Tuesday, November 4, 2008

Market is up by 3000 points from lows.....

We have seen a "V" shape bounce back in our market.I have written bounce back because we may be not out of woods still.But seems 7600 bottom should act as a good resistance.
Let us think how is India's scenario.
According to me our growth is intact.I can't believe that our growth is hampered and will not come in years to come according to what some use to have a view.
There is no reason how the infra sector,Agri sector will not grow.There is still lots to be done.Our roads,Railways,Agriculture needs lots of capital investment and lots of investment is still to be done.Maybe due to higher int rate and CRR hike in past money is not coming cheap but that scenario is reversing and we should be back at 5-6% Int rate and less inflation around 5-6% within a year.
I had written many times here and I write it again that the prices we are seeing is because of FII's selling.Agreed that economic growth can slow down to 6-7 GDP but still we are much much higher then any other countries in the world except China.Atleast I can say that if Jan 08 prices were inflated one and they were in excess of 40-50%, then prices which are just 10% of high is also not acceptable.Yes, one may say that what makes the difference if I say unacceptable, they are there.But many prices has gone down even by 95% from high even though the results had come good.Hundreds of stocks are available at half the BV and many are available at 1-2P/E.
As I wrote this is a life time phenomenone that such a credit crises has happened and hence it is a life time opportunity as well to buy stocks as well.
I personally believe that those having even 3-5 lacs will make a FORTUNE IN NEXT 2-3 YEARS.The return can be as big as 1000% , means 10 times from the current prices.The credit crunch is not going to get eased so soon and every rally will be met with selling.But actually I am seeing a different scenario in next 2-3 months , viz after Feb 2009...and it can start even now.
The general feeling uptill now for investors was SELL ON EVERY RALLY but now those who have money should be buying at every fall.These are known as smart money.Those are rich with CASH.New breed of investorss will come and they will take new position. These has happened in every new bull run.

But it is for sure that we are going to bounce back sooner then later.Atleast I believe that it can't be 10 long years of hibernation...Indian market has never remained in Bear Phase that too long..that is too long a period.Many are comparing our bullish run with Japan but that is also not comparable.Japan's Nikkie was around 2000-3000 when the bull run started but went on to make 39000!Even many are comparing with housing bubble of ours with Japan but that also seems to me not possible.There is going to be some price correction in Real Estate and we are seeing them already but I am atleast not seeing the rerun of Japan Asset disaster.We still have a long way to go in comparision to Japan.
According to my experinace we have seen much bigger percentage upmove then we have seen in recent one....In 982 sensex was 370 and from thereon we have made a high of 4565 in Harshad Mehta Bull run in 1992 .i.e. in 10 yrs.That was a 1133% jump.While from 2800 in 2003 we saw a Bull run of 21k that is 650 %, means if we go by the history then we should end at atleast 31k and not less which is atleast 1133% from 2800 which our sensex made a low in 2001 when the Twin Towers of USA were attacked and were annihilated by extremist.That is far far lower then the previous one.Well, all these statistic doesn't matter to me.These are all figures and I personally do not put much weightage on all these , but this is for those who think like that.I am just gicving them the figures.
There is where the Charts comes.The Fibbocini levels.It says that market use to make a bottom at 61% level of the previous high.But it made a low of 7600 which is 63.8%! Now what new taregts technicals gives I would like to know.It has breached the 61% retracement.Now what! That is broken...Someone has send me a list how much stocks were borrowed from FII's to hammer individual stocks.e.g In ICICI, borrowed stocks and get hammered is over 1 cr shares.Now one need to think what can be other figures for other stocks and what can happen if these shorts whenever they will get covered.Maybe market broke the Fibocini levels of 61% and hence they must be trying to say that we will imbibe Japan as it also did the same.Time will only tell that....
As I have written here in past that we can see more good growth not before by June 2009 as I think that much time will be taken for the economy to bounce back for Int rate to come down ,CRR back to normal, Inflation back to 5-6 % etc.But as I have been writing here that market use to discount 6-9 months ahead, I can say that market is discounting next June 09 qr results in a way that world is going in for a recession and that is already discounted....and that is what RJ has spoken at Diwali meet along with SS and SA.
Many can say that it was FII's money that is why we saw a Bull run.Agreed .But they have pulled out some $8-9 bn.Means we need $20 bn to surpass the previous high and that is no big deal for India.When $1500 bn is lying dorment in Swiss Bank and the saving rate is highest in world , just 1.5% of Swiss money can propel our market to newer highs and hence I think for $20 bn investment in our market domestically is not a big deal. We actually don't need FII's.
Well,I have recently bought Gas for $2.13/Gallon in USA for my car .I very clearly remember that the highest price I paid for Gas in South Carolina was $4.59 when I came in SC 3 months back and that too in state where the Gas prices are almost the lowest in entire USA.So the gas in America is down below 50% and that makes sense.Makes sense in the way that if Gas prices are down by 50% , means prices of Milk and grosseries will come down and it has already come down.Milk which was at one time was $5/gl is now at $3.39/gl.That is how America's politicians works and how FED decides.This is going to help the US economy in great way.The consumption will remain in tact now they will have to deal with Hosuing sector debacle.But with $700 bn bill passed the credit crises should ease a lot once the money are poured in the system.People forgets that US has starlwarts like Warren Buffet and likes of Bill Gates who always think for the betterment of America.Their advice will and should come handy whoever wins tommorow.
Warren Buffet has already said that those having Cash will be at loss.This the time to buy Dow stocks. I can will only say that those predicting of US economy falling down can prove wrong.
People are still sceptic of 1929 scenario but no one know what happened in 1929.I have written this many times here.Vallabh Bhansali also said the same in his lastest interview.
I suggest to read Valabh Bhansali interview again and again and also the Diwali interview of RJ, SA and SS .Read them carefully and try to digest what all are saying and try to think whose thinking is rationale.
My thinking goes with VB and RJ.
Rest is your calls.
I am not a Pundit.I am here to share my views.I would only write at the end of my post that just try to reread my old post on CRR hike and Int rate hike, RBI Policy and my post on "Short selling is another name of insider trading" and try to see whether that made any sense.....Just go back and see what I have written in past.
I had proved wrong in predicting the market direction in last 7-8 months.So take your own call....


  1. nobody is right all the time. U r doing a good job. I have meticulously been investing at all dips. However i missed on my last instalment of investment which was going to be my biggest.
    Now i guess i have to wait for the markets to go down again. Rajeev do u think we mite go back to 8000 again or would it be prudent to invest now itself . Also what do u think will be the level from which markets mite start going down again ??

  2. Rajeev,

    Can we add madhucon projects now? Is there any change in fundamentals?


  3. On the one hand, the efforts taken by our PM & FM towards easing liquidity pressures in India are re-assuring. But there is lot of fear. The efforts being taken by India like easing liquidity, cutting interest rates and also expectations of real estate crash/correction are ominously similar to the ones that existed in / taken by USA in Sep/Oct 2007. Is India a year late in having its own crisis like that of US? I guess so and am fearful of longish recessionary trends in India.

  4. Meetesh,
    I think we have made a bottom of 8000 and I don't see that bottom tested again.But as you rightly said that no one can predict anything perfectly.Can't predict at what level market can correct again.But seems these 2 months should remain good.
    Scores of my stocks I have written here are at 90% down from high and they are good buys because I feel the fundamentals are good.
    As I have mentioned "market discount 6-9 months ahead and market is alreday discounting June 09 qr nos." This has a great meaning.Try to understand what I mean to say.
    As soon as Obama wons the presidential election he is going to take some stringent and fast stpes steps to uplift the housing problem and economy.He is almost ready with the blue print and if the credit crisis eases as soon as he gets elected then we can see better stabilisation in overseas market and that can also give us some respite.

  5. Dear Siva,
    Madhucon Project is definately looking good.It is worth a look at this price.From 900 to 50 is big big blow for a co having cash reserve of 700 cr and few thousnad crores orders in hand....
    People are thinking all these projects are going to end and economy is going to stand still.But that cannot happen.
    900 to 50 is not the correct price.It should be higher.That is my view....

  6. Dear Ram,
    Well, I can only say that those who predicted 10,000-11,000 sensex like Shankar Shrama also didn't know that it will tank to 7600.The reason is according to them OIL was the devil then and not the subprime crisis.
    Well, I would not like to debate what will happen in next two years......

  7. dear rajeev,
    hi, as long as u r bullish on market im not worried about corrections.i found in disclosures section of bse that RJ has aquired 500000 shares of aptech.he said he is bullish on IT.what do u think

  8. Dear Rama,
    Following me can be injurious to your financial health as has been proved in last 8 months.
    I have been proved wrong all these long months and every other else has proved right.
    Please don't go by my past record.
    All my calls has been 90% down and investors are bleeding all the way.
    The only thing I can write here is that I have not sold a single stock in this carnage and I am holding it for next 3-4 yrs.
    But again looking at me can be a foolhardy thing.
    What I can say is I have never misguided my followers deliberatly.Maybe I have been not able to see the financial crisis as much as the experts here and elsewhere were able to see and I salute them for that.....
    The only thing that I would like to write is that they were so sure of 10500 but they never spoke of 7600 and there they went wrong in big way.No one is speaking about it...
    I still believe that whatever I have recomd here are good fundamentals stocks and one can rely on that, but as I wrote ealier the holding period will go up to get multibagger returns.
    I suggest everyone to try and gather money to average stocks they bought high.The price has come so much down that we need to average them if possible.I think next 3-6 months can give us good opportunity to buy some great stocks at just throw away prices.
    Aptech is RJ's company.He will again take it to new highs.

  9. well written,rajubhai

    i have been adding regularly in all dips and yes it is very bad i mean my portfolio.

    shall be now adding maducon,and averaging all other stocks,just wanted to know shall i average innocorp also.



  10. Dear Ramesh,
    I will only say to my fellow readers that my portfolio is down by 66% and I am still holding on it.I am confident that it will give me great returns.
    Focus on stocks that have great earnings and great future.This combination is now easily available.Try to find stocks which I have also written here with great eps last qr and were battered down due to distress FII selling.
    Market use to discount future 6-9 months earlier and hence we are seeing the slow down prices and results of June 09 qr.
    The moment market realise that earnings can come good in a perticular qr it will discount it 6-9 months earlier.
    That's all I can suggest.
    Hence try to find stocks which are down by 90% from the highs and that is not difficult.Many are my calls as well.
    I think all knows that and must be reading the bse site to see the june qr and sep qr results....

  11. Raima,

    How to find the disclosure section in BSE? I tried and failed to see it.