Friday, June 28, 2013

You are invited to a session on Investing

I am taking a two hour session this Sunday in the Bangalore stock exchange - the topic is " Stock picking in Indian markets - the Warren Buffet way" - the session starts at 10 am and the Bangalore stock exchange is just off the JC Road.
So if you are interested and if you are in Bangalore - please do come. It will be a good session - that's my promise.
The session is free.
Please pass this message on to your friends who may be interested.

Saturday, June 22, 2013

My recommendations for investments now:

On 19th June, US Fed indicated that they would end the QE3 by middle of 2014. Ever since then, the markets globally have been in a tizzy. The Indian Rupee crashed to almost Rs. 60 to a USD. Gold went down globally to $ 1200 per ounce from around $1350 per ounce. The Indian stock market fell by 526 points in one single day on June 20th. The Indian bond prices crashed and trading had to be halted on 20th of June.

As we all know, for the past few years, the central bankers in developed economies had resorted to a money printing spree -just to keep their economies propped up. This excess liquidity kept the interest rates in developed economies low and this cheap liquidity found its way into  financial assets globally including the Indian stock markets.

The global investors were riding the proverbial tiger and there was only one way out – to keep on riding or be eaten up. And now the US Fed has given a timeline to end the ride.

So where do we invest now?

My recommendations are as follows:

  1. Equities – For those who are new to equities, you must stay away from the equity market for the time being. If you are into equities already, I believe that you will not make much money in equities till the next elections.  However, there will be opportunities to invest due to the gloom and doom - if one looks at select stocks. For example – TCS should do well as the Rupee devaluation will play to its advantage.  So I would recommend investing in select stocks where there will be opportunities and then stay invested for a few years.  You can write to me and be part of my private equity mailing list where I share my buy and sell activities in the equity markets.
  2. Debt – Long term debt funds are not safe at this situation. I believe with the weakening of Indian rupee, RBI could be forced to raise the interest rates. It is best to keep money in liquid funds or in dynamic funds.
  3. Gold – even though the whole world is looking away from Gold – I am starting to see some value here. If you have gold – hold on to it.  I am not recommending that you buy it now – but I believe if situation in the global markets gets worse in the coming months – then it would be time to invest in gold.

Monday, June 3, 2013

Spring cleaning and my current stock portfolio

One of the reasons I have a reasonably good track record in stocks is because I accept my mistakes and sell without any emotional involvement.

So here I am, selling a few stocks in the coming days – the timing of the sell depends on the market.

I am selling BHEL – where I have made a loss of 19% over two years.  So, assuming my expectations of 20% per annum, I have actually lost 60%. I was hopeful of the power sector story – but the coal scam is unlikely to be resolved till elections time - and I have lost my patience on this one. I have many friends in BHEL and I know it is a good PSU and I am still hopeful that things will eventually do well – and so I may enter this stock again in the future – but right now, I am selling it.

I am also selling Noida Toll Bridge – this is a safe company and it should have shown a ROI of 20% per annum - but has not. I have just made 2% over the past 18 months and that is not a good record. So I am selling it.

Post this sale,  my one year plus portfolio will consist of Page Industires, Havells, Sundaram Finance, HDFC bank, Bajaj Auto, Crisil, Agrotech Industries, Gruh Finance, TCS,  Swaraj engines, Maruti Suzuki,  Dabur India,  L&T, TTK Prestige, Colgate and Shriram Transport finance.  As I see it, all these are good companies worth holding for the long run.