Don’t Lose Opportunities in the Guise of Caution!
The markets are at a lifetime high and from what I understand, barring Vietnam Stock Index, Nifty and Sensex have been world-beating indices in the year gone by. If you take a quick peek into the history of the markets, you will find only four instances – CY 1991, 1999, 2003 and 2009 – since the 1990s when the Sensex gained more than 50 per cent within one calendar year (CY) as it has done this time. Now, at the current levels, we can see that investors are beginning to get nervous on deploying fresh funds in the markets. The sentiments are natural. However, being overcautious to not deploy cash at all is something that we may not agree with.
There are pockets of opportunities across capitalisation and sectors. So, while at one hand we do not want you to take the current momentum for granted and get overconfident, on the other we also do not want the current market levels to scare you away from investing. You would have noticed that the trend of stocks doubling in price has become fairly common lately. In fact, not having a multibagger stock in one’s portfolio has become a point of concern as it has become a ‘show-off symbol’ for individual investors across India. While only a few are able to benefit from it, their constant emphasis is a ‘loud’ factor in any investor discussion.
To put things in perspective and to understand the true picture on multibaggers we have come up with a cover story on this subject. The story not only throws light on which sectors produced the maximum multibaggers but also delves deeper into various characteristics displayed by a typical multibagger. I am sure you will find the cover story interesting and informative. Besides the multibagger story, in this issue we thought it an opportune time to discuss the most beaten down sector – hotel and tourism. So, in a special story, we have discussed how the sector stocks have been doing on the bourses and the reason behind a rally in hotel stocks.
This issue is also enriched by a special feature on the pharmaceutical sector which we hope will provide a good perspective. A common mistake that investors often make is to allow the market moods to cloud and dominate their investment decisions. Most often than not, while the present markets are outperforming, and hundreds of stocks are flying here and there, you might be finding yourself irritated because that one stock where you have allocated most of your funds is underperforming. This does happen to the best of investors too. Two things you can do here – check again the prospects of the stocks and revisit your investment thesis.
If it still holds good; stay with it. But dump it immediately if your analysis shows signs of deterioration in fundamentals. Switch to other stocks with high potential. It is true that stocks are expensive in bull markets. You know what is even more expensive – it is choosing the wrong stock to park your money in. The opportunity cost is at its maximum in bull markets and hence it is extremely important that you get your stock selection right. Befriend a proven and trusted stock advisor to not only get filtered and quality stock ideas but to also hand-hold you through these turbulent and peak level valuation times. We are glad to be given the opportunity to service you. Continue to stay tuned to our products as we jointly embark on the journey of creating wealth for you. Happy investing!
RAJESH V PADODE
Managing Director & Editor