky rocketing with thin edge time to participate in those sharp moves is a clear sign of distribution at higher levels.
The retail investor will now about the rise in the scrip at the end of the day, after the next day the participation comes above 20% rise. To conclude the view, these stocks likely to hit the lower circuits or steep fall occur after three to five trading sessions of Bull Run. Be cautious……………………).

The situation could not have this much worse but the deep write down mess in the US financial sector gave an opportunity to correct the steep valuations at the home. So the conclusion is as simple as that “Never buy beyond a point… the point can be identified by the age old, ever green safe investment method—P/E ratio”.

So never blame the market or the seller who made you to buy. It is a simple marketing strategy. While some one out for shopping shall understand his/her home needs rather than blaming marketing people. The emotions at stock market will drain the purse and fill the heart with pain.

Distribute and eliminate…………..21-11-2007

Who will buy at higher levels is all ways the question asked by many and the doubt can be answered only when some body experiences the taste of buying at the top and selling at the panic bottom.
“Don’t be CRAZY to chase…”, “be cautious…..,” the phrases often used and shout… buy buy buying—happening every where……create a confusion in the minds of investors and make them to believe every thing is rosy and beautiful. This is a classical effort to prepare the retail small investors to become scapegoats.

In my earlier write up cautioned the readers to think about the happenings at the bourses? The speeds at which things are happening are very new to Indian investors and are losing time, opportunity and money in the process. The game plans are designed in such a manner to eliminate the retail investor incase somebody holding good stocks at fair prices.

“The steep falls and steep rises give little time to think.”— “Stock Market” is a mind game and every step of investment shall go after through a research, understanding the business and the timing of pricing the investment.
At the end of the day “Minting Money” in the “Stock Market” comes by “Buy Low- Sell High” but not by buying cheap………………

Gross & wild violation…..22-11-2007

Any body who live with technicals can contribute this fall is steep and wild in violating the supports. Any way the fact is the bottom is lost. The hope totally depended on the reliance, ONGC and SBI. They are very strong even at this level of correction. The bulls have the last opportunity to believe the market is a Bull market until it stays above 5175-80 levels. The markets can fluctuate with a wide range of spread for a greater consolidation as the prices have reached relatively high level.
Then the hope lies a head so long the RIL stays above 2580 at immediate support level and can even touch 2440-50 level. The ONGC got the support at 1090 and even can touch 1010-20 level. The big banking leader can touch 2020-2030 and even touch 1910-1900.
So wait and see what will happen at global level and at the local level. The ray of hope lies with the support from local institutions and the deep-pocketed HNIs who are waiting for long time when the FIIs are at buying spree after the rate cut at US.

Y can’t it be…………….18-11-2007

The story is contrary to the current happenings at the bourses. The positive side shall go this way….
In my earlier write up I clearly mention to hold positions in fertilizer stocks for decent gains. Now they doubled from the prices recommended to buy & hold. In the same manner I wrote about the investments of FIIs in our markets. They first invested huge amounts in the Reliance group. They are familiar with the reliance group growth story than the Indian growth story. Now they are spreading their investments to other sectors with different groups. The large caps are rather fully saturated at the price level and left with little scope for further appreciation. So the MFs, FIIs and the DIIs are left with no option but to explore new opportunities with emerging companies though they are small to medium in size at this point in time. The flare up in prices is due to the mismatch in their size and the liquid cash chasing the stock.
The negative side shall go this way….
The small cap and the medium cap stocks are now in their flare-up run at the bourses, but the investigative approach can show a dark side of manipulations in the game.
The story goes back to the 2005-2006, the FIIs, the MFs and the operators heavily invested in (the early bird catches the fish) the Mid-small cps to capture the instant large gains which turned out a futile effort due to lack of liquidity due to the steep crash when the Sensex was at 12000 range. The investments became dud for long two years with no moves. After a long frustration, now these people captured the up moves with vengeance. I personally feel that the prices were sky rocketing with thin edge time to participate in those sharp moves is a clear sign of distribution at higher levels.
The retail investor will know about the rise in the scrip at the end of the day, after the next day the participation comes above 20% rise. To conclude the view, these stocks likely to hit the lower circuits or steep fall occur after three to five trading sessions of Bull Run. Be cautious……………………

The end of the BULLRUN?.17-12-2007

The markets are taking deep breath to settle for a long leap up move or end of the Bull Run? Is the question at this point?
I see a steep correction like that happened in May 2005 if the Nifty to close above 5935 with in 3 trading sessions. At the immediate level the Nifty shall not close below 5670 level to continue the bull run.
Incase the nifty fails to trade and close above 5885 tomorrow, it is likely that the markets likely to touch 5321-28 level and then markets need strong cues to rejuvenate the bulls.
The big boys of the market are very silent for their own reasons but the time has come that they need to infuse vital medicine to the Bulls to take on Bears. The good support of RIL at 2640-30, SBI has support at 2135-2128, ONGC has support at 1060-70, Bharti at 835-829 level and the ICICI has support at 1085-1090. Incase two or three stocks could stay above 4-5% above those support levels then the markets are for the Bulls.
The markets likely to take help from the tech stocks, FMGC and from the Pharma
With out doubt, the Small cap and Mid-cap run-up story is intact until the Nifty stays above 4865-4935 levels.

The retail investors always caught because of the Price Luring while moving up and Fear of Loss while falling down. The markets always provide enough chance to make money but we tend to be ignorant to catch the opportunity. So it is not the BEST PRICE to buy A STOCK but the RIGHT TIME to buy is very important.

RAKESH STOCKS

A COPY OF RAKESH STOCKS FOR READERS:thanks to BASANT
31.03.08 30.06.08 22.08.08 Rs cr % Cap
Titan industries 4060756 3985756 1245 496 20.55 32 5528
Aptech 13254403 13254403 219 290 12.02 260 1017
Praj Industries 15026664 13376624 171 229 9.47 21 3136
Lupin 2927135 2752135 731 201 8.33 13 6014
Crisil 550000 550000 3591 198 8.18 23 2601
Nagarjuna Const. 12450000 15625000 118 184 7.64 17 2707
Bilcare 2025000 2025000 675 137 5.66 18 1161
Punj lloyd 5040000 5040000 270 136 5.64 29 8172
Karur Vysya Bank 2569073 2494073 335 84 3.46 10 1806
Pantaloon Retail 2330895 2330895 342 80 3.30 48 5446
Geojit 18000000 18000000 42 76 3.13 21 876
Bhushan Steel 829900 829000 850 70 2.92 8 3600
Prime Focus 882500 882500 418 37 1.53 20 531
Provogue 480000 380000 716 27 1.13 60 1624
Agrotech Foods 1703259 1703259 132 22 0.93 20 321
Autoline Industries 160389 1211622 180 22 0.90 9 220
Viceroy Hotels 4250000 4250000 51 22 0.90 33 216
Infomedia 1506062 1506062 142 21 0.89 - 281
Geometric Soft 2735000 3035000 57 17 0.72 13 351
ChampagneIndage 0 438650 381 17 0.69 15 582
Zen technologies 450000 450000 160 7 0.30 11 130
ION Exchange 500000 500000 141 7 0.29 19 178
MidDay Multimedia 2250000 2250000 25 6 0.23 - 133
Kajaria Ceramics 1502642 1502642 33 5 0.21 16 250
JB Chemicals 1081650 1081650 43 5 0.19 6 364
Alphageo 125000 125000 363 5 0.19 8 185
Garware Wall Rope 500000 500000 82 4 0.17 7.6 192
Dwarikesh Sugars 450000 450000 85 4 0.16 - 140
MRO Tek 570834 570834 54 3 0.13 6.5 102
Rishi Lazer 380000 380000 63 2 0.10 11 50
Vadilal Industries 200000 200000 46 1 0.04 9 32

TOTAL VALUE 2414


Colors in blue represent stocks where holdings have gone up and in red represent stocks where holdings have gone down.

• One of the smartest investors in the country believes in the benefits of portfolio concentration. His top 5 holdings account for 57.719% of his portfolio and his top 10 holdings account for almost 83.03% of his portfolio.
• The recent stock market crash this portfolio has seen a notional loss of around 40%. From the January highs
• This portfolio has the latest market cap and the Price to earnings ratio as sourced from money control. The average Price Earnings ratio adjusted for the companies that have no earnings is around 27 times! But most of these smaller capitalized companies in sectors that are scalable.
• The underlying theme in the portfolio remains domestic consumption (Titan and Pantaloon,), Infrastructure (Nagarjuna Construction and Punj Lloyd) , pharma (Lupin and Bil Care) and financial Services (Crisil and Karur Vysya Bank.)
• It is hard to find a cyclical or commodity stock in his portfolio.
• Unlike the general investor none of these stocks are large caps in the true sense of the definition. Of Course he could be holding future positions in large caps but the point that I am trying to make is money is made in small and mid caps only. The notional losses that an investor can suffer are also the highest in these stocks. It is very important for an investor not to convert these notional losses in actual losses by selling the shares in despair.
• Most of these stocks are being held for over 4 years. Companies like Titan, Pantaloon Retail fall in that category. Others like Crisil are being held for as long as 10 years. – Clearly Time and not timing is the key to these markets.
• Almost all these companies are looking at a huge external scale of opportunity whether it is a Titan or a Pantaloon a Nagarjuna Construction or Lupin the sheer size of the addressable market is humongous. – Morale of the story “See the Bigger Picture”.
• We do cover companies with huge scale of opportunity TheEquityDesk Report card June 2008 section.
• These shares are held by Rakesh and his wife Rekha Jhunjhunwala and form a part of his disclosed portfolio. He could be holding more shares through companies, trusts, proprietary accounts which are not in the public domain.
• To know more about investing legends see the section World's greatest Investors


Edited by basant - 09/Sep/2008 at 1:41pm