Top 10 companies by 2018

Top 10 companies in 2018: If you can able to imagine them, you will become another Rakesh Jhunjhunwala.

My views on top Indian stocks by 2018:

1. Alternative energy stocks like Suzlon or Infrastructure stocks like Reliance Infra or GMR Infra may replace IT stocks.

2. Finance stocks like Reliance Capital are also serious contenders along with stocks like Reliance Power.

3. Metal stocks like Sterlite are dark horses.

4. Public Sector companies may bounce back if disinvestment process will be executed.

5. Reliance Retail which may be listed in 2009 is another strong contender for top 10 slots.

Request: I am requesting users to share their stock picks for 2018.

When will you get exceptional returns?

1. Invest in small caps which have the potential to become mid caps or large caps.

2. Invest in midcaps which have the scope to become large caps.

3. Invest in emerging technologies which generates high margins as they operate in niche areas.
Ex. SPEL Semiconductors, Bartronics, Compact Disc India, Suzlon and Tanla Solutions etc.

4. Invest in turn around sectors like Sugar.

5. Invest in companies which are targets for acquisition like Spice Mobile. But you need patience here.

Types Of Investor : which one u ??

Different types of investors:

1. Yahoo type: Yahoo is making new lows almost every day. But why some investors are still buying this stock. These investors are high risk takers. Their opinion is “Yahoo is a strong acquisition target” and Microsoft will buy it within one year at above $25 per share and we will 100% returns. What will happen if Microsoft will not buy Yahoo? They will lose heavily. Small banks will fall under this category.

2. Microsoft type: Microsoft lost just 15% in this market mayhem. Value investors buy stocks like Microsoft, Coca-Cola and Wal-Mart. Because Microsoft has huge cash flows, reasonable visible earnings and good track record. Its reasonable valuations and buyback offer are other attractions.Bharti Airtel and Hero Honda etc. will fall under this category.

3. Google type: Google shares lost 60% of value despite good growth prospects due to high valuations. Growth stocks fall heavily on bear markets and gain heavily in bull markets.Glenmark and Punj Loyd etc. come under this category. Fall is more and recovery will also be high in these scrips.

Who is wrong among the above 3 types of investors? If you analyse their minds, everyone is right in their perspective. It depends on your risk profile, your patience levels, investment principles and greed-fear levels.

Psychology of the Stock Market investors:

1. Yahoo Investors: High risk takers (greed but no fear)

2. Microsoft investors: Value investors (less greedy-more fearful)

3. Google investors: Growth investors (greedier-less fearful).

4. Visionaries: Patient investors. They buy stocks when no one think about that sector or stock and forget about it for 4-5 years. These investors generally get exceptional returns but how many of us have such patience levels. Motilal Oswal bought Bharti Airtel at Rs 25 and legendary investors bought Sesa Goa in 1991 and Infosys in 1997. That’s the vision.

5. Contra investors: These are ultimate investors. One needs to have extreme guts to become a contra investor. Legendary Investor John Templeton invested in Japanese stocks when Japan is reeling under severe financial crisis. Japan took 11 years to recover from that crisis. Templeton waited patiently and got wonderful returns in 1981. How many of us have such vision, guts and patience?

My advice: One should choose their investment styles according to your needs and psychology. It is better to have all kinds of stocks in your portfolio.

Final advice: Frankly to tell that no one in the world knows about the severity and depth of current credit crisis and its implications on the economy. If you are a long term investor with two year horizon but don't have money, just forget about your investments. If you have money, gradually deploy the money in good stocks to build a great portfolio. Closely follow the quarterly results to find great stocks. It is waste to track your investments on daily basis in these painful days. Those who show vision and strong resolve will be rewarded but take time. Instead of developing knowledge and learning from mistakes, you continue to rely on tips- you will continue to lose money in stock markets.

What u Learned from 2008 In Stock Market ???

The year 2008 was a historic one for the global financial industry. Many of us witnessed this type of carnage in the stock markets for the first time ever. Almost all investors lost money in the year 2008. Many have seen their years of wealth building go down the drains in a matter of few weeks.

But winners are not quitters and thus we need to take lessons from this historic stock market event and become better investors.

There is no harm in making losses in the markets. But a wise person is one who looks back and learns from his mistakes. Thats how we get better with time. Even the biggest of investors have made blunders in their lifetime. But they are successful because they didnt give up and also learnt from their mistakes.I have tried to point of few things we could learn from this financial and stock market crisis.

Two Emotions that rule the stock markets (Fear and Greed) : This was the opinion of Warren Buffett and if we apply this in the current scenario then its most appropriate. In 2007 the stock markets were on a roll. Everything you invested in gave big returns. If every investor looks back at his/her thoughts you will find that we were all being greedy.

There were so many people who made 70-80% gains in a matter of few months in some big positions but the greed for more did not allow to sell the stocks. Then the crash wiped out all gains in a matter of few weeks. So 2007 was a year dominated by excess greed and that was the time to sell. For now its all fear and anyone who buys a great business now will not be dissapointed few years down the line.

So sell when there is greed all around and buy when there is fear.

Don't blindly trust Analyst and Brokers: At the beginning of 2008 when the stock markets were on a high there was a special show on one of the financial news channel telling which sectors the brokers were most bullish on for 2008. The brokers across all financial houses in India were most bullish on the Banking Sector for 2008. I am sure I dont have to tell anyone how this sector performed in 2008. Analyst at the beginning of the year were talking about 25K plus Sensex at the end of 2008. Again we are ending the year with over 50% losses.

So what I am trying to say is that brokers and analyst dont know anything special. The best investment decisions are the ones made by yourself looking at things around. The best investment opportunities also can be first spotted by you then anyone else.

Think of the inverstor who visited Pantaloons when it had just started off. Just by looking at the demand in the store he bought the shares (that time at Rs. 32). This is how you spot great investment opportunities. No analyst will tell you better then your own experience with a product of thing.That is what WARREN BUFFETT say...

So make it a resolution to buy with your research. Its ok to listen to an Analyst teling about a stock. But go back and verify facts for yourself before buying.

Never take positions in the market on Debt: Since I am cosely related to the financial industry I know of people who took big debt from banks so as to trade in the markets. This was because everyone felt that the only direction the markets can go is up.

But when the markets crashed all the money was lost. Those who traded the market on leverage were in deep trouble and still are in a mess. These kind of silly decision will not only affect you but also your family. So never use debt to invest in the markets.

Patience can earn you big money and also save you from big losses: I dont remember the name of the Company but there was one stock for which Warren Buffett waited for almost five years so that it gets to decent valuations before he buys. Similarly when he buys a stock he would hold on even if it did not move for a year or more. This is the confidence he had in himself.

Sure all of us cant be Warren Buffett. But we can try and learn some things from him. One is the patience you need when you are in the stock markets.

No one in the world can predict the stock market movement: This is the biggest lessen for everyone and if you realise this then you will for sure become a better investor.

The biggest institutions which failed were the ones whose recommendations and positions in the market were tracked the most. They were considered to have the best analyst brains in the world. Then why did they fail? Why did they not predict the stock market crash?

The answer is no one can predict the stock markets. Half of your tension is gone if you stop trying to predict the markets and start to just look for good business and buy them for long term.

Some more words of Advice:

I am sure there are people who would have lost 60-70% and would think they are not good investors or stocks markets are not a place for them. I would say that even the biggest investors lost big time this year. So dont give up and these levels and even more attractive levels in the near future are the best times to invest in great businesses. Use these to recover the money you lost in the markets.

2009 should be a volatile year for the markets. Look at low levels to buy and accumulate great stocks. Look at a investment perspective of not less then 5 years.

What to buy:

• Keep buying in small number the sectors which have been beaten down the most. I would look at buying some industrial commodity stocks. They are at very low levels. It does not mean they cant go lower. So buying in small numbers would make sense.

• Where there are big challenges there are also big opportunities. Look out from an India perspective where are the biggest challenges. You will surely find some great investment themes there.

• Gold is always a great hold for long term. Specially in a world where paper currency supply is going on increasing. The paper currency will decrease in value against something. That would be hard assets like gold.

• I had mentioned it in one of my earlier articles also. It would make great sense to buy farmland. The reasons are plenty. One would be the global food shortage makes farmland value greater. Also with rapid industrialization and urbanization coupled with infrastructure inprovements the value of farmland would increase.

Happy Investing and All the Best for a Great 2009 and Beyond.

The Mother of All Bull Runs Is Still To Come For India - Rakesh Jhunjhunwala

Gear Up For that...!!!

Investing Mantra

"In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond". - Warren Buffett

ETF - Exchange Traded Funds

Before going on to state the need for Commodity ETF in India and how investors can benefit from it I would like to explain what an ETF would mean.

Meaning of ETF:

ETF or Exchange Traded Funds are like Mutual Funds which can be traded on the stock exchanges. We have heard of the Gold ETF and it typically means a fund which invests only in Gold.

So if a person wants to invest in gold he/she has the option of buying physical gold and keeping it. But that has got some security concerns. So the second option is to invest in a Gold ETF. Its as good as buying gold. The only difference is that here gold is bought for you and stores in Demat form.

I believe that the concept of ETF is clear now to everyone. Hence I would go on to explain what would be a commodity ETF and why investors could benefit from investing in a commodity ETF.

What Would be a Commodity ETF:

Well Gold would also be a commodity ETF. But the problem is that in India we only have the Gold ETF which of course is a precious metal. There is no other ETF at present in India.

Globally there are ETF's of almost all metals and also agro- commodities. Example: Gold, silver, copper, wheat, corn, cotton etc.

So a commodity ETF would typically be one throught which a person can get exposure to wide range of industrial and agri commodities.

Why Commodity ETF is good for Investors:

To get the highest return in commodity investing the best idea is to buy the commodity. For Example buying Gold, Silver, Copper, Zinc or any other agricultural commodity. But this is not feisable for a common investor.

So the next best option is to invest in commodity ETF. This as stated earlier is the indirect way of owning the commodity.

I would put investment in commodity related stocks as the third option for investing in commodities. Of course in India since the first option is not feisable for most investors and there is no commodity ETF also this is the only option.

Investing in commodity stocks is the last option because while investing in equities one would surely not get the full benefit of the commodity price increase. Also while investing in equities many other things have to be considered such as the management of the company, financial health etc.

Why Buy Commodities Now:

In my opinion the next year and even now is one of the best times to buy all types of commodities. I dont expect them to do exceedingly well in the next year or maybe in the next few years. But any sensible person would buy a stock or commodity when its down. For commodities the prices have plunged and in some cases they are down more then they should have gone down. So for someone who is looking at a 3-5 year investment horizon the industrial commodities might be one to pick up now.

Even crude oil at $45 is very cheap. Analyst are tlking about crude at $25. But that would mean that the US is contracting at something like 5-10%. This makes no sense. Similarly the long term outlook for all commodities is very bright.

The Commodity Price Cycle:

Prices go up in a period of high growth in the global economy like it was from 2003 to early 2008.

When there is a slowdown or recession the prices also slump. This is what has happened now. When prices fall the commodity producers have less incentive to go for expansion, go for exploration activities and some even shut down few plants and cut down on capital expenditure big time.

So as long as growth is slow or negative this is fine from the demand-supply perspective. But one day the world will get back to decent growth again and this is more true for Asian countries.

When this happens suddenly there is a big pick up in demand for industrial commodites. But the commodity producers have long back cut on their exploration, capital expenditure and other such growth activities. So suddenly there is a demand- supply mismatch. There is more demand again for industrial commodities then the supply.

It is this time when the prices would shoot up again. This is how the commodity cycle generally works and this is what will happen in the next few years. I cant predict the timeline but the global economy will recover some day and then the commodities would shoot up again.

So What Should One Do:

Commodity ETF might not come so soon in India. So for now the best option is to invest in industrial commodity stocks. I would not suggest investment in the current Sensex levels. I personally expect the Sensex to go back well below the October 2008 lows. So that would be the best time to invest in some of the good commodity stocks.

How to Preserve Capital in a period of wealth Destruction

The world had seen a boom in almost all asset classes from 2003 to early 2008. That was a period of wealth creation for investors. What is following is a period of wealth destruction and what best one can do is to avoid capital erosion during this period.

How To Avoid Capital Erosion:

Be in cash. In bad times cash is the king. Also when its a bear market for equities its bull run for cash. For example a stock "X" falls from 100 to 50 in the bear markets. So effectively if you had cash in hand then with the same Rs. 100 you can now buy 2 stocks of company X instead of just one stock. So its a bull run for cash.

Invest in Gold.

I am not saying invest all your money in gold. But 15-20% of total net worth can be in gold. The reason being that gold is the best hedge against inflation and also the big bull run for gold is yet to come. Many will be wondering why hedge now against inflation when its coming down sharply. The fact is that whenever in the past so much of money has been poured into the financial system,inflation has come in a big way 1-2 years down the line. So expect a major global inflation 1-2 years down the line because of excessive money printing and prepare for it by buying gold from now when prices are down.

Invest in Cash Rich Companies.

In this situation I must say that even huge cash reserve companies can fall in value. So this might not be the best way to preserve capital. But if one really wants to invest then invest in cash rich and low debt companies. They will do relatively well.

IMF Latest Forecast on Global Economy:

In Its latest gloomy forecast the IMF has said that the economies of the United States, Europe and Japan are expected to contract in 2009 as part of the first annual decline by the advanced economies since World War II.Overall, the IMF now expects the world economy to grow at a 2.2 percent pace in 2009, down from its projection last month of 3 percent.The IMF expects an economic recovery to begin in late 2009.

Where are Indian Equities headed:

I, or for that matter anyone would be lying if he/she know where the markets are headed. But for sure going by the way things are panning out globally there is more risk of downside then any upside. Its very much possible that like other central banks the Indian central bank will also go for agressive rate cuts and that will prop up the markets for a while. But gradually it should drift lower. One can be very sure that there will be no major upside move in the markets in the next 1-2 year and even if markets move up sharply in short term it would be followed by a even sharper fall.

Sectors To Avoid For Now:

IT Sector
Real Estate Sector
Industrial Commodities Sector

Companies To Avoid For Now:

High Debt Companies
Small Companies in Capital Intensive Sectors
Companies which are still showing 75-100% growth

Best Long Term Investments:

Invest in Water Related Companies (Mineral Water,Water Infrastructure)
Invest in Agri Related Stocks
Even Better is to buy a Farmland. It will give the highest returns in the next 5-10 years and even beyond.

Investing Mantra

"It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart."- Benjamin Graham

Investment Ideas

Attractive Stocks in the Agriculture Sector:

This is one sector which will do very well the next time the markets make a upmove. That might be sometime away but slow accumulation on these stocks can be considered.

1)Jain Irrigation Systems Ltd
2)Kaveri Seed Company Ltd
3)Karuturi Global Ltd

Attractive Stocks in the Water Sector:

Three stocks which might be big companies of the future in the water related sector in my opinion are:

1)Subhash Projects & Marketing Ltd
2)Mount Everest Mineral Water Ltd
3)Ion Exchange (India) Ltd.


Should You buy in big numbers now:

If anyone does plan to buy any stock for long term also then he/she should buy only in small numbers. No one can say for sure that the stock markets have bottomed out or are even close to that. Yes some valuations are very attractive but it might get more attractive. So I would suggest to invest only 10-15% of the money allocated towards investment purpose in stocks now. For now capital preservation is the top priority

Investment Themes For 2009

The year 2008 has been one of the most dismal years for the global financial markets. The year 2009 does not promise to be a great one either. The way the global economy is slowing down and the financial crisis is shaping up there will be more pain in the global stock markets next year.

However, smart investors are looking for opportunities which will be the best investment themes in the long run. These industry stocks can be accumulated in small numbers for the long term. I have tried to put in some major investment opportunities for 2009 and beyond. More suggestions and arguments are welcome.

1)Gold

Reason for investing in Gold: Excess money creation globally will lead to paper money falling in value against hard assets like gold. Moreover for gold the big bull run is yet to come if we compare the gold price movement with other commodities.

2)Agriculture Stocks and Farmland

Reason for investing in Agriculture: There is a global food shortage. Moreover the stress on agriculture in India is expected to increase to boost GDP growth. Farmland in India in several places is very cheap. These are golden buying opportunities with a long term perspective. Even if there is one year of very low global agri production the agricultural commodity prices will go through the roof.

3) Water and Water Infrastructure

Reason for Investing in Water Sector: Water is going to be the most expensive commodity in the next 15-20 years. This is very true for rapidly growing economies like India and China. Water shortage could lead to massive problems and also opportunity for water industry players. It would be great to be invested in a mineral water company or a water infrastructure provider.

4)FMCG Stocks catering to necessity products

Reason for investing in FMCG: First we need to differenciate between companies offering high end luxary products and companies which are offering products which are low cost as well as a necessity. Even in a slowdown or recession people will use soap, shampoo, toothpaste or shaving products. Look for companies offering these products with medium price range.

5)Companies catering to the defence sector

Reason for investing in defence sector: The National security was always an important issue and its become even more important now in the light of the recent terror attacks which have left everyone shocked. Even in a slowdown or recession the security spending will increase. Look for companies offering security and defence products such as defence vehicles, CCTV and many other security and defence equipments. They are sure to do well in the long run.

In addition to the above mentioned sectors,the following would be good long term bets:

1.Solar energy:emerging stocks like xl telecom &energy,moserbaer
2.Value added services:Tanla solutions ,on mobile global
3.emerging stocks like bartronics,mic electronics ,icsa.


These are just some sectors which in my opinion will be wealth creators in the future. More suggestions and opinions are invited. Investors need to look into each of these sectors and pick out some good companies from them. For sure they will not dissapoint in the long run.

Fundamentally Strong Zero Debt Companies

Many great investors prefer companies with zero debt. Such companies are even more in limelight in this volatile interest rate scenario in India. Listed below are ten companies which are fundamentally strong and are also Zero debt (Debt free) companies. These are not the only debt free companies in Indian stock exchanges but just few of them which have good future prospects.

1)Engineers India Ltd.

2)Infosys Technologies Ltd.

3)Jindal Photo Ltd.

4)Container Corporation of India Ltd.

5)Gateway Distriparks Ltd.

6)NMDC Ltd.

7)Sun TV Network Ltd.

8)Fulford (India) Ltd.

9)Mahanagar Telephone Nigam Ltd.

10)Siemens Healthcare Diagnostics Ltd.

Stocks like Jindal Photo, Siemens Healtthcare and Fulford India are not so much in limelight but are good stocks for the long run. Investors can consider exposure to these stocks after doing their own research.

Investing Mantra

"I spend about 15 minutes a year on economic analysis. The way you lose money in the stock market is to start off with an economic picture. I also spend 15 minutes a year on where the stock market is going" - Peter Lynch

Investing Mantra

"When returns on capital are ordinary, an earn-more-by-putting-up-more record is no great managerial achievement. You can get the same result personally while operating from your rocking chair. Just quadruple the capital you commit to a savings account and you will quadruple your earnings."- Warren Buffett

SOME VALUABLE INVESTING TIPS

I PROVIDE SOME VALUABLE TIPS FOR INVESTING TO GET THE GOOD RETURN LIKE SAME AS .WARREN BUFFETT.

NEVER forget that what goes up, must come down and vice versa.

This rule, I believe is the cornerstone of a successful and contented life. A sudden rise in the stock indices may have you smiling. It’s the slide that tests your real strength. I have seen may investor losing their money. But i would say that it is not the fault of the market, its your investment strategy that is faulty. Here, I would unveal few tips for better investment outputs.

Don’t panic

As i stated earlier, what goes up, must come down and what goes down must come up. I have seen many small investors start to panic when market comes down and sell their shares and stocks at lower rates. This is wrong strategy and the investors loose . I would suggest them to wait, until the stock rises. The market going down have to rise again.

Invest 60%

When market rises, I have seen many investors, invest all their money in the market. This is wrong strategy. Invest only 60% of your amount in market. Keep 40% of amount for bad situation. Never let yourself with shortage of cash.

Invest in business not in company

Don’t invest only in big companies. To gain a good amount of profit, do your homework ( analysis ) about the small companies in the same business having ability to rise. Always their is the point of saturation in big companies. Remember, we invest to gain profit, not to put our amount in safe deposits.

Don’t be impatient

Don’t react according to market. Make your own plans. Dont be impatient when market goes up or down. React according to your priorities.

Take calculative risk

People say, take risk in market. I dont say to take risk, rather take calculative risk. Before taking risk analyse the market and the company to invest for. Calculative risk always pays.

These are few tips ,by which you will always find yourself in a safer and Profitable side.

 

Investing Mantra

"Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all of your money." - Jim Rogers

TOP 8 BUYING STOCK FOR 2009 WITH ABOVE 30 % RETURN

I highlighted 8 Buy-rated stocks which have selected on the basis of superior growth, high cash margins, moderate gearing, improving returns and adequate liquidity. I believe last year’s market correction may help present investors with a buying opportunity that have trading at less P/E ratio .

1.Bharti Airtel  ---- 30-35 % upside

2.Cairn India Limited ---- 20-25 % upside

3.Dr. Reddy’s Laboratories ---- 60-70 % upside

4.Housing Development Finance Corporation ---- 15-20 % upside

5.Jindal Steel & Power ---- 25-30 % upside

6.NTPC ---- 20-25 % upside

7.Tata Consultancy Services---- 20-25 % upside

8.Zee Entertainment---- 55-65 % upside

INVESTING MANTRA

"Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it." - Peter Lynch

It's never paid to bet against America :WARREN BUFFETT

In a recent interview , Warren Buffett has put in context how bad things are in the US. He says that World War II and the Great Depression were worse, but the current crisis is pretty bad. In fact, he calls the current crisis the 'economic Pearl Harbor'. He also mentions that the US has a track record of overcoming crisis and it will eventually come out of this one too. However, it might take time because the economy currently is in a cycle of fear. "It's never paid to bet against America. We come through things, but it’s not always a smooth ride," he says. He also believes that Barack Obama is the right person for the job. It is normally hazardous to take such directional calls, but given his track record, it would be foolish to ignore Buffett’s predictions.

List of Companies Audited by PwC

. Bayer CropScien
· Colgate Palmolive
· Coromandel Fert
· Cummins India
· Gateway Distpark
· GlaxoSmith C H L
· GMR Infra.
· Graphite India
· Guj Gas Company
· HCL Info systems
· HCL Technologies
· Hinduja Ventures
· Info Edge (India
· InfoTech Enterpr
· Ingersoll-Rand
· Jagran Prakashan
· Kesoram Inds.
· Lanco Infratech
· Marico
· Maruti Suzuki
· Mastek
· Max India
· McLeod Russell
· Moser Baer (I)
· Motherson Sumi
· NDTV
· NIIT
· NIIT Tech.
· Piramal Health
· Rain Commodities
· Religare Enter
· Satyam Computer
· Simplex Infra
· T.V. Today
· United Breweries
· United Spirits
· Usha Martin
· Wyeth
· Bosch
· Entertainment Nt
· Glaxosmit Pharma
· Piramal Life
· UTV Software
· Arshiya Intl
· Glenmark Pharma
· Novartis India

Investing Mantra

"To suppose that the value of a common stock is determined purely by a corporation's earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Wells when he told them over the radio that the Martians had landed"- Jim Grant