Where is the bottom?

Is the bottom around 12700? Or if the government falls next week and Oil goes to $200 I think we might see 9000... or who knows these days :)

But realistically, its a good time to look at your portfolio and keep cash ready for buying over the next few months.

It might be a good idea to buy some good MFs that are invested in a portfolio heavy with stocks you like. Its tough to decide which specific stocks to buy, so I am going the MF way, after making a few investments in some old favourites like Sesa, Aban, RIL etc.

Texmaco & Reliance

Seems to be a good bet in the rail space. They manufacture wagons for Indian Railways and have a good order book. Recent results (Q4 Mar 2008) were superb and sales have doubled over the financial year 2007. At Rs 1550 the stock offers a good opportunity to counter rising oil prices and could be accumulated at every decline (about Rs 1400 would be a good rate to BUY).

Another stock to watch and buy on major corrections in the market is Reliance Industries. Its gas projects will come onstream in a few months and contribute to the top and bottom lines.

Real opportunities

The next destination for investment in the real estate space around Bangalore is definitely Bidadi.

1. BMRDA township project awarded to DLF and its expected that in 3-4 years we will see something come up.
2. Industries already exist in the vicinity
3. Bangalore Metro

Plots are in the range of Rs 700/sqft at present. For a holding period of around 5 years, returns could be quite good.

Watch out for the next correction

The next correction is round the corner. Prepare your buying lists and get ready to pick up some great stocks at bargain prices. This could likely be the market bottom, so it may be offer open while stocks last ;-)

Why do liquor company stocks do well in bear markets ?

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

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?

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.