Good returns!!!

Based on the last weeks calls, the returns are as follows:

Cummins @ 324; current price: 335 = Gain 4%

Ge Shipping @ 260; current price: 294 = Gain 13%

Siemens @ 484; current price: 509 = Gain 5%

Although I squared off my positions, yet I am happy that the stocks I picked, did moveup...Will let you know when I make my next move

Going Long!!!

Bought

Cummins @ 324;

Ge Shipping @ 260;

Siemens @ 484

Lets see how it goes

Taking a forced break!!!

Still taking a break, primarily because I don't see any good trades still. . .glad did not trade last week, as you saw the markets went down on Monday only to come back to the same levels by Friday . . .and in such markets its virtually impossible to make money!!!

Again scouted for a good trade, somehow still cant get my hands on a good one. . .Though I think after Fridays move, one would be inclined to go long only. . .and markets might go up. . .however I don't know how to enter them. . .I mean I am not able to find any good opportunity to enter. . .I have contemplated lots of strategy including bull spreads, buying NIFTY futures, selling puts, buying NIFTY BEES, even buying MF still cant place my hand on a favourable risk return ratio. . .

Lets see if I can see something more clearly would definitely scribble it down here. . .till then guess holiday time. . .

Valuations are not cheap anymore! But who can question liquidity

I was just reading an article on a blog on how the markets have been a roller coaster ride throughout 2008-09, and the article beautifully summarised the feeling that the investors went through starting 2008 January. A feeling of euphoria, in Jan 2008, to a feeling of buy on dips in June 2008, to a feeling of let me put it all (but am i doing the right thing) in Oct, to a feeling of let me book my losses and I will never come back to equities in March 09, to a feeling of oh no did I miss the bus in May 2009. . .

I agree that most of us would have gone through this feeling, leaving perhaps some of the few who had the vision and the good luck to time the markets to perfection . . .well as far as my personal experience goes, I was not invested much in Jan 2008, I was mostly in cash. . .in June 08 I had started to invest but not much I would say, in Oct 2008 I put in all I had with the fall in the markets. . .(read my article I wrote in October) in March I also questioned my decision, however I remained invested (read my article I wrote in March) and well started a FD side by side (you cant have all the money in equities, this feeling dawned into me for the first time then). . .I stayed invested in May (obv trading positions) and gradually i have booked profits since then. . .but one thing is for sure, March tested my conviction in the markets as well. . .

Also I was thinking actually its very very difficult for an average investor to make money in the market, if you don't do your analysis well. . .If you don't trade with paper money first, if you don't know technical analysis, if you haven't seen a bull and a bear market (and hopefully survived the bear market) then your chances of making money actually start to dwindle . . .However even if you know all these one bad move can wipe you out of the markets. . .E.g. if someone had shorted NIFTY futures just before the election results. . .Lets say shorted 4 Nifty futures (which is not much for the fun of it, or lets say someones friend had advised him to short or someone might have got a tip! whatever might have been the reason) but lets say 4 Nifty futures worth 1Lakh. . .As the margin money for one future is Rs 25,000. Now with 35 sec of trade (which I am sure all amateur traders would have missed on the opening of the markets post election results) that particular gentleman would have lost . . .any guesses??? Rs 200*800= Rs 1,60,000. Now that is a lot of money to lose in 35 seconds. . .now to make that 1,60,000 would require a capital of 20 Lakhs (assuming you get a 8% return). . .Hence that'sthe end of our amateur investor who invested on tip. . .The point I am trying to make here is that for the average investor the odds are sometimes stacked heavily against. . .hence the decision to buy and sell should be taken with utmost care and guess the bottom line is that minimise your losses and book your profits. . .

Now where to from here. . .Closed my stock positions on Cummins and booked the profits.. . . Actually markets are in a range wherein they can go anywhere from here. . .there are no clear signs for the downturn however for the upside the valuations pose a challenge. . . I spent this weekend looking for some good buys, however could not even pick up a single stock that I would pick up blindly. . .some of the stocks look ok on valuation e.g. Siemens etc but again relatively speaking. . .and I dont like this feeling of not getting good bargains . . .Lets see what the next week has instore. . .

Position Vindicated

As written in yesterdays post, that I am going long on Cummins, Cummins went up by 9%, good to see some profits trickle in today. . .Glad my stand stood vindicated with going long. . .

Nifty was a tricky Trade today!

Well its not a pleasant feeling to be wrong. . .however it is important that the losses should be minimised. So at the start of trade I took some positions on the Nifty at 4528 however soon realised that the market was not obliging, I closed my positions at 4497, I had kept a stoplossof 4480 for today as I knew if the market breaks below Fridays close then it means that the Nifty is showing signs of weakness. . .Hence I lost 30 points on the Nifty, lesson learnt . . .( lesson of not to jump into trade within the first 30 min of trade).

Anyhow I think what broke the back of the market, was the announcement of drought, also the pandemic in the country would also perhaps weigh on the markets at some point or the other. Anyways the good thing I did perhaps today was to go long on stock. . .bought cumminstoday, however will have to be careful if the markets collapse, then nothing much would be able to stand the selling pressures. . .

What worries me is the huge discount between spot and futures. . .this basically means huge huge shorting has happened on the nifty futures. . .but this also means that if the marketsdont fall then there would be huge huge shortcovering and this might lead to a real swift rally on the upside. . .

I am not giving any directional call, since I am not sure the way markets would move. . .the charts are still positive. . .however the discount on the nifty does worry me. . .well one thing is for sure markets are supreme and they teach you that you would be wrong, so one needs to be humble and accept mistakes :)

NHPC IPO

I am not a big fan of investing in IPO's, primarily because there is no clear vision in terms of earnings, or track record to follow. . .however whenever an IPO comes, there is a huge exuberance in the market and well almost all the people want to get a share of the pie. . . I clearly rem the reliance power IPO, wherein almost every one I knew had invested. However what has happened since is for everyone to know (inspite of the company issuing additional shares to people who had subscribed, which I believe was a very good thing). . . Not to mention issues such as Jet airways, DLF etc etc. . .which went below their issue prices.

The point is there are lots of good issues also that hit the market and are priced reasonably, however there is no track record of them or there is no technical analysis to fall back on, hence it becomes important to value them precisely. . .

Came across a nice article on the NHPC IPO , seems like an expensive IPO. . .but then I guess even this one is oversubscribed. . .

My Strategy for next week has been firmed up, would be going long. . .on selective stocks.

Profits booked at the right time

As written in the previous post, on my other blog, profits booked at the right time. . .markets crashed big time in these two days. . .now where from here. . . well the charts have not gone into negative territory, infact I think it might be a smart time to buy for people who know what they are getting into. . I think the risk reward has become favourable ( but you must know which stocks you are getting into) although a word of caution it might not be the same for all the stocks. . .

My strategy for the next week is not firmed up yet. . . though one thing is for sure I wont go short. . . .will keep posting . . .

Do write in with your comments. Its always nice to hear your thoughts. . .