Monday, March 31, 2008

Why do liquor company stocks do well in bear markets ?

Because investors who have lost money need to drown their sorrows :-)

Monday, March 17, 2008

Bunch of overpaid jokers

Why do these so called equity analysts and fund managers have jobs? They are employed using our money to tell us when is the best time to enter or exit the market or make such calls on our behalf. AMCs charge a whopping 2+% per annum in management fees for equity mutual funds which go into the salaries and perks of these characters.

And what do they do to earn this money? Parrot the line that everyone in the market who is worth their salt knows anyway. Recommend infrastructure stocks when they are at PEs of 20-30 and paanwaalas and their aunties have already bought them. Say that the market is strong and will do well in 2008 when the subprime crisis was looming in global markets. Put out research reports on over-researched companies like L&T and NTPC. Do they deserve the money they are gobbling up?

Saturday, March 15, 2008

Medium term strategy

There is unlikely to be any spectacular recovery in the markets. On every bit of bad news, there is likely to be severe correction which might take the Sensex down to 12000 or below levels. However, volumes are thin and it means that shares are moving from weaker to stronger hands.

The strategy for the long term investor is to identify a list of good stocks (might be some from the existing portfolio which are beaten down) and buy in small quantities on major falls in the market. My sense is that this phase will last atleast till July and post that, we could see some signs of recovery.