Stocks for the long and short term portfolio

[jamit_05]

To justify my Ultra-Bearish tone:

I just finished reading a book called "Panic" by Michael Lewis. In one of the chapters he talks about what happened to Thailand when FIIs exited... what mess they left behind. The currency devalued like crazy. The Gov was helpless.

These sequence of events are replaying in India. I suggest you read that book. Thai Govt. was helpless. It tried all tricks to attract FIIs, bring them back, didn't work. They eventually ended up reining its currency, Thai Baht, by increasing Rates and the economy didn't recover for years.

In late 1990s, India was still cautious and protective therefore FIIs did not enter into India majorly. So its first time for India. But the dominoes have started to fall. And they will fall hard... each and every one of them.

And God forbid with all that hue and cry about Modi. If an unstable govt comes then scenario will get even worse. Nobody will be safe. Not a single company will be left unshaken. Lower circuits will be a common sight.

 

[Einstein]

Hi Jamit-
I have been regularly following your thread. Infact i log in to read mainly your post as I find them very helpful. I have invested heavily in companies like BHEL, Tata Steel, SAIL and it is only after reading your post i have stopped buying more and waiting for them to hit the lows you have predicted. I am waiting for your list. Thanks in advance.

Since Im from steel background, its hard to resist to give my opinion on this. Steel sector is ****ed up pretty bad since 2008 meltdown. high raw material cost and low demand had forced big boys like arcelor and posco to withdraw their plan to setup steel plants in india because they know this is not going to end soon.

+ dollar/rupee price has killed the business of small steel traders like me. cut the story short its not a good time to invest in steel sector. as this scenario can continue for few more years.

 

[jamit_05]

Hi Jamit-
I have been regularly following your thread. Infact i log in to read mainly your post as I find them very helpful. I have invested heavily in companies like BHEL, Tata Steel, SAIL and it is only after reading your post i have stopped buying more and waiting for them to hit the lows you have predicted. I am waiting for your list. Thanks in advance.

What worries me is the adjective "heavily".

If I were in your spot, which is a tricky one to be in, I'd employ a damage-control strategy.

 

[jamit_05]

All metal stocks and mining stocks still have strong downward momentum.
Smaller banks Andhra, Allahabad, have joined them.

 

[jamit_05]

So, the question an investor should ask is:

Is it the time to calculate current valuations and future estimates to arrive at the purchase price? Or should he be concerned, more-so if he is invested in them, about when and how will this Momentum be absorbed.

It is tough to say. My guess: All time lows. Else I'd wait for a consolidation instead of catching a falling knife.

 

[jamit_05]

One argument against my earlier statement of waiting for all time lows in some (most) scrips to make an purchase is: The Govt. won't let it happen.

Sure, that is a smart thing to assume. But, Gov surely doesn't care about all listed scrips in the exchange. It cares about SBI and Ongc, for ex, but not about andhra, alahabad, EiL, SCI because they do not affect the Index, which in-turn affects the national (International) sentiment.

In times of crisis, it is all about sentiment. A country can survive a recession, as it is part of the parcel. But what breaks its back is the "Rush". It is all about that one news that makes everybody rush for the door at the same time. A mad rush which the govt. cannot regulate, which will send all charts crashing down.

It all start with the currency going into a free-fall. It happened to the Baht, to the Won... could happen to the Re.

I did not worry much about the Scams when they came out. But, now I see the picture. It is called "Crony Capitalism".... or the new-agey term for it is "Zomibism": Where the ones "who-can" take for themselves "what-they-can and how-much-they-can" and get in the way of National Growth.

 

[victory]

Hi Jamit,

Any update on Stop Loss and Exit for the stocks you will list would be helpful.

I see that most of your recomended stocks are in downtrend........hope you will not agree "catching a falling knife"

So in this case what would be the entry.........do we have to wait for the consolidation and upmovement with first pull back or do you suggest us to accumulate on downtrend and buy some more if it goes down....

Kindly throw some light on the same. Hope you are working with the list of 57 stocks and diversification of the same.

Would be very helpful if you share the same with all of us. Election around the corner do you suggest us to wait and grab the stock later at much lesser price or do we have to accumulate from now on............

 

[jamit_05]

Hi Jamit,

Any update on Stop Loss and Exit for the stocks you will list would be helpful.

I see that most of your recomended stocks are in downtrend........hope you will not agree "catching a falling knife"

So in this case what would be the entry.........do we have to wait for the consolidation and upmovement with first pull back or do you suggest us to accumulate on downtrend and buy some more if it goes down....

Kindly throw some light on the same. Hope you are working with the list of 57 stocks and diversification of the same.

Would be very helpful if you share the same with all of us.

It is very important to ask questions. You are doing the right thing.

3-Dimensional diversification is wise:

1) Price
2) Time
3) Sectors and stocks

I will start investment process when Nifty touches 2011 lows, before that, investment will be hurried.


You must settle on your objectives for investment. My objectives are to buy stocks which I could hold-on to for at least a decade. So clearly my objectives for investment are long term. Hence, I won't employ Stop Loss and Exits.

In stocks of sector which are weak without doubt like Sugar and Steel, I would like to see consolidation after a fall.. cuz we'd never know where the bottom is.

Sometimes it looks as though Sail, Nalco, SCI and Balarampur Chini will reach Rs.9 ! Purchases of a life-time... buy and forget. Isnt' it?

 

[Option.Trader]

To justify my Ultra-Bearish tone:

I just finished reading a book called "Panic" by Michael Lewis. In one of the chapters he talks about what happened to Thailand when FIIs exited... what mess they left behind. The currency devalued like crazy. The Gov was helpless.

These sequence of events are replaying in India. I suggest you read that book. Thai Govt. was helpless. It tried all tricks to attract FIIs, bring them back, didn't work. They eventually ended up reining its currency, Thai Baht, by increasing Rates and the economy didn't recover for years.

In late 1990s, India was still cautious and protective therefore FIIs did not enter into India majorly. So its first time for India. But the dominoes have started to fall. And they will fall hard... each and every one of them.

And God forbid with all that hue and cry about Modi. If an unstable govt comes then scenario will get even worse. Nobody will be safe. Not a single company will be left unshaken. Lower circuits will be a common sight.

What happened in Thai and other tiger economies was pegging of $. They werre artifically holding up currency by using up their forex to peg it to Thai Baht and then the banks went bust doing this.. hope RBI does not use up its reserves doing this futile exercise... instead concentrate on exports as we will be competitive with a weak rupee.. rest leave to markets.
But about stocks.. there is a philosophy called long only funds who invest in emerging markets.. so these funds dont necessarily liquidate their holdings on a dime... and as India is still a relatively safe bet for them to have exposure in emerging markets, downside will be limited. Which other country even has a projected growth of more than 7% in todays days? But investing in Stocks is altogether another ball game.. you never know the honesty of these companies... instead investing in index funds for the long term should ideally be the mantra... there is more chancec of picking lemons in these markets than hidden gems

 

[victory]

It is very important to ask questions. You are doing the right thing.


3-Dimensional diversification is wise:

1) Price - Since beginner kindly elaborate on Price diversification at later stage
2) Time - same with time
3) Sectors and stocks

I will start investment process when Nifty touches 2011 lows, before that, investment will be hurried.

You must settle on your objectives for investment. My objectives are to buy stocks which I could hold-on to for at least a decade. So clearly my objectives for investment are long term. Hence, I won't employ Stop Loss and Exits.

In stocks of sector which are weak without doubt like Sugar and Steel, I would like to see consolidation after a fall.. cuz we'd never know where the bottom is.

Sometimes it looks as though Sail, Nalco, SCI and Balarampur Chini will reach Rs.9 ! Purchases of a life-time... buy and forget. Isnt' it?

Thanks for the Clarification

1) Price - Since beginner kindly elaborate on Price diversification at later stage
2) Time - same with time

Guess Nifty low was around 4650 - 2011 lows, do we have to wait - morover will Nifty touch that low

Same here can hold stocks for a decade

So we will wait for the consolidation of the stocks in downtrend

Very true - agreed - any recomendation wrt stocks which have touched rock bottom would be helpful for Purchase of a life time - buy and forget.

Your views on KFA @ 3.8/- . Is it a buy or not - as everyone knows the condition of KFA. However, was struck up with the same situation wrt Satyam which was trading @ 8/- . Thought of buying around 5000 shares, however, backed out............now you can see the price.

Your views will be appreciated.........