panch-tattva/post result…bhel

BHEL @1655 (260508) gets 886 panch-tattva points and this stock shoul be picked up over time for long term, mostly on down days.

panch-tattva talk…nifty falls

Friends,

 

The Nifty has fallen for the third consecutive day and in a big way. This has come back of the world markets behaving poorly on friday and also today (closing at 4885 ). The US markets would remain closed today but the IT scrips have gone up substantially today after opening lower. This conveys a fact that Indian companies which have global operations and have reasonably good scope of continued business growth would remain darling of the western investors. It is because the interest rates suffered for carrying investment is lower for them than for investors in India. Since the rupee has weakened more sectors will be looked at the investors abroad , again for the simple reason that while we may find the PE of 20 rather on the high side , it will be just a most comfortable level of discounting who can borrow internationally at around 5% p.a. interest.

 

Precisely for the reason given above the Indian markets are falling by a lesser degree than veru many other emerging markets. The fly in the ointment is the govt’s topsy tervy policies and the elections ahead. However, the elctions would be a cause of monetary expansion too as has been seen in the past. This happens due to govt’s spending as well as the expenditure by the parties and big polititians. Favours do not come for free in India too as in USA. There they have organised mechanism towards funding for elections , here we have Indian ways. There was a report that money flowed like water in Karnataka’s recent elections and big catches of money fell in hands of officers’ of Election Commission.

 

The oil is spoiling the party but a serious investor has to weather such things which loose importance over time. I would just ask a question that when the metal prices have gone up by two to three times , why should it matter that the oil is higher too. The relative pricing remains the same. Further , there is good elasticity in demand for the oil. Of course on e should be cautious in selecting the sectors . The sectors like auto-sector should be shunned for the time being. Telecom , basic infrastructure, pharma, It, Tech, cement, steel , entertainment and banking sould not have to suffer for oil related worries . Domestic oil sector companies are victims of govt’s policies and have a tremendous potential to deliver profits. The realy sector may loose further ground for it has a lot of stock to offer to buyers who by the way now have an option to conveniently invest in stocks which have become pretty reasonable in price terms. The stocks have been taken to be the best safe-guard agaisnt inflation and history of investment returns and values endorses it. Why then the investor should be behaving irrationally and shunning stocks. The answer lies in the emotional make up of the collective psyche of investor class.

 

The RBI saw reason and did not go for revision of the bench mark rates. This is a good sign. Should the inflation come down there would be down ward revision only. Supposing this does not happen then the world money would have reason to flow towards India.  Where would it get parked, you may yourself make out.

 

In the end I would say that it is such time that requires some active participation  and a foohardy attitude. Even if you suffer some notional losses on your investment , it will be rewarding you very handsomely at some time in near furute itself.

 

All this , ofcourse , is subject to monitoring the future direction of economy in India ( not the market) . If stays on path as it is presently doing , there is no if and but.

 

HariOm,

krsnaKhandelwal