Hitesh Parikh’s Call For Market In 2012. Read Patiently.
Saturday, December 31, 2011
Hitesh Parikh’s Call For Market In 2012. Read Patiently.
In the last article we had dealt with the market in 2009 to 2011. It will help you to introspect about your investments and investment style during those 3 years. I am sure right introspection with our market call for 2012 will surely make you a better investor. I wish you all the best for 2012. With my wishes, I will directly deal with my call for 2012.
Our Approach This Time:-
It has been ritual with Destiny Management to deal with the New Year call during the first week of January. We are changing that tradition and we are going to deal with 2012-2014 as a total period and I will also deal with 2012 as a stand alone year.
Now, let me deal with down side first.
Downside in the Market:-
My downside target in 2011 was 13000…as against this market had made a low of 15190. For the first half 2012, I maintain that the market would have maximum average downside of 13000. I am not as negative as the so called research houses are. I will revisit my view only and only if market breaks the maximum average downside of 13000 on monthly closing basis.
Why I am not as negative as others?
Simple, you did not invest as much money in 2011 as you invested in 2009 and 2010. Moreover, you did not sell that much in 2011 also. Am I right? How do I know? I do follow astrology very deeply….but this is not my astrological inference. I have a market data with me….and it says…..
In 2011, trading activity was marked by strong volumes in derivates markets (at record levels), even though the cash turnover fell to a seven-year low, and, compared with % of market cap, it was at its lowest level in history. The share of options trading to total derivatives trading climbed to 75% vs. 68% in 2010 and 52% in 2009.
In short, market was trading through out the year……nobody invested seriously. You may ask….what it has to do with the downside target?
For every sell you need a buyer…..and who are the buyers in the market?
Domestic Institutions:-
They have been the net buyer in 2011. But not much new fund coming to them….they will not have that much capacity to buy in 2012.
Mutual Funds:-
As per the mandate, they are supposed to be fully invested….though they are allowed to keep some cash….but that is not much. They can invest in a big way in 2012….only and only if they have new funds. They will not receive more funds due to market conditions. Moreover, distributors are not pushing their clients as they are not getting incentives as they were getting earlier.
Foreign Institutional Investors:-
You can look them with two perspectives…..they have lost close to 40% in India…..(24% market down and 16% dollar appreciation and they are getting 40% discount for their new investments. This is the only wild card in 2012…..their over all strategy for further investment in India will decide the market movements in 2012.
But one thing is very clear….if they sell…..they will have to sell in panic….and then also they will not be able to offload that much shares as they want.
What Will I Do, If I am a FII?
Let us assume that I am a FII and I am sitting on all the stocks bought and my portfolio is down by 40%. Now, I can not sell more shares as there are no buyers. If I Invest equal money now….I am getting 40% discount. So…on an average my loss will get wiped out.
Now, since I am investing in Indian market…..because of my investments only…market will go up to 19000 to 19400. From this level it is a growth of approx 25% from current level. At this time all media will talk about 21000-22500….I will sell all my shares upto 16000. How about it?
Now, let me deal with the upside in the market.
Upside in the market:-
I am not changing my upside target for 2012 – 2014. It is fixed from 2009…..it is 35000 in the ideal scenario and 45000 in the over optimistic scenario. But for 2012, it can go up to 19000-19400 in normal scenario….FIIs wild card entry will change all negative talks.
You can earn 40% CAGR during 2012-2014 and 25% in 2012.
They say Cash Is King…..you have the cash….so you are the King. How Do I know you have Cash? Simple….You have been sitting on your disposable income through out 2011. You have accumulated good cash in banks, fixed deposits or some such avenues. You are also going to have disposable income every month in 2012. Am I right? If you invest these money now…..with an average maximum down side of 13000….you can play till 35000. For interest sensitive investors….this is 40% compounded growth during 2012 to 2014. For 2012, it works out to 25%.
I know…you are excited with the potential to earn 25% in 2012 and 40% CAGR during 2012-
2014......and you are ready for your next question….How to invest now?
How to Invest Now?
Very simple….if you are married….ask yourself…how did you select your Bride/Husband? Without knowing anything about you….I can tell you that you would have given 90% weight to the Bride/Husband….and in the rest 10%, you would have considered her Family Background, Cast, Horoscope, etc, etc. In love marriage, it would be 100% to the bride. If your spouse is good….your life is good….do you worry about that 10% now?
Same way give 90% weight to the company you are planning to invest and 10% to Market, FII, Economy, etc, etc. If company is doing good business…..in down market also…it will make you happy.
Summary for 2012 Call:-
Market has maximum average downside of 13000.
Market has potential to go to 35000 during 2012-2014 in the ideal case and 45000 in over
optimistic case.
FIIs wild card entry can take market to 19000 to 19400….you can earn 25% from here.
If you invest now….you can multiply your money at 40% CAGR during 2012-2014.
Give 90% weight to the company you are investing. Do not worry for the market.
If you have missed 2004 / 2006 and 2008…..this is your last chance. You can not go back to those years now….same way in 2012…will not come again in your life time.
Once again I wish you a very happy 2012. Have a Nice Time. If you need help in finding out good investment ideas, We are open for subscription for 2012 to 2014……do not miss. Just write to us. We will come back to you.
Live With Passion…Invest With Passion.
Hitesh Parikh.
P/S:- Please visit our blog for previous emails.. http://bestofhiteshparikh.blogspot.com
Hitesh Parikh’s Call For Market In 2012. Read Patiently.
In the last article we had dealt with the market in 2009 to 2011. It will help you to introspect about your investments and investment style during those 3 years. I am sure right introspection with our market call for 2012 will surely make you a better investor. I wish you all the best for 2012. With my wishes, I will directly deal with my call for 2012.
Our Approach This Time:-
It has been ritual with Destiny Management to deal with the New Year call during the first week of January. We are changing that tradition and we are going to deal with 2012-2014 as a total period and I will also deal with 2012 as a stand alone year.
Now, let me deal with down side first.
Downside in the Market:-
My downside target in 2011 was 13000…as against this market had made a low of 15190. For the first half 2012, I maintain that the market would have maximum average downside of 13000. I am not as negative as the so called research houses are. I will revisit my view only and only if market breaks the maximum average downside of 13000 on monthly closing basis.
Why I am not as negative as others?
Simple, you did not invest as much money in 2011 as you invested in 2009 and 2010. Moreover, you did not sell that much in 2011 also. Am I right? How do I know? I do follow astrology very deeply….but this is not my astrological inference. I have a market data with me….and it says…..
In 2011, trading activity was marked by strong volumes in derivates markets (at record levels), even though the cash turnover fell to a seven-year low, and, compared with % of market cap, it was at its lowest level in history. The share of options trading to total derivatives trading climbed to 75% vs. 68% in 2010 and 52% in 2009.
In short, market was trading through out the year……nobody invested seriously. You may ask….what it has to do with the downside target?
For every sell you need a buyer…..and who are the buyers in the market?
Domestic Institutions:-
They have been the net buyer in 2011. But not much new fund coming to them….they will not have that much capacity to buy in 2012.
Mutual Funds:-
As per the mandate, they are supposed to be fully invested….though they are allowed to keep some cash….but that is not much. They can invest in a big way in 2012….only and only if they have new funds. They will not receive more funds due to market conditions. Moreover, distributors are not pushing their clients as they are not getting incentives as they were getting earlier.
Foreign Institutional Investors:-
You can look them with two perspectives…..they have lost close to 40% in India…..(24% market down and 16% dollar appreciation and they are getting 40% discount for their new investments. This is the only wild card in 2012…..their over all strategy for further investment in India will decide the market movements in 2012.
But one thing is very clear….if they sell…..they will have to sell in panic….and then also they will not be able to offload that much shares as they want.
What Will I Do, If I am a FII?
Let us assume that I am a FII and I am sitting on all the stocks bought and my portfolio is down by 40%. Now, I can not sell more shares as there are no buyers. If I Invest equal money now….I am getting 40% discount. So…on an average my loss will get wiped out.
Now, since I am investing in Indian market…..because of my investments only…market will go up to 19000 to 19400. From this level it is a growth of approx 25% from current level. At this time all media will talk about 21000-22500….I will sell all my shares upto 16000. How about it?
Now, let me deal with the upside in the market.
Upside in the market:-
I am not changing my upside target for 2012 – 2014. It is fixed from 2009…..it is 35000 in the ideal scenario and 45000 in the over optimistic scenario. But for 2012, it can go up to 19000-19400 in normal scenario….FIIs wild card entry will change all negative talks.
You can earn 40% CAGR during 2012-2014 and 25% in 2012.
They say Cash Is King…..you have the cash….so you are the King. How Do I know you have Cash? Simple….You have been sitting on your disposable income through out 2011. You have accumulated good cash in banks, fixed deposits or some such avenues. You are also going to have disposable income every month in 2012. Am I right? If you invest these money now…..with an average maximum down side of 13000….you can play till 35000. For interest sensitive investors….this is 40% compounded growth during 2012 to 2014. For 2012, it works out to 25%.
I know…you are excited with the potential to earn 25% in 2012 and 40% CAGR during 2012-
2014......and you are ready for your next question….How to invest now?
How to Invest Now?
Very simple….if you are married….ask yourself…how did you select your Bride/Husband? Without knowing anything about you….I can tell you that you would have given 90% weight to the Bride/Husband….and in the rest 10%, you would have considered her Family Background, Cast, Horoscope, etc, etc. In love marriage, it would be 100% to the bride. If your spouse is good….your life is good….do you worry about that 10% now?
Same way give 90% weight to the company you are planning to invest and 10% to Market, FII, Economy, etc, etc. If company is doing good business…..in down market also…it will make you happy.
Summary for 2012 Call:-
Market has maximum average downside of 13000.
Market has potential to go to 35000 during 2012-2014 in the ideal case and 45000 in over
optimistic case.
FIIs wild card entry can take market to 19000 to 19400….you can earn 25% from here.
If you invest now….you can multiply your money at 40% CAGR during 2012-2014.
Give 90% weight to the company you are investing. Do not worry for the market.
If you have missed 2004 / 2006 and 2008…..this is your last chance. You can not go back to those years now….same way in 2012…will not come again in your life time.
Once again I wish you a very happy 2012. Have a Nice Time. If you need help in finding out good investment ideas, We are open for subscription for 2012 to 2014……do not miss. Just write to us. We will come back to you.
Live With Passion…Invest With Passion.
Hitesh Parikh.
P/S:- Please visit our blog for previous emails.. http://bestofhiteshparikh.blogspot.com
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