Forget Sensex 41,000. The Big Investing Profits Are Still Ahead...

Dec 24, 2019

Tanushree Banerjee, Editor, The 5 Minute Wrapup

The Indian cricket team recently won a well-contested series against the West-Indies.

Many pundits have already offered their analysis but I think the reason we won is down to something simple: We have a very good team, a well-rounded team.

But that was not the case in the 1990s.

The team's fortunes depended on the brilliance of Sachin Tendulkar. So in matches where he failed to perform (which was bound to happen), most Indians would have probably switched off their TV sets.

That's no longer the case now. The team is no longer dependent on an individual star. If one player has an off day, others deliver.

Alas, the same cannot be said of the market. These days, the Indian stock market resembles something similar to the Indian cricket team of the 90s.

The market is entirely dependent of select blue chip stocks.

Yes, the Sensex today is trading near its all-time highs having breached the 41,000 mark.

But investors are wondering if this will continue come 2020.

Because not much has really changed at the ground level. The Indian economy has slowed down. Earnings growth have yet to pick up in a meaningful way.

If you remember, in the first quarter of 2016-17, India had registered a spectacular GDP growth of 9.4%.Today, at 4.5% growth in Q2 of FY19-20, it's struggling at a 26-quarter low.

Investors are still wondering if the government's recent measures - from slashing corporate tax to doling out a real estate package - would pay off anytime soon.

So the big question is whether there is any significant upside left in the Sensex stocks?

I think that if you are looking to make big gains in 2020, then you need to look beyond the Sensex stocks.

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You see, a lot of the quality bluechips are not just restricted to the Sensex alone.

If you widen your horizon a bit and look at let's say, the BSE 200 index, then there are quite a few bluechip stocks that are set to deliver handsome gains over the long term.

The key here is the pick up in earnings growth. That hasn't happened yet. But when it does, I expect a huge pickup in growth, which will then be reflected in the stock prices too.

Right now, the slowdown in GDP growth is a result of the government's various initiatives to clean up the country. What we are seeing right now are the short-term challenges of these moves.

But once the cleanup is done, I expect a rebound in earnings not only of the Sensex stocks, but bluechip stocks beyond the Sensex as well.

That is why now is the perfect time to get into these stocks so that you can capitalise on the big gains once the earnings recovery takes place.

I recommend you consider my #1 tech stock for 2020 and beyond. I call it a Crorepati Stock.

I spoke about it at the One Stock Crorepati Mega Summit on Friday, 20 December.

The video of the summit will be taken down very soon. So if you're interested in this stock, watch the video now.

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, The 5 Minute WrapUp
Equitymaster Agora Research Private Limited (Research Analyst)

PS: Dear reader, more than 10,000 tuned in to the One Stock Crorepati Mega Summit where I revealed details of the top tech stock for 2020 and beyond! The video of the summit won't be available for viewing once it is taken down. Watch the One Stock Crorepati Mega Summit NOW.

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