tag:blogger.com,1999:blog-360294792024-03-07T15:33:00.804-08:00Struggle to make money from stocksBeen through many crashes in the Indian market (Crash in September 2005, crash in May 2006, crash in Feb-March 2007, the bad crash starting in January 2008, the current 2018 midcap and smallcap downturn). Still looking for the magic touch that will turn my money into the first 10 million. Any tips that I post will typically not be mine, but picked up from somewhere (hopefully with some accuracy), hence have fun if you make money; if you lose, then that is the name of the equity game.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.comBlogger118125tag:blogger.com,1999:blog-36029479.post-53051144733522399832018-06-13T10:19:00.000-07:002018-06-13T10:19:30.115-07:00Indian stock market update - June 13, 2018<div dir="ltr" style="text-align: left;" trbidi="on">
Just a few months back, it seemed that the midcap and smallcap index and individual stocks would scale new highs, and make a lot of money for people in the past. However, October onwards, there was a lot of caution being talked about, since the valuations seemed unreasonable, and some of the small cap Mutual Funds had stopped taking new money from customers since there was a belief that a crash was around the corner, and at these valuations, there was little money to be made. However, the midcaps and smallcaps did go higher and higher, all the way into January. It was the months of January that started seeing the fall of these stocks, with sudden shocks. This continued into the months of February, and the indexes as well individual stocks started falling with a vengeance.<br />
It has always been recommended by market experts that retail investors who buy smallcap and mid-cap stocks should do with a stop loss set, so that profits they have made can be taken out of the system - either this can be done when the investor feels that the stock has gone high enough and wants to do profit taking; or the stock has peaked, and the investor wants to get out when the stock has started falling (this strategy requires the investor to be disciplined in their approach and take action when their strategy calls for it). I am happy that I have managed to execute this strategy in this particular year, in the past, I have been emotional and held onto stocks when they are falling and have lost profit in this way. So, for example, in one stock which went upto Rs. 1400, I had reset my stop losses when the stock went on rising, and when it started falling, I was able to get around Rs. 1200 for a stock which is now at Rs 600. As a result, if there is a turnaround and the stock starts rising, I will have cash in my hands to start making purchasing again as opposed to the past when I would be holding the stock when it starts falling and keep on holding it.<br />
I would strongly recommend investors to make a strategy that they believe that can bring them profit, and then follow that strategy. This is essential to make profit, and there is profit to be made in the Indian stock market.<br />
Right now, the market is in a odd situation, with the stock market Nifty and Sensex still at highs, with the midcaps haven fallen; so a bit dicey whether the midcaps will recover. However, markets follow trends, and one should keep following the trends, and be ready to invest when the trend reverses. </div>
Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-79544955590803064652012-10-02T06:53:00.000-07:002012-10-02T06:53:06.114-07:00India stock market update - October 2, 2012<div dir="ltr" style="text-align: left;" trbidi="on">
The gloom over the past couple of years have suddenly receded in the past couple of weeks. The scam hit Government was also losing the past few state elections, which further cost it more political capital. It would seem like that the political leadership of the Congress finally decided that the cost of not doing something was far more to the future of the Congress than any pressure that the allies would bring to bear on it. The prediction that, other than Mamta Banerjee, all the other allies could be brought in line because of various issues against them and their reluctance to face elections. And so the Government finally brought in reforms to project an improved image, to pick up some political capital, and though Mamta Banerjee went ahead of the expectations of the Congress by withdrawing support rather than just pushing for the resignation of her ministers, the Congress was assured of a majority that would still support them.<br />
The market as expected welcomed the improvement in the air, also because there was no expectation of any such measures over the past many months; the market had come to expect that there would be ongoing policy paralysis and eventual reduction in the rating of the country and companies. The market as such has been seeing an increase in the index values and many shares that have been down-trodden have started climbing up from their yearly lows. However, there is a high amount of risk. The policies of the Government towards reform are not deep, nor are they because of any deep belief, especially since many members of the Congress are fearsome of the public backlash to the reform.<br />
There is an improvement in engineering stocks, because of a belief that the economy will start improving, including in infrastructural, construction and other stocks. So for the short term, some risk can be worth it by investing in these stocks.<br />
Reliance seems to be slowly recovering, although the share has been depressed for quite some time.<br />
There are some other stocks that are worth investing in such as:<br />
West Coast Paper<br />
Weizman Forex<br />
Tata Global Beverages<br />
Godrej Industries<br />
Zenith Fibres<br />
Govind Rubber<br />
<br />
Keep in mind that some of these stocks have already run up in the past few weeks, and there is a risk in buying into the equity market.</div>
Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-15343510177435727822011-06-01T02:55:00.000-07:002011-06-01T02:55:23.259-07:00Some tips for better and safer investing• If the stock falls and you were expecting it to rise, drop it. Don't hold onto a stock just in terms of trying to average out something if you don't have confidence.<br />
• Never trade with money you can't afford to lose. Don't take loans for the purpose of investing in the stock market.<br />
• Always have a plan of action for your trading. People who have a plan and follow it (and modify the plan from time to time depending on the market situation) make more money from the stock market.<br />
• Always follow your plan of action.<br />
• Don't hold on to losing stock. It's termed as catching a falling knife, which can cause more damage to your investment.<br />
• Even if your stock continues to rise, you should still sell in accordance with your plan.<br />
• Don't hold on to winning stock longer than you planned; things can all too easily turn against you. Greed is something that needs to be controlled.<br />
• Set a limit for how much you can afford to lose in a day. Use a stop loss judiciously.<br />
• If you lose your limit, get up and walk away; stop trading. If you continue, you could even lose your shirt.<br />
• Accept that you will lose money sometimes and be prepared.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com7tag:blogger.com,1999:blog-36029479.post-2541230514349009842011-01-13T10:34:00.000-08:002011-01-13T10:34:55.033-08:00India stock market update - 13 Jan 2011It's been some time since I wrote in this blog, and things have changed a lot since then. The overall political environment in the country has taken a deep turn for the worse in the past couple of months, with scams affecting the image of the Government to a great degree, implicating the even honest image of the Prime Minister. Further, the economic and monetary policies seem to be moving in a direction that is not very conducive to growth, such as a high rate of inflation, and a result, the Reserve Bank seems to want to limit money supply by raising interest rates, which in turn will lead to a contraction in the amount of capital available for companies to finance their growth and lead to a reduction in the growth rate of many companies.<br />
As a result of all this, and because there seems to be a slight positive movement in the economy of the United States, FII's seem to be selling in the domestic market, and are also repelled by the amount of the scams, which increases the perception of a high degree of corruption in India as a whole, something that is seem as harmful to the working of companies. <br />
In the past 2-3 months, there has been a sharp fall in the value of mid-caps with many portfolios falling by 20-25%, a sharp drop that is not fully mirrored by the value of the Sensex. So what does one do about stocks ? If you believe (as I do) that in the next 2-3 years, there will be a continuing fast growth, then a drop in mid-caps and some large caps is a good opportunity to buy, so am tracking stocks such as:<br />
1. Elecon Engineering<br />
2. Reliance Industries<br />
3. Bharti Airtel<br />
4. Pipav Shipyards<br />
5. Hindustan ConstructionAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com3tag:blogger.com,1999:blog-36029479.post-28806161909086455442010-10-16T20:27:00.000-07:002010-10-16T20:27:39.202-07:00India stock market update as of 15 October 2010Contrary to most expectations, the Indian stock market has been on a rise, going up and up. This is inspite of the fact that the most recent index of Industrial Production (for August) has seen a downturn (with the most recent rate being 5.5%, compared to a much higher level just a couple of months back). Further, the market has seen a huge influx of money from Foreign Institutional Investors, to the extent that the Government is contemplating putting some curbs on this inflow. The Sensex is reaching levels that were last seen in December 2007 - January 2008, and we all know what happened to the market after that.<br />
Inspite of the fact that past statements of caution and doom seem to have been defeated by the market, we should continue to remain cautious and be careful with putting more money in the market. Stocks that remain fundamentally safe are fine to hold, but if there are stocks that have jumped up significantly, then cashing out for atleast a portion of such profits is the sensible approach. Some of the shares that I am currently tracking:<br />
Western Shipyards<br />
KNR Constructions<br />
Action Construction Equipment<br />
Coromandel Fertilizers<br />
Andhra Sugar<br />
Bajaj FinserveAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com2tag:blogger.com,1999:blog-36029479.post-78545573174042288012010-09-23T07:45:00.000-07:002010-09-23T07:45:19.272-07:00India stock market update as of 23 September 2010As predicted, the Indian stock market is becoming much more volatile. In the last couple of days, we have seen the usual conditions of volatility such as the large cap going up, while the middle caps have been extremely volatile. The Reserve Bank is predicting some increase in inflation, and hence has raised some of its rates by a small amount.<br />
For the last many weeks, most retail investors have actually tried to increase their cash levels by selling out those scripts where there is a profit, and trying to stay on the sidelines in this volatility. This is what is recommended to most investors, unless they are confident of their involvement in the market, and about the script they are holding and can take the losses that may occur. At the same time, there is news about sugar scripts that may be worth buying, given some losses in sugar crops and a potential hardening of the prices.<br />
Some scripts that I am actively tracking:<br />
Voltas<br />
United Phosphorus<br />
Jyoti Limited<br />
Punjab Woolcomber<br />
Ponni SugarAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-46547522357903492672010-09-16T11:38:00.000-07:002010-09-16T11:38:25.015-07:00Indian stock market update as of 16 September 2010The Indian stock market is getting very volatile nowadays. It reminds me of the days near January 2008 when the market was very volatile, with the Sensex going up by large numbers or falling, but with most stocks remaining where they were or sometimes even falling. There is still money to be made in specific scripts, but it is a high risk / high gain approach. If there is a fall due to liquidity inflow into the system being reduced, then even scripts that seem safe can fall pretty fast (we have seen the effect of what a reduction in liquidity and bad sentiment can do to all stocks in the multiple falls that happened in 2008). Right now, DII's (domestic financial institutions are selling) while FII's are pumping in money; but this inflow is always volatile. Every expert says a couple of things - India has a good economic growth ongoing, and Indian stocks are expensive. The possibility of a small sharp correction is pretty high right now, so be careful about the stocks that you are going in for.<br />
There are positive news for the medium and long term - the figures for industrial growth were higher than expected, which means that Indian industry will pick up; at the same time, there will be a need for more credit and working capital, as a result, most predictions are that the Reserve Bank will increase interest rates to head off the expected increase in inflation.<br />
Some stocks that I am currently tracking:<br />
Reliance Industries - the stock remains a safe bet, and has shrugged off some recent weakness where there were predictions that the stock could fall to 600 levels<br />
Uflex - the stock has run up sharply in the last couple of months, but the company remains a fundamentally good company in a good sector<br />
Kirloskar Pneumatics - Run up a bit in the last 1 month<br />
Rajesh Exports - Looking good technically<br />
Rama Newsprint - A turnaround story<br />
Shanti Gears<br />
Cosmo FilmsAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-26025363472106513582010-09-08T08:54:00.000-07:002010-09-08T08:54:39.936-07:00Indian stock market update as of 08 September 2010The market has been oscillating a bit in the past few weeks. After doing increases in the past few months, there is a lot of speculation that the market is over-heated, and it is only the inflowing liquidity that is causing the market to go up. At the same time, the Government and the economy are all giving positive signals for the overall condition of the economy, which boosts sentiment (although it must be admitted that all the sentiment is overall feeling that a crash is imminent and is healthy for the market).<br />
The US economy seems to be taking a slight up for the better, and that is a good sign overall. The Indian economy needs to hear that the talk of a double-dip recession is not going to happen, and that things will remain good and that the Indian economy will continue to have a good rate of growth. If this continues, there will be periodic dips in the market but the overall trend will be positive, which is what the stock investors of the country need. <br />
Some stocks that I am tracking:<br />
Action Construction Equipment<br />
Ashhiana Housing<br />
Jindal Poly (has gone up hugely in the last few weeks, but some scope still remaining)<br />
Rama Newsprint (more long term)<br />
Talwarkars<br />
Western India ShipyardsAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-2425123199553933952010-08-28T12:48:00.000-07:002010-08-28T12:48:54.983-07:00Indian stock market update as of 29 August 2010The Indian stock market is right now pretty directionless. The overall sentiment is more towards caution, wait and watch, and see whether there are any drivers towards increasing market movement. There are a lot of people screaming for a correction to happen, talking about it news articles, in blogs, updates, and so on. <br />
The world economic situation is also fairly unstable; the 2 largest economies - the US and China both have their own problems. The US is being threatened by a dip back into recession, and China (even though it still posts huge increases in the economy) is starting to face its own problems in terms of some amount of social discord, more openness threatening to showcase some of the problems that China has hidden away. The EU zone is not doing so well either, and there is a movement in the EU to clear their debts through austerity measures, which are good for finances but do have an effect on consumption.<br />
In India, the Government finally cleared the long pending Direct Tax Code, but no major changes in it; the Government kept on giving up on most of the reform measures, and has kept a number of exemptions in the code which was something that was supposed to be cleared from the DTC.<br />
In terms of stocks, given the uncertainty in the market, if you are holding more volatile stocks, you should really get out of them unless you are able to take the risks. Invest in stocks you feel strongly about. Some of the stocks that I am currently tracking:<br />
1. Reliance - I continue to feel enthusiastic about this stock in the long term<br />
2. Action Construction Equipment - A small player, but seems to be well managed<br />
3. Balaji Amines - Well posed to increase in value<br />
4. Elecon Engineering<br />
5. Uflex India<br />
6. Jindal PolyAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-19056244780868780232010-07-20T12:41:00.000-07:002010-07-20T12:41:22.008-07:00India stock market update - 20 July 2010Interesting times in the Indian market. The Sensex is dancing near the 18,000 mark, even as the overall global economic indicators are none too good. There are already articles that are again talking about a decoupling of India and China (and we knew what happened the last time there was a of talk about decoupling of India and China from the overall economic situation, the pullout by FII's decimated the Indian indexes).<br />
There is speculation in the market that the next couple of weeks could see a period of slowness, and maybe some amount of pulldown, so am evaluating all my current stocks to see which of these I can cash out and stay in atleast anywhere between 30-40% cash.<br />
Stocks that I am currently tracking:<br />
1. Action Construction Equipment (CMP Rs. 53)<br />
2. Camlin (Rs. 34)<br />
3. Bartronics (Rs. 150)<br />
4. Exide Industries (Rs. 106)<br />
5. Hind Rectifiers (Rs. 69)<br />
6. Vimta Labs (Rs. 36.5)<br />
<br />
One group that uses mathematical calculations to determine the technical targets for investing (<a href="http://groups.google.com/group/bindaasbulls" target="_blank">link</a>)Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-50680916491484756072010-07-05T19:32:00.000-07:002010-07-05T19:32:44.144-07:00Stock market update as of 06 July 2010I have been not been updating this post for as much as 6 months (been very busy), but now that I am back to investing on a regular basis in the market, I will be much more regular in updating this post.<br />
The overall economic situation the world over remains fragile, with the biggest economy, the US, still not seeing broad positive signs. Unemployment is still high, does not show signs of changing dramatically for the better; the housing and consumer markets are so-so, with worries that things will get worse. In addition, due to political pressures over too much money being spent which is distorting the budget deficit, the major stimulus problems are now in threat with Obama not being given the level of money he desires. <br />
In Europe, even with some of the economies worried about defaults, including Italy, which is a G7 country and a large economy, there is an opposing argument that is gaining ground, which is that the budget deficits and overall debt are getting unsustainable, and the Governments will have to go in for belt-tightening, something that the British Government is now going in for.<br />
What does this mean for India ? Well, even though the Indian economy is doing great, and the monsoon seems okay for now, we have seen in the past that when the world economy goes through strain, the investments in the Indian stock market get affected and can cause lowering of the index, affecting all stocks. So, the prognosis right now is, buy stocks that you see are fundamentally good, in sectors that are not going to be directly affected due to any export problems (so avoid IT), and be careful in your investments.<br />
Some stocks that I am currently tracking along with current market price (and I do not do price targets, just stocks that I am interested in):<br />
- Action Construction Equipment (Rs. 49)<br />
- Camlin<br />
- HEG<br />
- Patel Airtemp<br />
- Polyplex Corporation<br />
- Supreme Industries (an old favorite)<br />
- Western India shipyardsAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-24080082412861794752010-01-09T02:38:00.000-08:002010-01-09T02:38:42.915-08:00India stock market update as of 09 January 2010The Indian stock market has seen a recent high, even though there are sporadic days when the market drops (although the drops have not been of the type that we would see earlier) when the market would suddenly drop by 200-400 points in the last one hour of the market. The growth rate in the Indian economy seems to be on the higher level, the Government is making all the right noises about continuing the growth stimulus and disinvestment of PSU's. However, the global economy still has a long way to go. China seems to be going strong, but a recovery in the US still is in fits and starts, and not a clean recovery.<br />
Right now, the market has jumped up a bit, and there are fears of a correction imminent, but the trend overall seems to be that the market will keep on going higher (but one should have the courage to take the roller-coaster ride that comes with such a movement). For the past several weeks, I have been also looking at studying more technical indicators so that can see stocks for the short 2-3 weeks, as well as for longer periods.<br />
<br />
Fundamental based stocks:<br />
Mahindra Ugine - Rs. 60<br />
JBF Industries - Rs. 102<br />
Indiabulls Securities - Rs. 36<br />
Sharyan Resources - Rs. 88<br />
Walchandagar - Rs. 225<br />
Rishi Lazer - Rs. 55<br />
<br />
Technical trends upwards:<br />
Andhra Bank<br />
Asista<br />
Maral Overseas<br />
Bajaj Finserv<br />
Financial TechnologiesAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-39374025141337621462009-11-22T03:43:00.000-08:002009-11-22T04:22:16.961-08:00Indian stock market update as of 22 November 2009So what happens next in the Indian stock market ? There are different predictions about what the future holds for the Indian stock market, but the different predictions are more about the short term. There are different indicators on whether for the short term, the markets have climbed up to a bubble level, or whether there are indeed reasons for such a jump. It is predicted that part of the growth in the US (the so called green shoots) have been over-inflated, and that growth in the US right now is nebulous, with it being a jobless recovery. <br />For the middle and long term however, things are much more positive, with the overall global economy having seen an uptick, and both India and China looking much more positive. India seems to have overcome the worry of a failed monsoon, although it is likely to impact Government policies in terms of foodstocks and its food imports. So what are the stocks to be watched out ?<br />1. Mahindra Ugine Steel Company Ltd (good for the medium and long term, but needs patience)<br />2. Ashiaana Housing (if housing market is not a bubble, then very good for the long term)<br />3. JBF Industries <br />4. Shilpa Medical (risky, but can grow multiple fold)<br />5. Elecon Engineering<br />6. Central bank of India<br /><br />Also, started to look at more technical information. What is the difference between Technical and Fundamental Analysis (very briefly) ?<br />Fundamental Analysis is the study of the fundamentals of the market. Fundamentals are all things that affect the supply and demand of the underlying commodity.<br />Technical Analysis, on the other hand, is the study of the market based on a chart of its price data, and assumes that you can do some amount of prediction of the price and volume movements based on past trends.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-66588319529567899512009-10-07T12:18:00.000-07:002009-10-07T12:24:00.403-07:00Finding the right company to invest inThis post is about a tool available on the BSE website (<a href="http://www.bseindia.com/stockscanner/stockscanner.aspx" target="_blank">link to actual tool</a>) that allows you to find companies having a specific criteria. There are people who only want to invest in small size companies (betting on a higher quantum of risk), and there are others who want the safety of large caps. People also have criteria based on the EPS for the company (it tells you whether the company has a good return), and also the PE ratio (since a correlation between PE of a company and that of its industry indicates whether the company share price could increase).<br />You can select the following parameters:<br />LTP<br />Market Cap<br />EPS<br />PE<br />From the site:<br /><blockquote><br />This section will enable you to fine tune your search of stocks. Here you can search stocks based on the 4 fundamental parameters of the company's performance. <br /></blockquote>Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-40512751166039257632009-09-29T08:30:00.000-07:002009-09-29T11:12:42.290-07:00Recommendations for the Indian stock market as of 29 Sept 2009We are approaching a stage where the market is seemingly over-heated. Quite a few mid-caps have shows levels that are 3-4 times what they were just a few months back, and even with improvements in the overall market, there is a sense of uneasiness. I was speaking to somebody who does deals (M&A), and he was of the opinion that this resurgence has already gone to promoters head, they are back to asking for high rates for their companies capital that was seen before the melt-down, and this was substantiated by a report in the Economic Times that claimed that deal makers are headed off to China rather than India since they do not see too many deals happening in India.<br />The US economic data seems better, but there are blips when the economic data seems to suggest that one needs to watch signs of recovery carefully, and not assume that everything will go fine. What this translates into for the retail investor is that you should be careful, do not start to again assume that stocks will only go up. If you have made a lot of profit, then remove some of that profit and put into safer instruments, and use the remainder to play in the market. One thing we learnt from last time is that there is no easily defined floor below which the market would not fall - it kept on falling for many months, and retail investors kept on waiting.<br />Stock that I am current tracking (or buying):<br />1. Rishi Lasers<br />2. KLG Systel<br />3. Supreme Industries<br />4. Patel Airtemp<br />5. Nilkamal<br />6. VST Tillers<br />7. Reliance (long term)Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-24909089009591117242009-09-24T12:21:00.000-07:002009-09-24T12:41:51.321-07:00Indian stock market update as of 25 September 2009Overall, there is a mood of optimism. Even though exports have been falling, there is a feeling that it is only a matter of time for the market and the economy to be a upward trend. The plentiful rainfall of the past few weeks has reduced the rain shortfall this year to a much lower level, decreasing the potential problem caused by drought and lower drop output.<br />The Index of Industrial Production has gone up slightly, realty and consumer goods are starting to pick up, and so on. At the same time, the market has jumped to good heights in the last few months, and there is an over-whelming feeling that the market may be due for a correction, with a contra statement that times are going to be better, and the market is just factoring that in. At these times of high, it is good to get rid of junk and penny stocks.<br />Stocks that I am currently tracking:<br />1. Divis Laboratories (more stable, long term)<br />2. Jaihind Projects (more risky)<br />3. Nirlon (risky)<br />4. Unity Infra (risky)<br />5. Rishi Laser (long term)<br />6. Godrej Industries (short term)<br />7. Asahi India GlassAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-25929369108418625172009-09-13T04:15:00.000-07:002009-09-13T04:46:59.165-07:00Indian stock market recommendations as of 13 September 2009If you look at what analysts are recommending (that is, if you believe what analysts have to say after the events of the past few months), then the recommendations are never simple. The overall market situation remains complex:<br />- The rainfall over the past few weeks has reduced the overall rainfall deficit for the year drastically, as a result, the Government is now feeling a lower negative impact on overall growth<br />- The market has gained over the past few months, to the extent that there is a feeling that the market is now over-heated and a correction is now impending. If you read economic and equity stories, you will hear about how stock are now seen as expensive, and that fund managers are feeling pressure to invest else they will feel left behind, even though they feel stocks are now expensive<br />- The overall world economy seems to have stabilised and seems to be on the road to recovery, and this has been stated by many top economists and others (even if some of them are trying to make optimistic projections, there is a touch of reality)<br />- In India, the IPO market has suffered a setback because 2 recent issues of Adani Power and NHPC did not leave any value for investors, and hence the stock is already below the issue price. At the same time, there are huge institutional investments into IPO's, signifying that money is available to invest.<br />With all this information, what should the retail investor do ? This is really not the time to take too much risk, so be careful about bringing fresh money into the equity market. I, am going to keep evaluating certain stocks to see whether there is potential to invest in these stocks, and also trying to sell a portion of other stocks that have jumped a lot.<br />1. Nirlon: This is a risky stock. If the market goes down, this stock also goes down. However, if the realty sector and commercial rents pick up, then Nirlon is a good stock to own.<br />2. Ashiana Housing. Another realty company. The company share has been oscillating for the past few days, and I am looking to own these shares for atleast a period of 1-3 years, and hence am picking up shares on a gradual basis.<br />3. Mawana Sugar. In India, sugar is a difficult area right now, with sugar being in shortfall and overseas price high because of expectations of imports by India.<br />4. Cairns. It's oil wells in Rajasthan have started producing oil, and on the back of a global recovery, there is an expectation that oil prices will start increasing to ever higher levels.<br />5. Sharyans resources. The company's share took a major hit with the economic downturn, but now looks to be again regaining hope.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com3tag:blogger.com,1999:blog-36029479.post-62234886150476063882009-09-01T08:04:00.000-07:002009-09-01T12:29:11.293-07:00India stock market recommendations as of 1 September 2009For the last couple of days, the Indian stock market has not been reacting as one would have liked. After a good upward move on mid-cap stocks in the past few weeks, there has been a small correction in the last 2-3 days, with the market falling around 100-200 points per day. One can hope that this is just a consolidation phase. The overall trend for the future in terms of growth looks impressive, with GDP growth being higher than in previous quarters, although one has to worry about what the failure of the monsoon means for the country.<br />Mid-caps seem to be again the flavour of the season, and some of my mid-caps (risky ones though) have gained a bit in the last one month, atleast 15-30%, which is good growth. These are across sectors. Some of these stocks are:<br />Nirlon- This is a real estate story, with the company having developed some good commercial real estate, and if commercial rents pick up, then the company has a good story on its hands.<br />Ashiana Housing - the revival of the realty story means that well regarded companies do well, and Ashiana Housing is one of these companies. The company has gained from a low of 45 to currently 62.<br />Hindustan Constructions - The company has yet to gain significantly, but I am cautious about the long term prospects of the company.<br />JMC Projects - The company is doing well, and is a well regarded small player in the construction / engineering area<br />KLG Systel - The company has seen a massive fall in its valuations since January 2008, but is now on the recovery path, having increased to 2.5 times its value of last October. It is a well regarded provider of solutions to the Government.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com1tag:blogger.com,1999:blog-36029479.post-71089837184570938272009-08-22T06:46:00.000-07:002009-08-22T07:33:43.008-07:00Indian stock market recommendations as of 22 August 2009The Indian projections in the short and medium term (6 months) for the stock market are in a bit of a flux. The US recession has been declared to be on its last legs by the Fed Chairman, Bernanke; however the facts on the ground are a bit uncertain. The housing market (where the entire problems started) seem to be looking up, but the same is certainly not true for the jobs market where the joblessness claims in the US have only gone up in the last couple of months, confounding experts who expected that signs of a recovery would come with fewer jobs getting lost.<br />Even other critical parameters such as consumer purchasing (critical for an economy like the US) are not delivering on the promise of a improved recovery. In addition, there is some real bad news coming out from China where the market has reacted pretty adversely, giving jitters to the market overall. However, and this is the most confusing part, it would seem that the markets worldwide (especially in the US and India) seem to be fore-casting a recovery in the next 6 months to 1 year.<br />In India, there are some reasons to be cautious about such a recovery, even though India never went into a recession; the growth got reduced, sentiment was very badly hurt, and the stock market had a literal collapse. Right now, the drought has complicated matters, and both the drought combined with the still increasing swine flu will knock a couple of points off the growth rate and cause severe jitters to the Government. <br />The time is not bad to make investments in some stocks, and here are some stocks that I am tracking:<br />Whirlpool - With more Indians entering the middle class, the growth rate of consumer appliances is only likely to go up in the long term, and Whirlpool is poised to join in that growth<br />Bartronics - The company had shown a lot of promise in the year 1998, but the crash had crushed any positive news of the company. However, now reports are increasing the prospects of the company being able to gain from projected boon in RFID usage<br />Companies in the infra-structure area will increase as the rate of GDP growth increases, even though there remain concerns about stretching themselves thin, and having working capital problems. Companies in this area include Gayathri Projects, Core Projects, Kalindi Rail, Hindustan Contstruction, Gujrat Apollo, Jaihind Projects, JMC Projects<br />I am also starting to evaluate more risky areas, such as when companies are seen as potential targets, and you get multiple companies fighting for these. There is some good short term money to be made if you can identify.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-18223444658274598012009-08-19T12:49:00.001-07:002009-08-19T12:49:53.427-07:00Individual finances: How to manage when loans are killing youI read an article that took a situation where a person was in real trouble financially, and what the person can do in such a situation that could help. The situation was one that many of us can relate to - in times of good money and a good job, your finances and projections for the future are good, and you decide to invest for the future. You take a loan for the house that will be an asset for the future, you invest the remaining money in stocks (after all, equity is the way to grow your money for the future), and you get a car to travel in comfort along with your family. And then disaster strikes - your house loan amount was high (higher as a percentage of monthly take home salary that you would like - should not be more than 40% of take home after taxes and other deductions), and it got higher as interest rates went up, the stock market collapsed, and then the worst of all, you lost your job. So, what do you do ? (<a href="http://economictimes.indiatimes.com/quickiearticleshow/4841948.cms" target="_blank">link to article - read it till the end, the situation may not be exactly the same, but there will be similarities</a>)<br /><br /><blockquote><br />He decided to approach a debt counseling centre for his financial hassles. They showed him the right way to manage his finances. They also mediated between him and his bank. He also obtained written consent from the bank that he would resume repaying his loan once he got a job. In such situations banks do oblige you if you manage to repay most of the money or part of the money if not all as it was a better deal than no money at all.<br />1. Try to lower your interest rate. Negotiate with your bank. One other way is to convert your credit card debt into a personal loan debt. It will definitely be lesser than the credit card interest rate. <br />2. Calculate your net worth and see if any of your investments could help you prepay a part of your loans.<br /></blockquote><br /><br />More tips are there in the article. The main point is that you should be careful of your finances rather than falling in this trap, and if you do, then get help, speak to the bank and explore other means of financing (except for high-interest loans).Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-35632530370127304032009-08-09T11:13:00.000-07:002009-08-09T11:14:54.438-07:00Mistakes commonly made by equity investorsEverybody makes mistakes in the equity market, so one cannot blame retail investors for making many mistakes. Even acclaimed mutual fund and hedge fund investors have made mistakes over the years, but that does not excuse the retail investors from trying to learn about the mistakes that they keep on making so that they reduce the number of mistakes they make in the future. At the minimum, investors should learn about these mistakes so that they can try and learn from these mistakes. Some of these mistakes are:<br />1. Investors typically join the herd. So, when the stock market crashes, people run to liquidate their holdings, even at a loss. For example, when the market was really down in October, companies that were fundamentally sound were picked up by people who believed in the long term.<br />2. People look at tips, and even do investment based on tips even if they know nothing about the company or stock.<br />3. People do not read about the fundamentals of the companies that they are investing in. Typically, company valuations follow the projections of the sectors that these companies belong to, and after that, the company performance also plays a role. However, people do not bother finding out these facts.<br />4. People invest and forget. There are a number of people who invest in companies or mutual funds and do not re-evaluate the nature of their investments and the performance over a regular period, say every 6 months or every year<br />5. Diversify your portfolio: Do not invest everything you have in the stock market. Invest in mutual funds, some in debt funds, some in PPF, some in realty, and so on. Make sure that you are properly diversifying your investments, at the same time, make sure that you invest only where are you comfortable in your level of knowledge. Even consider things such as investments in gold and art.<br />6. Don't get caught up in greed. When people lost out in January 2008 after markets had climbed to record highs, people were not willing to consider that the market could go down. People were not willing to take some of their investments out of the market, and lock that money in safer investments.<br />7. Invest for the long term. Don't get scared by short term movements. Even while tracking them, make sure that if you have invested based on fundamentals, and for the long term, you don't lose patience.<br />8. Don't get tricked by other people. You will always hear people say that they made incredible amounts of money in investing in the stock market, and there is a feeling of being left behind. Remember, you only hear the stories that are positive, and you should never let such stories guide your actions.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-43128781730137860892009-08-09T10:36:00.000-07:002009-08-09T10:38:10.956-07:00Finance: Safety vs. risk in terms of investmentsOne typically hears of cases where people have invested money in dubious investment schemes run by scheming and smooth investment gurus who actually end up duping people of their hard-earned money. These smooth operators typically get caught, but this is no consolation for those people who lose their money in these schemes. Similarly, people end up losing their money when they invest in stocks and mutual funds, either if the entire market collapses or if they invest in very risky stocks. So does this mean that people should invest in risk free investments ? No, because there is a ratio between risk and return. It is for every individual to decide their risk - return paradigm based on their comfort levels, and their ability to take risks. <a href="http://economictimes.indiatimes.com/quickiearticleshow/4848410.cms" target="_blank">Read this article</a> to learn more:<br /><br /><blockquote><br />The rating scale starts with AAA (lowest credit risk) and ends at D (default grade, highest credit risk). Going by the normal yardstick, one should always go for the best. So, should all the investors invest only in AAA rated issues? To fathom this paradigm, we have to understand the riskreturn relationship. Risk-return & risk aversion. It is because of the relationship between risk and return — higher the risk, greater has to be the expected return on that investment and vice versa. An investor hoping for higher returns has to embrace the risks that are attached to it.<br />But how does an investor decide how much risk to be taken? In reality, there is nothing like optimal risk-return trade off. It is often a derivative of various factors like time horizon, liquidity, and some investor specific circumstances. The risk-return trade off is extendable to equities as an asset class also. The relative safety of investing in blue chips may not result in highest returns. In case of IPOs also, the IPO grading is an opinion on the relative fundamentals of the company. The investor decision is guided to a large extent by the valuation and risk tolerance.<br /></blockquote><br /><br />So, as they say, the ability of a person to take some risk in their investment is guided by multiple factors. The only thing one should do is to ensure that one has thought through the investment carefully.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-81741808424897638212009-08-09T10:20:00.000-07:002009-08-09T10:22:33.863-07:00Obtaining duplicate copy of documentsPeople encounter this problem once in a while. You have invested money in a Fixed Deposit, or in Mutual Funds, or some other such investment method (including investing in a private company). Suddenly you find that you cannot locate the proof of such an investment (you could have lost it, it could have got destroyed in a fire or similar accident, or any other such reason). Panic sets in, after all, what do you do now ? Visions of losing your money come to mind.<br />The best method to prevent such an occurrence from happening is to make a copy of all your important finance documents and keep them in a safe location so that you have a backup. However, what happens when you have not taken this precaution ? Read this article to learn more <a href="http://economictimes.indiatimes.com/quickiearticleshow/4873058.cms" target="_blank">(link to article)</a>:<br /><br /><blockquote><br />To make sure you don’t have to dig deep in such a situation, here’s a guide on the process you can follow to get a duplicate copy of key documents such as NSC, FD, Form 16, Pan Card, mutual fund scheme, insurance policy and home loan papers. “If the papers, however, cannot be traced after reasonable efforts and you suspect they may have been stolen, a report at the nearest police station must be filed immediately,” advises Amitabh Singh, partner — tax & regulatory services at Ernst & Young. <br />To ensure there is no misuse, instantly inform the respective departments about the loss of original papers/document/policy. The next procedure should be to apply for a duplicate. As a policy, most financial schemes allow for issuance of duplicates on payment of a nominal fee. According to post office regulations, you can get a duplicate certificate issued if loss of the certificate has arisen out of theft, mutilation, defacement. You would be required to send an application to the post office where the NSC was issued. <br /></blockquote><br /><br />Similarly, for Mutual Funds, you should contact the AMC. The advantage for Mutual Funds is that they issue statements every few months as per their pattern, and those are equally valid. As recommended, make sure that you keep a duplicate copy beforehand. To get a copy later takes more effort and running around multiple locations, but it is possible and something you should work through.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-45002047073449122022009-08-04T13:10:00.000-07:002009-08-04T13:23:25.810-07:00Indian stock market update as of 4th August 2009The market is behaving a bit unpredictably, with sudden ups or downs, even though the fundamentals have remained roughly the same. Many people would argue that this is exactly how the market behaved in the last few years, so this up and down is actually consistent. One needs to consider the different factors involved in taking the market up or down:<br />1. World wide market moves<br />2. Indicators of the recession worldwide and in India<br />3. Macro economic situation in India, such as whether monsoons will be good or deficient, whether the Government is hoping for a improvement in growth, changes in overall economic mood<br />4. Policy measures by the RBI or by the Government, such as interest rate movements, monetary and fiscal policies, disinvestment and reform, or the blocking of such reforms<br />5. Overall political scenario, where the Government is seen as stable, or too dependent on its allies and hence prone to instability<br />6. Influence of the Communists and Leftists<br />7. Overall sentiment, such as if the market has moved too much in the recent past, time for a correction, or vice versa<br />And so on, but these are the chief reason for the movement of the stock index.<br /><br />Now, what is the current position. India is not in a recession, but growth is very sluggish and the monsoon shows every chance of being deficient in the northern states, leading to an effect on the economy. At the same time, the Government keeps on stirring up the path of policy reform from time to time, even when it is pumping huge amounts of money into poverty alleviation schemes, but without proper oversight (and hence spending more than it should normally do).<br />The market has moved up a bit, to almost 16K, and there are 2 contradictory advices coming in; one is that there are no fundamental reasons for the market to rise, and the other mentions that overall economy is looking better, realty is improving, production seems to be on an upward jump.<br />From my side, the mantra remains to be cautious, and look for opportunities. I have invested in the following for the past few weeks, and would be investing more from time to time:<br />KLG System<br />HCC <br />JMC Projects<br />Bharti Airtel<br />Cairns <br />Ashhiana Housing<br />DLF (this and Unitech are dependent on housing market looking up)<br />Unitech<br />GRAUER & WEIL<br />Nirlon<br />Satyam Computers (riskier than the others)<br />Supreme IndustriesAshish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0tag:blogger.com,1999:blog-36029479.post-63939287468790644252009-07-11T22:45:00.000-07:002009-07-18T13:28:31.520-07:00Market not happy over the Budget - Sinking and then rising a bitWhat does a deficit mean ? There are many terms such as fiscal deficit, monetary deficit, revenue deficit, but the differences between are them are relevant for people involved in the field of economics. For the normal person on the street, a deficit means that you are spending more than you earn. A normal person cannot do this without getting into serious money problems, but a Government can (and in almost every case the world-over), does do this. How can a Government spend more than it can earn ? A Government does this through means of a deficit, that it either finances by printing more money, or by borrowing funds from the market.<br />Both cases cause problems for the economy as such, since if the Government prints more money, this essentially means that more money is being put into the system. More money, but the same amount of production means in simple terms - if you wanted something, and many others want the same thing, then the thing you want gets more expensive. In terms of the economy, if more money comes into the system, then things get more expensive and inflation rises.<br />If the Government borrows more money from the market, that is less money that is available to private companies to get from their market to meet their funds requirement, or if they need loans for capacity repair or expansion. Such reduction in the availability of funds means that loans for companies get more difficult and has an effect on the ability of private sector to rise above these bad economic times.<br />Why did the Government need so many funds that it was willing to increase the fiscal deficit to a point where it would be pointed out by economists as a risk ? Well, these are bad economic times and it is at these times that Governments the world over are putting more money into the economy to try to get out of these struggling times. In addition, the Government realized that politically, it has benefited through such measures such as the National Rural Employment Scheme, and it wants to make sure that it is pumping money into the rural sector, the agriculture based sector.<br />Why did the market react negatively to the Budget, and why am I writing about it after so many days ? Well, the market had been expecting some relief measures, or at least token gestures such as the removal of the Securities Transaction Tax. Instead what it got was no new seemingly market or industry oriented measures and no removal of the STT. Instead it got a much higher fiscal deficit and a seeming reversion to populism. And hence the initial bad reaction to the budget.<br />However, every year, there are more voices gaining ground that industry should stop looking to the budget as an earth-shaking event, instead treating it as a simple Profit and Loss statement of the Government. In addition, the initial depression of the market has subsided as it looks like there are faint signs of revival, and the realization that the budget did not make things worse, and if rural consumers get more income, that is a new market. <br />What should you do ? Unless, there are some earth shaking events, the long term prospects look good and you should stay invested for the medium to long term in fundamentally safe companies. Avoid risky companies unless you know what you are doing and you know the risk involved.Ashish Agarwalhttp://www.blogger.com/profile/17375418045330076026noreply@blogger.com0