PREPARE FOR PICKING STOCKS

It is always difficult to be sure in stock market. The days before, when I did put down my opinion as “it is probably not the right time to pick up stock for small investors”( LINK), many of my friends were at serious difference with me.

I had my own reasons to come up with a statement like that.

As always the small investors tend to pick up stocks at higher price. How many of us could pick up our stocks at bottom, yesterday we came to know about the turn around of the market a tad later, by the time, it wheezed past many a miles, certainly we lost some good ground.

But again, the yesterday’s rally was the turn around of the market?

Probably not, the market again went down today for some reason that we could not think of. It seems the market will behave in weird way for some more time.
Or to me, till the liquidity re-injected from the refunds of Reliance Power IPO. That means after a week time. We can wait for some more time till a clear picture.

There are many a stocks which are at very attractive price right now. But the stocks which were at their best before the slide may not go back to the original position at the same rapid stride. History has many instances. Zoom your attention to the stocks with good fundamentals and which has prospects to grow, stock market always pays premium to growth story.

I have identified few stocks for picking up when the market stabilizes, but again I am suffering from liquidity crunch like most small investors.

Powergrid

GMR infra

PetronetLNG

ONGC

IFCI

RNRL

Nagarjuna Fertilizer

RPL

May be it is the right time to buy as per the market pundits, but listen to your inner self too. Most of the time, in such situation the gut-feelings presents the answer.

The loss or gain is yours, so nobody is going to shoulder responsibility but everybody will claim credits.

DO NOT BUY: WAIT FOR SOME MORE TIME

The present fall of Indian stock market is so violent and vicious it forced me out of my slumber of so called bloggers block. The sudden and completely unanticipated tanking of the market is the result of many factors and the factors were cumulative. That is the reason of this violent fall trailing with some bloody aftermath after every fall.

I was shivering in front of my computer when I saw the freefall of the market as if there is no bottom, interestingly similar feelings was there when the market was going up at a frenetic pace (my earlier blog). Such wild movement of the market is definitely not good for the small investors.

But market reign supreme. The market is very vindictive in the hands of market operators. Probably it calls for proactive Regulators which do not yield to the stage managed hulla-bol of unscrupulous element.

Probably, after a long time, the market is reinventing value, and discarding momentum. In that case what will be our next logical step to rise like Phoenix from the ashes of our portfolios?
Should we cherry-pick some good mid cap stocks, large cap stocks, dividend paying stock and what not at some attractive price as some experts are dishing out their advice.
(Sometime I can not stand some experts who pose as Mr. Know-all and have some preconceived ideas which in most cases turn out to be wrong, but never accepted it. aka. ONGC, RNRL, L&T haters )

For me sit tight and watch is the best policy for the time being and buy my stock only after the market turns around from the bottom of this abyss.

I am very much sure we have a bull market ahead of us and may be these developments are for the best interest of us.

STOCKS FOR 2008: CALLS FOR REALIGNING STRATEGY

It was interesting to note the following ten top performing stocks in 2007. Link- Time-Blog.

Inner Mongolia Yitai Coal Co. Ltd., China, 1017%
Jai Corp. Ltd., India, 877%
Reliance Natural Resources Ltd., India, 823%
Ispat Industries Ltd., India, 742%J
indal Steel & Power Ltd., India, 664%
Essar Oil Ltd., India, 570%
Shougang Concord Int'l Enterprises Co. Ltd., Hong Kong, 534%
China National Building Material Co. Ltd., China, 496%
Lanco Infratech Ltd., India, 487%
Adani Enterprises Ltd., India, 467%

Surprised? Let me quote from the same source that out of hundred top performing stocks in 2007, fortyone are from India.

We are extremely bullish in India story and the above is just another support to our bullish outlook. We are an emerging market, and we have many hidden gems whose earning potential is not yet fully exposed. Above all , we have our unique stock/financial market which has a judicious mixture of domestic and foreign earning potentials.

But still, it may not be possible to repeat this kind of extraordinary feat year after year. To sustain similar kind of growth to our portfolios, it certainly calls for realigning of strategy and to have a peek into the minds of market pundits. Some good prescriptions of stocks for the year 2008 are already doing rounds in the world of investors. These prescriptions if you look at them have their own merits. These suggestions at times go terribly wrong leaving the investors high and dry. So, small investors are to apply their own discretion.

I personally liked few suggestions and these may be used as guideline for framing strategy for next year.

Business-standard: Some picks which does not need much expertise, still should reaffirm our faith in known stocks.

Moneycontrol.com: Mainly observations from Pundits. Interesting reading, for the contradictions.

DeadPresident: The most interesting, stock selection by mortals, must read page.

Business Today (Print edition) has also published their list of companies for the year 2008.

Happy New Year.