The market is not the only entity which is getting chopped off. The after effect, as anticipated, is further erosion of INR. The INR is now at 48.60-48.75 and coming close to 50. I may sound a dooms sayer here but the things are not very rosy and in fact things are slipping out of the hands of country like India. We did not require the outsiders to make mess out of our system. We should also be equally blamed. We have pursued populist policies including loan waiver schemes of the farmers, pay commission recommendation, not taking action while world-wide crude prices were witnessing a sharp rise etc. These all have a serious impact on the overall health of fiscal (deficit) and is going to impact INR, Inflation everything, stock market. The markets are a just reflection of the policies pursued world-over in a globally connected economy.
Now what's next if markets continue to melt like an active volcano erupts and engulfs anything and anyone that comes in the way? Invest in the quality stocks which are offering value for money, how to look for one? Simple, to find a multi-bagger stock or a stock which has intrinsic value please follow following simple rules:
- Single digit P/E
- 3-4% yield
- PEG (PE Growth ratio) is less than one
- No Debts OR Very Low Debts compared to equity
- Management buying the stock
- Always remember, when in doubt, stick to quality. Never speculate...
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
On Mon, Sep 22, 2008 at 1:12 PM, Niteen S Dharmawat
Please read this using the following link:
http://dharmawat.blogspot.com/2008/09/reliance-industries-update.html
Reliance Industries - Update
Reliance Industries is one my favorites. Some of you would recall that I have been recommending this stock from Rs 520 onwards when the feud between two warring brothers were on the street and media was opening fresh can of warms on a daily basis by flashing new breaking stories released by 'good sources' of warring brothers. The entire market during that time was in upswing while RIL stock was butchered to the extend that it became an untouchable stock. Later they reached a settlement and problem got resolved leading to unlocking huge value which I was talking about in my mails. The RIL stockholders were the biggest beneficiaries. They got shares in four companies free of cost. Today RIL is at 2100+ levels and the free stocks (RComm, RNRL, Reliance Energy etc) are doing equally good. This is a return of almost 6 times from the original recommendation.
Now what should we do with the stock with yesterday's 'big' announcement by Mukesh Ambani. One of the conclusions that we can draw is that the company is in a great shape to go to the new levels which means un-parallel growth and solid wealth creation for the shareholders. If you are holding the stock from 520 levels onward (and various other levels when it was re-recommended) then please continue to hold it. This single stock may help you plan your retirement, I am talking about real long term investment!!!
But if you want to buy more then is it the right time to enter in the stock? Should we really want to time the market or intrinsic value offered by the company is more important? The value offered by the company is, as I said earlier, going in the trajectory of un-parallel growth which will be realized over a period of 2-3 years. But the value offered by the market is something under question. So would advice immense caution while making any fresh exposure in the market. Let opportunities go but we should not loss our investment - should be the philosophy of the investment. I am of the opinion that market may come down to 9000 levels due to various reasons, discussed in earlier posting, over a period of next 6 months and that will be an amazing opportunity for investment. However, one can start investing from a level below 12000 thru' a stagger investment mechanism. If you have any questions, then please do write to me or post your comments on blog itself.
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
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