Thursday, December 11, 2008

Dear Friends,
Some of my readers aren't happy as I am writing something out of stockmarket.
I know you all are eagerly waiting for my writing on Indian Stock market but I think wee are still not out of woods and hence I am remaining dorment on our market view.
I think still we can see a down trend and the best time would be to buy will be after Feb 09.
Sure the Oil has come down,Inflation is getting down to single digit,commodities are down and are at 4-5 yr low.
These aall augurs well for our economy but the dent that has been created due to FII selling and world slow down is taking the toll.
One thing is clear and that is , if world economy is slowing down then market will take time to have a come back.We can't ignore the world economy.Ofcourse ours is a domestic comsumption economy but still the money comes from overseas as well.Like say the people working for IT co , at BPO centre etc...they use to get good salary.Now if the BPO works is going to get trimmed down then it is obvious that the consumption is going to be slowed down as well.
I just read on CNBC USA that Dow Chemical is also laying off some 5000 employees.These are hard time to go through and one need to be very stock specific.
The winners will be different.Mostly the stocks which took the lead in last bull run will not be the front runners this time and we need to find those sectors and stocks that will give us multibagger return but one thing is clear about one sector, which seems to me as an evergreen sector, and that is Ore/Mines sector like Iron Ore, Copper mines , Energy ingrediants sector like Coal,Coke etc as it is obvious that whenever the world economy will again become good there will be demand of commodities and hence again Iron ore, Mines,Crude will go up......
These sector is going to be an evergreen sector for decades to come as without that no raw material is made and as demand increases the prices goes up.
But I think we have still got the time to write and discuss on stocks and sector.Let the market stabilize.The valutaions has become compelling or so it seems like that.They may go below what it is now.
But rest assured I will write as and when I feel like writing on stock market.I have always thrived on helping small investors and that has become one of my aim that I have targetted.


  1. dear Rajeev,

    I wants to ask abt. assam company i bought 4000 at 15. Today its in UC. Wats the future prospect?

    thanx in advance

  2. Here's a note on a lighter side.


    Why your stock has gone down !!

    It was autumn, and the Red Indians asked their New Chief if the winter was going to be cold or mild.

    Since he was a Red Indian chief in a modern society, he couldn't tell what the weather was going to be.

    Nevertheless, to be on the safe side, he replied to his Tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared.

    But also being a practical leader, after several days he got an idea.

    He went to the phone booth, called the National Weather Service and asked 'Is the coming winter going to be cold?'

    'It looks like this winter is going to be quite cold indeed,' the weather man responded.

    So the Chief went back to his people and told them to collect even more wood.

    A week later, he called the National Weather Service again.
    'Is it going to be a very cold winter?'

    'Yes,' the man at National Weather Service again replied, 'It's definitely going to be a very cold winter.'

    The Chief again went back to his people and ordered them to collect every scrap of wood they could find.

    Two weeks later, he called the National Weather Service again.

    'Are you absolutely sure that the winter is going to be very cold?'

    'Absolutely,' The Man replied. 'It's going to be one of the coldest winters ever.'

    'How can you be so sure?' the Chief asked.

    The weatherman replied, 'The Red Indians are collecting wood like crazy.'

    Friends, this is how Stock Markets work.

  3. Dear Ahmend,
    Assam Co is good but the crude oil prices has make it look bad for the time being.
    Future prospect will become good when crude will again go up....

  4. dear rajeev,
    Thnx for the quick reply


  5. Rajeevji,

    Atleast, I am not complaining about your links and articles on things other than stocks!
    One general stock query. normally, how many times the book vale does a stock normally have to trade to classify it as under valued or over valued?

  6. Hi Ram,
    I am not at all concerned about any readers complaining about me not writing about stock market.I know what my readers must be having in mind.I have given almost all liberty to write whatever they wants to except personal attack.
    Well,I think this is the best time we should ask and discuss about valutaion etc....
    Generally speaking if the stock is below BV is a good buy and can be called undervalued.
    And if the stock is quoting over 2-3 times of BV can be called overvalued.
    But it all depends on growth and growth is related to earnings,future earnigs.Stock market gives sometimes bigger value on BV and it may even quote even much much higher then BV.But that can happen only in BULL RUN.
    But as soon as BULL market turns to Bear market all this discounting get vanished.
    But if stock is quoting at .5 of BV and below it definately gives level of comfort......
    I think the present debacle has given us a great values to look at.
    As said there is no TOP in Bull Market, it is equally correct that Bear Market has no bottom.
    Every bottom people thinks get broken.The end of the bear market is when people stop thinking of stock market and that is the time investor need to think about buying....

  7. Thanks very much Rajeevji.

    I would like you to put your old post on "how to pick multibaggers" or something like that( not sure of the title ) on top of your blog as a permanent article, so that people can gain from such wisdom.

  8. Hi Ram,
    Let me give you one pick of mine and that too my favourite....on BV base.....
    India Glycols's BV is 173 and is availabloe at just Rs.69.00 and hence it is available at even less then .50 of BV.
    I will only say that if someone buys India Glycols now it may go down further but it will definately touch atleast 173....i.e the BV ...price means it should quote at 1:1 ratio with BV...
    When that can happen I can't say but it will happen that I am sure about it....