3 Factors to Watch Before You Invest Now…
Monday, September 19, 2011
Dear All,
3 Factors to Watch Before You Invest Now…
I thank you all for your responses to my last two articles…..you have liked the last 100 years analysis and also the call about current market. Next logical question many of you have asked is to know…where to invest now?
Before I deal with that, I would like to draw your attentions to a very important market trend I have observed in last 20 years.
Markets:- Flavors of the Market in last 5 Bull Phases.
In 1992, the theme was Cost Replacement…Mr.Harshad Mehta arrived the price of ACC Rs.10000 based on his theory and market also believed him…what happened to the prices of Mazda, ACC and all other companies since then you know.
In 1994, when first time FII investments were allowed, the sectors were capital goods and PSU IPOs. In 1995-96, the market was flooded with IPO of finance companies. The costliest IPO was of VLS Finance at Rs.510 per share. All listed companies started their finance companies…CIPLA started ALPIC Finance. I do not know what these companies are doing now.
1997 was the year for FMCG and Pharma companies…Hindustan Lever, Ponds, ITC, Colgate and Pharma companies were the darling of the market. Since then ITC or
1999-2000 were the year of IT and famous K-10 stocks…..HFCL quoted at Rs.2100 is available at Rs.12 now. DSQ Software, Silverline are difficult to find now. Even Infosys price of Rs.16000 per shares took 7 years and two bonuses to match.
2003-2007 were the years of Infrastructure, Housing, Capital goods & electric goods sector. Just see what is the position of housing and infra companies today?
Lesson From Above…..…Every time market went up, it had a new set of companies and sectors. In the next bull run also the companies and sectors will be new….so, if you are holding shares of companies or sectors who had done good in last cycle or cycles, you may see that they may never move in new cycle. So, EVALUATE your portfolio in the light of current market opportunities.
Media Opinions & Free Investment Advises:-
Take any Media, it will be full of opinions of various research/technical analysts, reporters, editors, brokerage houses, investors and fund managers. All of them have their unique roles and objectives. If you are following them, you must be aware about their roles and objectives. Incidentally, on 1st July, 2011, we had written an email titled….. “40 years of Media Analysis” to bring home the point. (If you want to re-read, just send us an email and we will send you.)
Money:-
How money you want to earn in the next bull phase? This is the most important question, you need to answer yourself. Investment is boring activity….once you do…you just have to wait till your target returns comes. If you do not have big money goals, you will find it difficult to maintain your interests. Moreover, with big money goals, you will love to spend your time and money behind it.
Other important question related to money is…how much money you are ready to Invest? This will decide whether you will achieve your target or not (assuming all other factors are taken care).
I will deal with your question….where to invest? In my next email…till then enjoy.
Thanks for reading my email.
Live With Passion…Invest With Passion.
Hitesh Parikh.
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