Struggle to make money from stocks

After a number of days of rise, the stock market crashed on Friday, with the sensex crashing by more than 300 points to close below 14,000. This, in my opinion, is primarily due to profit booking, since there is a feeling that stocks have again surged sharply after the last low. This is actually wise, but a retail investor is always confused. Even if you do profit booking on shares that have increased a lot, what do you do with the money that you get.
One option is to put it back in the market, but unless you can identify stocks that are going to keep on going up, it is difficult to do profit booking and re-deploy funds. In addition, even though mutual funds are touted as the smart option for investors, they have been an acute disappointment. Funds have crashed in line with the sensex, not actually living up to the concept of funds that can beat the market. This has been my experience, and that too after investing in funds that are supposed to be the best in the India market.
However, right now, mid-caps are slowly catching fire again, and if you have the patience and energy (and the will power), investing in engineering and realty mid-caps is something that I am looking at. Keep in mind that these stocks are risky, and only do so if you are willing to bear the risk:
1. Era Constructions: Rs. 350
2. Garnet Constructions: Rs. 70
3. Bag Films (short term): Rs. 44
4. Navin Flourine (slightly long term): Rs. 315
5. JMC Projects: Rs. 234

Labels: Equity, India, Mutual Funds, Stock

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The last few days have been good for the investors in the Indian stock market. The market has gone on to hit a 2 month high of 14,200 for the sensex. In addition, the negative trends for liquidity as being pushed by the RBI and the Government in an attempt to control inflation seem to have worked and we can see inflation slightly tapering down. Still high, but no longer in full-blown panic mode. This could of course also be due to the elections having passed everwhere except in Uttar Pradesh where some phases of polling are still due.
With the Reserve Bank indicating loosening on controls on the sub-20 lakh loans, the realty companies and housing finance companies are back on a good roll, with their stock prices increasing in the past few days.
With all this, and with the sensex on a high, there is a need for caution. There will be an increasing tendency to do profit-taking, which could cause the same amount of volatility as we have seen in the past. This was on display even today, when the sensex was initially negative, but then closed in the positive.
Stocks that I am currently tracking:
1. Reliance Industries: Rs. 1600
2. IFCI: Rs. 39
3. Atlas Copco: Rs. 678
4. Infosys Tech: Rs. 2022

Labels: Equity, India, Stock

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So the market seems to be a on roll now. Inflation has declined which makes people hope that credit squeeze days are gone, although I am not so sure. The RBI may decide to keep rates up till it gets a definite signal that inflation has been down for some time.
So this week has been mostly up, except for a decline on one day. The rise has been mostly lead by Reliance Industries which continues to look like the stock that all long-hold buyers should have in their portfolio, capable of returning good growth.
Another eagerly awaited metric was unveiled this week. The monsoon is depicted to be around 95% normal, which is good news for the market, since it means that there will be money available with rural consumers for purchases, and the rural segment is now seen as a sizeable portion of the market for a large number of products.
Some stocks that I am tracking:
1. JMC Projects - Rs. 233
2. India Bulls Real Estate - Rs. 303
3. Ashianna Housing - Rs. 285
4. Nirlon - Rs. 69 (more risky)
5. Era Constructions - Rs. 356

Labels: Equity, India, Stock

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I guess I was wrong in my previous post. I thought that the Government would recognize that with an increase in FDI coming into the country, setting up centers of bustling economic growth in the country would be the way to go. However, the Government seems to have decided that the economic model of SEZ is not worth the problems it has to face in terms of political opposition and farmers agitations. There were imperfections in the previous policy, chiefly being the use of the state to buy land. The market is the way to go for buying land, and companies should do this directly.
But even with this, the Government buckled down, and stated that SEZ proposals received after April 5 will not be processed. This flies in the face of conventional logic. There is no country that progresses on the back of an agrarian economy, economic development only happens when countries move up the industrial / services ladder, and majority of the people are employed in these sectors. The agrarian sector, especially in India where plot sizes are small and do not generate food on a large scale is not the way to go. The hope is that this move does not reduce the general optimism in the sector.
The inflation level has reduced, and hence there is hope that the continued movement in the RBI trying to squeeze money from the economy should now reduce, and credit availability for the industrial sector should continue. The good results of Infosys should continue to keep the market in good humour, but if I want to speculate, I would think that the next week will continue to be slightly negative since there has been upturn in the market for the past few weeks (net), and profit taking may happen.
Stocks that I am currently tracking:
1. Hindustan Constructions: Rs. 96
2. Tele Data Informatics: Rs. 65.80
3. Marksans Pharma Limited: Rs. 66.75 (short term)
4. JMC Project: Rs. 220
5. Mather and Platt Pump: Rs. 232

Labels: Equity, India, Stock

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This week has been a fairly good week for the Indian stock market. The sensex has been showing trends this entire week of going up, or going up and then being hit by profit booking, but overall sentiment has been positive. Is this likely to continue ? Million dollar question.
It is very apparent that the Government is going to try and to whatever it can do to fight inflation. The political cost of inflation is beating it black and blue. One can only hope that whatever monetary measures are taken to beat inflation do not end up throttling growth. For example, the RBI seems to be busy trying to mop up extra money out of the system, but growth is going to start getting hampered due to the credit squeeze (due to the increase in interest rates mandated by the RBI).
What sector seems to be doing well ? The IT sector should get a boost due to the good returns released by Infosys. The cement sector however is seeing what a determined government can do. The Indian Government wants to reduce cement prices, and after some non-cooperation by the cement majors, reduced the duty so that imports can under-cut the local prices. Not exactly a very happy trend. So cement sector is decidely on a wait and watch game.
Stocks that I am tracking:
1. Reliance: Rs. 1380
2. Infosys: Rs. 2094 (both are safe stocks)
3. Ramsarup industries: Rs. 148
4. Accel Frontline: Rs. 66
5. Voltas: Rs. 84

Labels: Equity, India, Stock

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The Government keeps on dropping little hints about still being on the reform track. In the midst of all the furore over the SEZ policy, the government released a modification to the policy such that some of the main objections were over-turned. The policy now mandates that Government agencies will not be involved anymore in the procurement of land from villagers, instead the SEZ building private company will have to get land. This is a good compromise, corporates buying land gets them out of the whole dispute about the villages not getting enough compensation. But the restriction on buying land more than a certain size seems unjustified. By setting up large industrial tracts, which will eventually form the basis for a city type of urban development with associated services, the SEZ policy could have resulted in more distributed urban growth areas, that may not happen for the time being.
On the stock market, right now, high interest rates are there for some time, although the long term outlook remains that interest rates will be low. The stock market seems to have accepted these policies geared towards reducing inflation, and more articles are getting posted about the need to take steps to control inflation. I remain in the market, although with caution.
Stocks that I am currently tracking:
1. Bharti Airtel
2. Mahindra Gesco
3. Peninsula Land
4. Bharti Shipyard

Labels: Equity, India, Stock

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For the last 4 days, the Indian stock market has been doing a somersault of sorts, seriously testing the mental balance of investors. On Monday, the market reacted to the RBI money-tightening measures by the sensex dropping a jaw-dropping 616 points. There was a lot of chaos, and I would think that this single day did more to scare retail investors than the normal volatility. From talking with people, they are worried about whether their capital is safe.
My response to this has always been something like a deja vu, we have seen this in the past (as recently as last year), where after the May carnage, stocks were down for a few months and recovered to zoom past all previous highs. There is no guarantee of that happening, and if the growth level remains high, then things should remain fine.
However, with inflation being seen as important to reduce, the government is implementing measures to tighten credit and bring down inflation money supply and hence bring down prices. Such tightening on credit reduces the amount of free money available to corporations and hence lowers the money supply in the economy.
Stocks that I am currently tracking:
1. IFCI: Rs. 34.95
2. Bharti Airtel: Rs 744
3. Karnataka Bank: Rs. 165
4. Yes Bank: Rs. 142.55
5. IVRCL: Rs. 265.55

Labels: Equity, India, Stock

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Even though I am posting this on the 1st of April, I am not going to say anything along the likes of an April Fool's joke. Dealing in the stock market is no joking matter, and the only time when I am really proud of my smile is when the market is crashing down a cliff edge, and my heart does no more than a couple of missed beats.
I would think Monday is going to be another day like that. With the rate hikes announced by the RBI after trading hours on Friday, Monday will be the first trading day after this hike, and common wisdom is that the market will open down. I wish I am brave (and hopefully not stupid) by hunting for bargains. I still believe that even the medium term outlook is positive, as long as these jokers ruling our country do not drag us down with some insane policies.
Selling in distress is not something that I am really looking at, and being realistic, if selling in distress is really happening, by the time my ICICIDirect account lets me trade, stocks will anyhow be at lower circuit. :-) It is pretty tempting for me to put more money into the market, but there is an element of caution to keep on watching things.

Stocks that I am currently tracking:

1. Accel Frontline: Rs. 60.50

2. Ashiana Housing: Rs. 172

3. Allianz Securities: Rs 58

4. Infosys: Rs. 2016

5. Bharti Airtel: Rs. 759

Labels: Equity, India, Stock

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