Struggle to make money from stocks

The last week and a half have seen a major period of volatility in the stock market. The sub-prime crisis in the US and its impact on major banks, Financial Institutions and Hedge funds had a major impact on liquidity and caused a downfall in sentiment world wide. This crisis showed how most major world markets are connected, primarily through the money invested in these markets. India has a sizeable dependency on Foreign Institutional Investors, and a fair amount of their money is in turn composed by US funds and Hedge funds. When this crisis broke, and sentiment was down, there was also a big pressure on redemption, and to pay out redemption, there was heavy selling in various world markets, including the Indian market.
So, the level of volatility displayed, with the market either showing big up or down jumps caused a big scare in the market. And that is what the market has been doing now for some time, either jumping way up or way down. So, it is tempting to invest say when the market is down, but you can never time the exact down of the market. I am right now holding still, trying to restrain myself, although I am investing a bit in some Mutual Funds such as Franklin Flexicap and SBI Magnum, and looking at shares such as Era Con, Reliance Industries, Walchandnagar, etc that have fallen.

Labels: Equity, India, Mutual Funds, Stock

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Normally I don't update within a day of a previous post given that the market will have been closed and there is no change in stock positions over the week; however, I am somewhat worried over what I have read so far in the past 2 days.
Now, for the current rise of the Indian market, there are several reasons, all happening at the same time. India is finally growing, with a good >9 % rate, next only to China; there is a massive amount of money pouring in from FII's who want to get into a good market and this money in turn is also being sourced from some hedge funds; there are more people in the Indian retail market who want to invest, either directly or through Mutual Funds; and even with political warts, scandals, left pressure, the Government is overall shepherding the economy towards more openness and greater role of the private sector.
Having said all that, all of the above factors will be true except for the factor about funds brought in by the FII's. The sub-prime collapse in the US market, which is also impacting funds held by banks and hedge funds due to the inter-connectedness of the complex financial instruments in the US, is likely to suck out the liquidity in the market for some time. People are worried about where this will go to. Now, the movement could be purely localized in the sense that some firms holding sub-prime mortgages in the US market could go under, but overall money flows continue. Or, things could go haywire and with the inter-connectedness of the global markets, the quick upward march of the Indian market would stall or go onto decline. Most people are predicting that Monday will see a further fall in the Indian market due to the decline of the Dow Jones on Friday, in a continued impact of the sub-prime scandal.
Now what do I believe in ? The India growth story is real, but so is the reality of the liquidity driving the market movements. Maybe a time to hold, and if falling, and if willing to take a risk, to buy fundamentally strong companies such as Reliance, Bharti and Pantaloon that have fallen. I am waiting to decide on Infosys, so not targeting that now. But, the basic mandate would be to be careful and not get excited by stocks falling in anticipation of buying more.
A risky area that I am looking at (and have bought some of) is the area of green technologies and carbon credits, so have bought some of Praj Industries, SRF, and Navine Fluorine. All risky buys except for Praj, which is slightly better. I would be looking at more companies that are getting into the green area, since that should be a good growth area in the future.

Labels: Carbon Credits, Equity, Future, Green, India, Mutual Funds, Stock

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What a week. The sensex took its 3rd biggest fall this week, of 615 points; a very scary day. And then it has bounced somewhat back after that. This level of volatility has been seen in the Indian market before, but it still can be very nerve-wracking for the retail investor. Of course, the opposite is that a regular investor is pretty much used to all this and will take such corrections in the stride, in fact equating such corrections with the need to have a regular corrections when the market has been climbing so as to let off steam.
Of course, one thing that can never be said enough is the need to be very careful about tips. Investing in speculative stocks is risky if you are not paying regular attention. Further, if enough profit has been made in a stock and you feel that based on fundamentals, it has reached where you wanted to, take the profit out. Invest it in FD's, MF's, or even for things such as increasing insurance on you. Don't let greed overtake you.
I have a smattering of some stocks that have not get mauled too much in the recent carnage, and this makes me want to buy more of such stocks, these stocks being: Adhunik Metaliks Limited, Ashiana Housing, Hindustan Constructions, Ion Exchange, JMC Projects, KLG Systel, Reliance Petroleum, Walchandnagar Industries.
I am still a believer in the Indian growth story, but need to watch what is happening in global indices. If liquidity comes under strain, the effect will also be on the Indian market.

Labels: Equity, Fixed Deposit, Future, India, Mutual Funds, Stock

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The US market sneezed, and the rest of the world had a cold. Over Thursday and Friday, the US Down Jones and NASDAQ both had big falls, due to a combination of bad results, and fears that the mortgage crisis will take its toll on overall credit. Credit is the most important reason for the stock rise in the Indian market, Chinese market and numerous other developing markets. If the investments by FII's show any sign of collapsing, then things can get sticky for the Indian market. Indian FI's can be very hesitant, given that their base is Indian investors, who get very skittish when the market becomes volatile.
Overall, with a 540 point drop in the Indian sensex, things suddenly turned red after a decent upturn for the past 2 weeks. Things are somewhat scary now, although there is one good news that Indian companies overall gave a good earnings report. So, unless there is a major credit problem or liquidity crunch, the market will overall keep on gaining. So, keep a watch on stocks, sell the ones that seem to have gone up tremendously without a corresponding gain in fundamentals, and overall be watchful. Keep a SIP to invest part of the money in Mutual Funds, and also, for safety's sake, use these times of high interest to get some good Fixed Deposits.
Some stocks that I am currently tracking:
1. Era Constructions: Rs. 532
2. Ion Exchange: Rs. 162
3. JMC Projects: Rs. 285
4. Trigyn Tech: Rs. 31
5. Nirlon: Rs. 70.50

Labels: Equity, Fixed Deposit, Future, India, Mutual Funds, Stock

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The stock market shows no sign of letting up, driven by a global liquidity charge and further driven by the promise of a continued high growth rate. So, even though we see corrections, the market remains on the promise of a continued growth, to reach 16,000 sometime this year. However, with the volatility of the market being what it is, a correction can happen anytime. The big question is about the extent of the correction. If it is a small correction of some few hundreds, then it will be shrugged off. However, we have seen in the past that slightly major corrections see analysts jump on the doom and gloom platform and quickly target 3000-4000 point corrections.
What am I doing ? I am reviewing my stocks to identify those that are slightly junk, or not based on fundamentals and liquidate them. I am also encouraging family members to diversify funds towards fixed deposits, getting 10% is not such a bad deal for some amount of money. Also putting money in my regular Mutual Funds such as HDFC Prudence, Franklin Flexicap, SBI Magnum, SBI Taxgain, and Reliance Equity Opportunities Fund.
Am I putting fresh money into the market? Yes, I am. I have a long term belief in the market, and as long as I am convinced in the fundamentals of the stocks that I am investing in, then I will continue to put money. I was reading some more about Reliance's quest for further oil and gas in the blocks that it holds for exploration, and it may make sense to continue investing in Reliance for the long term. The problem with Reliance is that it is very difficult to think in terms of selling the stock.
Stocks that I am currently tracking:
1. GSFC: Rs. 205
2. Era Constructions: Rs. 540 (with some care)
3. Schrader Duncan (ICICI Direct code SSDUNC): Rs. 309
4. Garnet Constructions: Rs. 58
5. Voltas: Rs. 150

Labels: Equity, India, Mutual Funds, Stock

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So finally the stock market has beaten the previous doom-sayers and crashes, and reached it's all time high, crossing the previous level of 14723. Now, a lot of retail investors are afraid to enter the market, worrying about a crash. I want to liquidate some of the stock that has not moved much over the past few weeks or months, so am going to be selling some stock such as ITC (I know, long term, but in one of holding, it has not moved), Accel Frontline (a promise stock, but somehow not getting a good feeling). Maybe it is time to also move some more profits to Mutual Funds (my favourties being SBI Magnum, Franklin Flexi-cap, and Reliance Equity Opportunities Fund - although I am open to more if somebody can suggest some good sector specific or diversified funds).
IFCI has been a good buy, having bought at 30 a few months back, and now has climbed to almost double that, with potential of going higher due to news of it planning to sell a stake at a higher price. Overall, market seems to be looking good, with good integration of Domestic and International Mutual Funds. On the policy side, the Government keeps on making right noises about reform, although whether we will see some good moves is uncertain, what with the left being a roadblock.
Looking to carefully evaluate cement stocks, they seem to be making a move upwards. Am also evaluating stocks that are 'green', that is, stocks that can make a benefit from the demands of overcoming global warming.
Stocks that I am currently tracking:
1. Yes Bank: Rs. 180
2. Praj Industries: Rs. 480
3. Reliance Industries: Rs. 1680
4. Reliance Petro: Rs. 114
5. Era Constructions: Rs. 395

Labels: Equity, India, Mutual Funds, Stock

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Today was a day when the sensex moved up by more than 100 points, in fact by 133 points, to close near an all time high. It is above 14,500, and there is an incredible expectation in the air that a correction is due. People are delaying purchase into the secondary market, a number of people are actually doing profit booking so that they do not get caught when a correction happens. On the other hand, and this gets interesting, there are a number of people who are saying that the upmove also comprises of a movement by midcaps and such movement may be sustainable. No one knows what will happen, but the watch word for now is to be very careful and invest only when you are sure about the stocks that you are investing in. One good recommendation is to use profits to pay off loans, put into FD's (some of them offering upto 10%), and to move into more mutual funds. Of course, for those who have got the stock market taste, investment into the secondary market will continue.
Some of the sectors that I am staying away from is hotels, sugar and textiles. I am fairly invested in engineering, real estate and banking; although I could invest more into banking. As far as the stock market goes, I will continue to invest, although I am thinking of investing some more into these 2 mutual funds: Franklin Flexi-cap and SBI Magnum Global. I have been advised to do a bit of investment into some sector specific funds in addition to diversified funds, but I hesitate a bit over this.
Some stocks that I am currently tracking:
1. Nesco - Rs. 1185
2. Alphageo - Rs. 330
3. Era Construction - Rs. 370
4. IVRCL - Rs. 352
5. JMC Projects - Rs. 273

Labels: Equity, India, Mutual Funds, Stock

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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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For a fair amount of time, the Indian stock market sensex has been hovering in the 12000-13000 range, some days advancing and other days falling down. However, in the past 3-4 days, there has been a rally and the sensex has crossed the 13,000 level. In fact today, the sensex climbed by around 350 points. This increase though is accompanied by low volumes, and there has not been a corresponding increase in the mid-cap and small-cap indexes. This is consistent with past behaviour where large-caps get investor fancy, and then as the bullish feeling spreads, mid-caps and small-caps start getting investor interest.
Mutual funds have been a major disappointment for the past 1 year. If I compare NAV's from before the May 2006 crash with current values, they are roughly the same or even lower; this was actually more of a shock because the selling point about MF's is that they are run by experts; however, if they flat-line in times of stress, where is the expertise ?

Current stocks that I am tracking:

1. Atlas Copco - Rs. 729
2. Reliance Capital - Rs. 653
3. Tata Elxi - Rs. 285
4. Trigyn Tech - Rs. 27.80
5. Allianz Securities - Rs. 55.50

Labels: Equity, India, Mutual Funds, Stock

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Why would people need to go to the amusement park ? All they need to do is be invested in the stock market. There are times of elation, when a stock you just bought jumps by 10%, times when the swings in the market make you think about a roller-coaster, and then there is the fear when you see the market opening by 400 point down, the same when the roller-coaster is dropping after being at the highest point.
I am a believe in the Indian story, so am investing in the market. However, after reading a fair amount about how much the liquidity story (global) fractionally gettting pumped into the Indian market is pushing up the market, there is some doubt that I have started having. Are we truly at the end of a boom phase, and will the Indian market be very disappointing ?
Something that has truly disappointed is the 1-year peformance of the mutual funds. These are supposed to be experts in the market, and yet so many of these funds are approx at the same NAV as they were last year. I might as well have remained in the primary market. So today, for the first time, I sold 2 of my mutual funds, the SMILE fund from Sundaram, and the SBI Emerging Business Fund. Till now, I have looked at the mutual funds as a sort of additional retirement scheme, I will keep on investing money in mutual funds as a percentage of total investment, and this should become a lump sum when I retire.
Some of the stocks that I have bought in the last few days have been Nirlon, Allianz Sec, Era Con, Mahindra Gesco, Ashiana Housing, and a couple of other construction and engineering stocks.

Labels: Equity, Future, India, Mutual Funds, Stock

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So more fireworks in the new year. Market suffered from immense volatility, going down and then tremendously recovering in 2 trading sessions to the extent that it has reached an all-time high.
Talking with several retail investors reveals that there is a lot of concern about whether the market has moved up too high too quick. I personally believe that it is good to be very cautious, especially when investing in companies from a speculative touch rather than based on fundamentals. Even more so if one is investing in penny stocks; when they go up, they can go up very quickly and very high, however there is a very good chance of getting caught when the stock starts declining and volumes go very low. So, be careful if you are playing a risky game. If you want to play the speculative game, keep very clear targets and keep on removing profit from such stocks.
Some stocks that I am tracking:
1. Nucleus software - Rs. 685. I have already made some profit on this stock, but am currently evaluating whether to buy more
2. Donear Industries - Rs. 216
3. Hikal - Rs. 394
4. North Gate Technologies - Rs. 1015

At this time, I am also looking to deploy some of the funds from profits into Mutual Funds. This will help me to reduce the risk to a certain degree, of course not completely since they are also equity based.

Labels: Equity, India, Mutual Funds, Stock

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Well, if you are still with the Indian stock market today, you are a brave person. The last few days have seen a renewal of the gyrations of the stock market, enough to make you dizzy. So you had 2 days having massive falls, followed by some climb-backs, and then the incredible spectacle of a local country specific decision (a move by the Thai bank to curtail movement of currency out of the country) making the Indian sensex fall by upto 400 points, not a small thing.
I have been watching stocks doing this gyrations, and the only plus point is, such changes breaks me of the habit of watching stocks at frequent intervals. No point in frequently watching the market if you just see things falling into the red.
What to do now ? I will continue to be involved in the Indian equity market since I do not see any alternative. Equity remains a good option for a long-term growth option, as long as there is a certain amount of care taken. What does this mean ? Keep invested in good stocks, do not get too speculative in risky stocks. I was not too sure about Mutual Funds. I have a fair percentage of my funds invested in MF's; but their performance in a crash is not so good. They crash and burn like any other part of the market, you would expect investments controlled by highly paid smart market wired people to be much more savvy about the market.
Some of the stocks that I hold that are fairly stable (they fall, but do not crash significantly this time) even in this crash are Ansal Housing, Ashiana Housing, Era Constructions, IVRCL, TRF, Walchandnagar. I remain invested in these and some other stocks.

Labels: Equity, India, Mutual Funds, Stock

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It looks like investing in the India stock market seems to require ice running through one's body instead of blood and a very steady heart. We have had a sudden crash happen over 2 days a couple of days back, and you suddenly have experts coming out of the woodwork claiming that they forecasted the crash. I would not think that this is something unexpected, given that every body has been claiming that there needs to be a correction, and that it could happen anytime. So there is not a great deal to claim credit for. And this is not the first time that it has happened, a crash has happened enough frequently that it is no longer unknown.
In my case, the viewing of the portfolio after the crash of the second day left the market down by around 1000 points was painful, but I expected to see the values that I saw. It has not fully recovered, but the last 2 trading sessions were good, and prices are slowly recovering. It helps that I have weeded out some of the more risky ones, and even the mid-caps that I know fared decently (meaning that they did not drop like a stone).
What has not recovered is overall condition of Mutual Funds. They are fairly down, and will take a few more sessions to recover. This is actually something that is not so clear to me. I would expect the Mutual Funds to fall less and recover faster than my portfolio, but that does not seem to have happened to my portfolio. Maybe there is something that I am not understanding.

Labels: Equity, India, Mutual Funds, Stock

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