IS SENSEX ONLY A NUMBER?

Yesterday another milestone (15,000) achieved by Sensex or Indian Capital Market. Though market pundits tried to down play it by statingthat it was just another number waiting to be crossed, everyone including them were ecstatic. The Really Small and Helpless Investor (RSHI) will have renewed believe in the market.

Literally Sensex./ Nifty means nothing to small investors with very small amounts to invest in pricey Large-cap stocks. The dismal amount of dividends the index stocks yields in comparison to money invested is nothing. One of my friends (another RSHI) invested some good money around twenty Grands in ten shares of Infosys, the recent dividend he received was some pittance sixty five rupees only. It seems and is really worthless to have ten shares of an costly index stock, most of that sixty five rupees will be taken away by bank as transfer commission. I wonder why the dividends are not deposited in bank account directly. All Demat account holders must have a bank account and must be submitted while opening the Demat.

You can see the dividend declared by ONGC is another pinch of salt to injury. Had they not declared the dividends the stock price would have gone up leaving the small investors benefited. He would not have to deposit his cheque which the Bank Clark frown upon. The dividend payment policy is beneficial only to Big Investors and (for PSU) the Government, not to small investors. This is one of the main reasons the Really Small and Helpless Investor (RSHI) stays away from big index stocks, though the Large-cap stocks have shown excellent momentum in recent months.

The less costly Mid-cap and Micro-cap (Oh terminology! actually Small-cap) stocks do not provide this dilemma. The profits in most cases are utilized in expansion and stock price reacts.

(RSHI should preferably stay away from PSUs, I will have a public musing in this blog in coming days.)

I am very happy about the performance of Yes Bank, the run is not smooth but that’s a stock should do, correcting itself while going up.

Concern was about my second investment of HCL Technology, but CLSA predicted earning growth should be 62% for the next result. Only thing is rupee devaluation, Infy will lead the way as everybody believes. Probably wishes are shy away.

I purchased 100 stocks of IDBI at 117.90/- yesterday (with little conviction that market will not go down), but I have my own doubts. It was a spurt decision, will I repent later?