So we finally had a good Diwali even courtesy the stock market. We hit 5 year highs today and broke the record for daily turnover.
What makes me proud of this is the belief in the run. I was so embossed by reading of reports on the inevitable market crash that all I did was to trash them. In school in a simple lesson we were taught that the break of dawn comes immediately after the darkest hour of night. But in the darkest of predictions on the markets, we forgot some basics. It’s so ironical that investing is a habit and is intended to be cultivated over the long run but is seen as a scratch card where the result must be revealed instantly.
Now justifications on why the rally occurred are being propagated by those who know what they lost. Who cares. Stocks are meant to give you returns and if you have made your money you are at liberty to decide to keep it, encash it or whatever.
This market has truly rewarded investors while exposing the difference between the best and the impacted cos. In this polarization, have stood out some fine cos that remained egged on to their business growth and didn’t spend too much time overpaying analysts to write on them.
What disturbs me a bit now is the same reasoning. When you stand out initially, you could be a loner and thus any company added to a loner doesn’t make a crowd. When too many people collect, a crowd is formed and crowds compel silly actions. We now have swarms of web sites, blogs, investor forum, twitter accounts etc where the same names are being recycled.
Picture this: I invited many of you to post your Diwali picks on twitter. The results are almost the same cos. If all of us are buying, aren’t we being fooled into valuations.
May be yes. May be not. My take is a few scrips despite being great cos are overdone now. They may not fall much or may well fall but don’t seem to offer the same excitement to own them as they did when they stood apart. Remember crowds attract curfews and arson too.
Turning to my picks, I am following a strategy of capital protection now in my decision making as greed amongst many leaves lesser food.
I see the Information technology sector doing well and continue to believe in tech m and Hcl tech as my best picks.
In pharma, there has been a huge run up. I would not like to venture into just any pharma name as if it’s the last journey in town to ride. I see some safety in Biocon and a potential for value unlocking. A great co lead by a great leader and now ready to take off. Product development is a time oriented process and when the gestation is done with, the results can be fantastic. Divi labs also affords comfort in the fact that it has completed its capex and should benefit from that and it’s forex ratio.
I trust the words of mr rajiv bajaj when he says exports would propel his co ahead. I continue to like bajaj auto as also Bosch where a huge capex has been completed even amidst a cost reduction by weekly plant shutdowns.
There is such a dearth of sanitation facilities in india that it does not escape my attention that for years to come, sanitation ceramic cos should do well. Hygiene, privacy, public amenities, population growth, food explosion, contraction of field land etc are all pointers. Cera remains a top pick.
I have avoided reference to many other ideas in my mind for two reasons:
One we all agreed to list 5 picks and I am amongst you.
Two: I encourage discussion on stocks including alerts on negatives or difference of opinion. While it gratifies me to see many followers on twitter and here, it does. Of feel good to see most people as inactive and reading posts for tips.
I don’t advocate naked buying ie without understating the logic as logic alone will guide you. The views expressed are my own and what I am doing. I do not suggest or recommend cut copy paste as each person has a different horizon despite different situations of investing.
I thank all of you who interact and give valuable comments. It’s been a great year of returns and prayers and hard work will continue.
Wish you an enlightened Diwali and much prosperity. In the midst of cloudy Diwali night skies, I shall look out for a new star. : ) be inspired.