Five Safe Stocks You Could Buy Today - The 5 Minute WrapUp by Equitymaster
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Five Safe Stocks You Could Buy Today

Mar 14, 2018

Tanushree Banerjee, Editor, The 5 Minute Wrapup

Do you get the feeling that the markets are confused?

I sure do.

In the last month, the market went down, up, down, and up again.

The net result was no gain, no loss.

It's almost like no one knows what to do. The reason for the confusion is a tug of war between the bulls and the bears.

Uncertain Times for the Benchmark Index

So, I'll present to you, both sides of the coin.

The Positives

  • Economic growth is picking up
  • Effects of demonetisation and GST are rapidly wearing off
  • Inflation is stable
  • The RBI remains on hold
  • Urban personal consumption is as strong as ever
  • The government continues to spend tons of money in infrastructure projects
  • Corporate earnings have started rising
  • The aam investor is still putting money into stocks and mutual funds
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The Negatives

  • Economic growth is nowhere as high as it should be
  • The threat of inflation hasn't gone away
  • Crude oil prices are still high
  • Large private sector investments in the economy are negligible
  • Job growth remains poor
  • The distress in rural India hasn't been resolved
  • Donald Trump's trade war
  • Foreign investors are selling

So, which narrative should you believe?

If you, like me, believe in putting your money in safe stocks, your answer should be clear: Neither of the two.

Why?

Well, it's simple.

Safe stocks are safe because these issues don't really affect them.

Last week, I shared with you the four characteristics of safe stocks.

  • Strong Brands
  • High Quality Management
  • Resilience to Economic Downturns
  • Low Debt

Stocks with these characteristics, have stood the test of time.

If a stock satisfies these four criteria, do you really think you need to worry about things like inflation and interest rates?

Now, don't get me wrong. I'm not saying they're not important.

But for an investor in safe stocks, these issues don't matter in the long-term.

In the long-term, I believe the Sensex will rise to 100,000.

It's inevitable in my opinion.

But before that happens, I believe, the Sensex could fall by 30% from its recent high in the short-term.

This much-needed correction will set the stage for the journey to the magical six-figures.

So, what's the best course of action?

All you need to do is remain invested in the best picks among all the safe stocks in the market.

Then wait for the market to do the rest.

  • In the short run, the market is a voting machine but in the long run, it is a weighing machine. - Benjamin Graham, guru of Warren Buffett

Now, an important point here...

The best picks among all the safe stocks may not be part of the Sensex or Nifty.

That's okay. They don't need to be.

Consider Asian Paints. It's part of the Sensex. But it was included only in December 2015.

Did you know that Asian Paints was a 16-bagger in the ten years before its inclusion?

Yes, that's right.

The stock delivered a 32% annualised return over a decade...before joining the benchmark index!

But here's the thing...

It was a safe stock long before the stock exchanges recognised it.

It's not very hard to find such stocks. What is hard, is being patient enough to wait for the right price to buy them.

So, what do I recommend?

In this confused stock market, I see only 5 stocks that are both safe and cheap enough to consider buying.

I recommended them in a special report last month.

I haven't changed my views since then. You could still consider them.

I believe the Sensex will triple from its current level.

You should be invested in the multibaggers that will accompany the Sensex to 100,000...even if the market falls by 30% in the short-term.

Regards,

Tanushree Banerjee
Tanushree Banerjee (Research Analyst)
Editor, The 5 Minute WrapUp

PS: Sensex 100,000 will have lots of winning stocks. You may already own some of them. Some may be on your watchlist. Tanushree will help you figure out the best safe stocks in the market. Read on to find out...

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4 Responses to "Five Safe Stocks You Could Buy Today"

ALOK

Mar 23, 2018

Please send me the report

Like (1)

awadhesh kumar gupta

Mar 18, 2018

I am small capital investor.kindly suggest accordingly.

Like (2)

Lalit gohil

Mar 15, 2018

I have lost faith in this market so help me to regain .

Like (2)

OP Agarwal

Mar 14, 2018

Yes, I am interested

Like (2)
  
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