Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Happy investing! - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • May 6, 2003

    Happy investing!

    If one were to look at the trend in the stock market over the last few months, it has been a range bound activity. What one means by range bound activity is that there is only stock specific buying activity while the overall sentiment continues to remain one of caution. This results in benchmark indices moving in a specific range, which has been the case in the last few months.

    Though investors' seem to be waiting on the sidelines at the current juncture, foreign institutional investors have been heavy buyers since January 2003. Though there has been marginal dip in net investment, looking from a point-to-point basis, one has seen solid inflow of money. This has come at the time when there is uncertainty over the global economic growth prospects in light of the ongoing SARS issue and the Iraq war.

    This is commendable and solidifies the fact that valuations are compelling when one looks at the broader parameters. In times like these, as has been the case historically, investors' typically wait for a rally to begin and then jump onto the bandwagon. Besides, obvious long-term triggers like valuations are sidelined and markets look for immediate triggers like say, disinvestment.

    Unfortunately, there has been a lack of positive inflow of news in the recent past. What one has seen starting 2001 till December 2002 is that select sectors like steel, technology and auto have seen big upward movement and then a brief fall amidst a range bound index. It seems that it is the turn of the banking sector currently. As we have maintained before, one has to exercise caution on this front. Valuations of some stocks have been stretched. Though there are positives like the passing of the Securitisation Bill and decline in interest rates, it always pays to be cautious.

    Instead of trying to identify the 'next sector' that will see a rally, a retail investor is better off investing in stocks that have proved their mettle. But there is no surety that those who have done well in the past will replicate the same in the future. Clear examples are erstwhile blue-chip stocks like Arvind Mills, Century Textiles and Bombay Dyeing. Though they were successful in early 1990s, sustaining their leadership in the sector has been an uphill task. The stock verdict - all the three are trading at historically low levels compared to early 1990s.

    The key is to identify companies with management depth. It is easier said than done. In uncertain times, management depth in a company is of big significance and usually this is a factor that separates wheat from chaff. Though it may take some time for the stock markets in general to realize the fact that valuations are attractive, it has been often said by investment gurus that 'markets remain irrational as long as investors' are solvent'. Happy investing!



    Equitymaster requests your view! Post a comment on "Happy investing!". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Mr Trump Has Been Broken (Vivek Kaul's Diary)

    Aug 24, 2017

    Kelly, Mattis, McMaster, Cohn, and Mnuchin are in charge. But these Pentagon bureaucrats and Wall Street hustlers may be worse than a loose-cannon president.

    Were You Lured By Mr Market's Bait? (The 5 Minute Wrapup)

    Aug 23, 2017

    Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?

    Deep State First (Vivek Kaul's Diary)

    Aug 23, 2017

    Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.

    Why Hasn't Warren Buffett Rung the Bell Yet? (The 5 Minute Wrapup)

    Aug 22, 2017

    It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 24, 2017 10:58 AM