Mistakes to avoid while investing in equities or stocks

Read an article that was impressive in its list of mistakes to avoid while investing in equities or stocks. I agree with all of the points but I also think one should take advantage of any short term volatility in the stock markets or the individual company stock price.

Here is the list of mistakes suggested to be avoided

Overconfidence - Don't be unrealistically optimistic

Over enthusiasm to trade - Not every ball should be hit (analogy to cricket)

Missing the benefits of compounding of capital - Learn from Einstein

Worrying about the market - But there is no answer to your favourite question - Suggests to worry about the companies you invest in rather than the market

Timing the market - Around 99% of investors will fail in this strategy

Selling in times of panic - You should be doing the opposite

Focusing on past performance - Its like driving forward while looking backwards

Diversifying too much will kill you - Investing is all about staying alive

Full article @ http://economictimes.indiatimes.com/Markets/News__Views/Analysis/Eight_mistakes_to_avoid_while_investing/articleshow/msid-2900010,curpg-1.cms

RK
Singapore Property Classifieds and Social Network

Gujarat Mineral Development Corporation - GMDC bonus issue

I had bought GMDC shares whey they were at their peak last year. But I have seen the value move down over the months and now its about 40% lower than the buy price. Just when I was looking to dump the stocks I came across the news that GMDC board has declared 1:1 bonus on Jan 30 2008.
I think they have not set the record date yet. But its surprising that the stock price had infact dropped irrespective of this news and strong results. I see that the stock is showing some strength recently and I am sure it goes back to its peak sooner than later.

PS: Indian Markets are heading toward a strong close as I write this.

RK

Singapore Apartment Rentals

Indian Stock Market News, Analysts Picks, Views, Tips and Recommendations - 27 March 2008

First up, the Indian Markets should be opening lower since US had closed marginally lower yesterday. Other markets have also opened lower.

Gujarat NRE Coke:
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The one stock I am watching recently is Gujarat NRE Coke. I have been seeing it move between ranges for sometime now. So my target was to buy it at 110 or below. It did reach 103 on 24th March after dropping 20% of its value in a day. I waited a day to see how it moves but I was taken by surprise when it jumped 20% on 25th March and by another 12% on 26th March. I dont quite get the reason why it should such exaggerated movements unless somebody is making it move so. Now, its beyond my price range and I guess I will have to wait for a month or two to get into the stock.

Reliance Inds decides to shut down 2/3 of its Petrol Pumps
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The news item that caught my eye today was the decision by Reliance Inds to shut down 2/3rd of its petrol pumps. This drastic decision was taken against the Government's decision not to provide subsidy to private operators. This makes the Government run companies to sell petrol cheaper compared to the private operators. If this is going to happen for real then we got to see how it affects Reliance Inds bottom line but since Reliance claim that they are actually running losses due to the higher prices they charge this infact should improve their bottom line.

We got to wait and watch if Reliance will follow up on its threat for real or its just a threat to get Government do something!

Proud day for an Indian Company
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Tata's have finally closed out the deal to buy Jaguar and Land Rover. What a proud moment it is for being an Indian!

Analysts Views
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Abbott Ind, Merck, Wyeth to rally 35% more: LKP
Gbl cues, results key to mkts trading forward: Edelweiss
Not a rosy picture from macro angle: SCMF
Sensex can touch 17k: Experts
Brokerage stocks to see poor Q4 earnings
Positive on PSU banks: Centrum Cap

Brokerage Picks and Recommendations
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Karvy + Tata Chemicals Buy Mar 26, 08 418.00
Prabhudas Lilladher + XL Telecom & Energy Buy Mar 26, 08 400.00
Hem Sec + Chennai Petro. Buy Mar 26, 08 348.00
Prabhudas Lilladher + Nagarjuna Constr Buy Mar 26, 08 297.00
Emaky research + Thomas Cook (I) Buy Mar 26, 08 115.00

RK
Singapore Rentals, Real Estate Classifieds and Social Network

Indian Stock Market News, Analysts Picks, Views, Tips and Recommendations - 25 March 2008

Wall Street ended high last night and the Asian bourses are following it as usual. So we can expect a better day on NSE and BSE.

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Daily round-up of the Indian Stock Market News, Analysts Picks, Views, Tips and Recommendations:
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Wall St rallies on revamped Bear offer, home sales
http://economictimes.indiatimes.com/Market_News/Wall_St_rallies_on_revamped_Bear_offer/articleshow/2896735.cms

US stocks jumped on Monday after a raised buyout offer for Bear Stearns Cos Inc suggested that financial stocks may have reached bottom, especially in light of fresh data that fueled hopes for a turnaround in housing. Stocks rang up big gains for a second straight session after JPMorgan Chase & Co lifted its offer for Bear Stearns to $10 a share from $2, helping alleviate concerns that other investment banking shares could tumble.

Sensex ends up 294pts; HDFC surges 8%
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34872

The Sensex opened with a positive gap of 99 points at 15,094. The index touched a high of 15,349, and a low of 15,056. Fresh buying towards the close helped the index end on a firm note at 15,289 - up 294 points.

The BSE Mid-cap index shed 2.7% (158 points) at 5,806, and the Small-cap index dropped 3.8% (272 points) to 6,950. The BSE Bankex rallied 3.3% (249 points) to 7,744. The NSE Nifty gained 36 points to finish at 4,610. The market breadth was extremely negative - out of 2,717 stocks traded, 2,149 declined, 535 advanced and 33 were unchanged today.

IIP nos key to mkts trading forward: Religare Sec
http://moneycontrol.com/india/news/market-outlook/iip-nos-key-to-mkts-trading-forward-religare-sec/07/40/331258

Global cues to drive mkts in near-term: Pranav Sec
http://moneycontrol.com/india/news/market-outlook/global-cues-to-drive-mktsnear-term-pranav-sec/07/40/331248

Mkts look weak and lack confidence: Rada Advisors
http://moneycontrol.com/india/news/market-outlook/mkts-look-weaklack-confidence-rada-advisors/07/40/331241

Mkts could see more pain: Dawnay Day AV Fin Srvcs
http://moneycontrol.com/india/news/market-outlook/mkts-could-see-more-pain-dawnay-day-av-fin-srvcs/07/40/331196

Realty collapses; Ansal Infra, Parsvnath worst hit
http://moneycontrol.com/india/news/market-edge/realty-collapses-ansal-infra-parsvnath-worst-hit/07/40/331214

Recently listed realty IPOs slip below issue price
http://moneycontrol.com/india/news/ipo-new-listings/recently-listed-realty-ipos-slip-below-issue-price/07/40/331220

Promoters see buyback opportunity in troubled times
http://economictimes.indiatimes.com/Promoters_see_buyback_opportunity/articleshow/2896758.cms

Gujarat Fluorochemicals on Monday said it will buy back up to 10%

Great Offshore and Prithvi Information have called board meetings to consider buyback proposals

Goldiam International, Patni Computers and Madras Cements have already announced their buyback plans

The Reliance Energy board approved a buyback plan involving Rs 800 crore (in the first phase) early this month

Margin financing fall may hit broking cos’ Q4 show
http://economictimes.indiatimes.com/Margin_financing_fall_may_hit_broking_cos_Q4_show/articleshow/2896767.cms

Broking fees of most firms have already plummeted in tandem with the shrinking turnover on the bourses in the past couple of months. With income from margin financing too drying up, the fourth quarter may take the shine off what otherwise has been a stellar year for most stock broking firms.

Gold, silver skid as Street sparkles

Gold’s downward journey extended for another day as stockists continued to offload stocks in the absence of any triggers. On Monday, the price of yellow metal fell briefly below Rs 12k-level in Mumbai before closing at Rs 12,005 per 10 gm. The metal had touched a historic high on March 17 when the prices reached at Rs 13,495 per 10 gm.

FIIs net buy Rs 376cr, DIIs net sell Rs 253cr

Foreign institutional investors (FIIs) were net buyers of Rs 376.13 crore (provisional) today, according to data released by BSE. While FIIs made gross purchases of Rs 2,884.39 crore, gross sales totalled Rs 2,508.26 crore.

RK
Singapore Rentals, Real Estate, Social Network

Indian Stock Market News, Views, Tips and Recommendations - 24 March 2008

Regular daily round up of the Indian Stock Market News, Analysts Views, Tips and Recommendations:-

Stocks to pick: ABB, Neyveli Lignite, Unitech, Opto Circuits, Ceat
http://economictimes.indiatimes.com/articleshow/2892778.cms

ABB
Research: Merrill Lynch
Rating: Buy
CMP: Rs 1,103

Neyveli Lignite
Research: Indiabulls Financials
Rating: Hold
CMP: Rs 110

Unitech
Research: CLSA
Rating: Outperform
CMP: Rs 267

Opto Circuits India
Research: Networth Stock Broking
Rating: Buy
CMP: Rs 326

Ceat
Research: Edelweiss
Rating: Buy
CMP: Rs 97

Stock Picks
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34849

Airtel
Current price: Rs 777.75
Target price: Rs 800

Cipla
Current price: Rs 206
Target price: Rs 225

Praj Industries
Current price: Rs 111
Target price: Rs 101

Reliance Petroleum
Current price: Rs 151
Target price: Rs 140

Tata Motors
Current price: Rs 650.50
Target price: Rs 675

Don't drive away blue-chips stocks
The stock market has shed an unthinkable one-third of its value from its peak in January. At such a time, retail investors need expert advice more than ever before.

However, experts always try to bring the real economy into the picture, as they believe the market will catch up with the former sooner or later. However, there’s another school of thought that believes the stock market has a mind of its own and doesn’t follow the trend in the real economy. By real economy, we mean corporate earnings.

This confounds retail investors who can’t figure out whom to follow. However, we at ETIG believe that long-term investment in equities is not a catch-22 situation. It can be as simple as sticking to bluechip stocks, i.e. companies which are market leaders and have a long track record of consistent revenue and profit growth.
Go to http://economictimes.indiatimes.com/articleshow/2892800.cms to read the whole article

Indicators pointing towards market stability

The stock market appears to have neared its bottom and further downside looks limited. Though the situation remains volatile, most of the current indicators are pointing towards stability. The long-term outlook appears clouded, but with a positive undertone. India Inc’s Q4 results will give a clear picture as to what lies ahead...

Go to http://economictimes.indiatimes.com/articleshow/2892802.cms to read the whole article

Brokers to give daily margin info to clients

Stock broking firms will have to notify clients about their (the client’s) daily margin positions from April 1, according to a Securities and Exchange Board of India (Sebi) directive. The move follows a spate of complaints from investors that brokers have been liquidating their positions citing insufficient margins, even though their margin accounts had enough funds

Brokers wil need to disclose this daily

Client code and name, trade day (T)
Total margin deposit up to day T-1 (including break-up in cash, fixed deposit, bank guarantee and securities)
Margin utilised up to the end of day T-1
Margin deposit on day T (including the break-up information)
Margin adjustments for day T
Margin status (balance with the member/due from the client) at the end of day.

More at http://economictimes.indiatimes.com/Brokers_to_give_daily_margin_info_to_clients/articleshow/2892889.cms

Year-end blues: Banks rush to sell bad loans
http://economictimes.indiatimes.com/News_by_Industry/Year-end_blues_Banks_rush_to_sell_bad_loans/articleshow/2892708.cms

With the fiscal year coming to an end, several banks are looking to sell their bad loan portfolio to strengthen their balance sheets. Market sources said while some banks are entering into one-to-one deals, others are considering an auction of stressed assets. Banks planning an auction include State Bank of India (SBI), Allahabad Bank (AllBank) and UCO Bank.

While SBI and AllBank are keen to sell Rs 200 crore of stressed assets, UCO Bank wants to dispose loans with face value of Rs 260 crore. All three auctions are set to take place before the end of this year. Kolkata-based Industrial Investment Bank of India (IIBI), on the other hand, plans to sell off its assets, both performing (Rs 870 crore) and non-performing (Rs 200 crore), in April.

Rising risk aversion to keep markets on edge
http://economictimes.indiatimes.com/Market_News/Risk_aversion_to_keep_mkt_on_edge/articleshow/2892704.cms

The better-than-estimated quarterly earnings of some top US investment banks last week may have slightly eased fears and given a fillip to the US markets on Friday. Yet investor sentiment remains nervous. Analysts maintain that overseas investors are likely to book profits on every rebound here on, due to rise in ‘risk-aversion’ to shares of emerging markets, including India.

Traders are unlikely to take lightly the news of Monsoon Capital, a $1.2-billion hedge fund, faring badly, as a result of the meltdown in Indian equities in the past couple of months. While Monsoon’s exposure to Indian equities may not be as significant as compared to other major funds, there are concerns that the news may trigger more redemptions from hedge funds with higher exposure to India. One of Monsoon’s funds has dropped roughly 45% since January

Nifty may see more volatile trading sessions
http://economictimes.indiatimes.com/Market_News/Nifty_may_see_more_volatile_trading/articleshow/2892743.cms

The Nifty is making higher bottom and lower top formation so far. Any breach of its previous low at 4,448 will extend the cyclical bear market further. Any breach of 4,002 will change the cyclical bear market into structural bear market. Since March 3, the Nifty is facing strong resistance with 5- & 10-day simple moving averages (SMA). Any decisive closing above these levels will be the first indication of a short-term uptrend.


Week Ahead: Waiting for global triggers
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34849

Outlook: By breaking support at 4,600, the market signalled that it could drop quite a bit more. The 4,500 support held and upside resistance was visible at 4,750. Next week will see a lot of daily volatility and the index may swing between 4,500-4,800. Breakouts will depend on global triggers.

Rationale: As this is being written on March 20, there are two extra sessions in the US where the impact of the latest Fed cut may cause a revival. Plus the local futures and options (F&O) settlement will guarantee daily volatility – expect at least one Nifty 200-point session.

Counter-view: The derivatives position suggests that there will be a modicum of short-covering and also a sharp increase in volumes as traders try to pack in carryover within three sessions.

Bulls & bears: Every sector has lost ground in the past week and in some senses, every sector is oversold. Financial stocks, metals and real-estate counters were among the biggest losers while pharmaceuticals, select FMCGs and some information technology (IT) stocks held more defensive ground.

Sensex at 19K by year-end: Brokers

http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34850 A majority of brokerages expect the bellwether Sensex to hover at 19,000 by the end of this calendar year, according to a poll conducted by Business Standard among top local brokerage houses.

The figure is significantly lower than last December when most brokerages had expected a 15 to 20 per cent return from 20,000 levels at the end of 2007. The Sensex has dropped over 25 per cent from its January peak of 20,800.

Of a sample of 20 brokerages, 60 per cent feel some pain is left in real estate and half feel capital goods may underperform over the next couple of quarters.

Tech View: Relief rally in the offing
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34838

The Nifty almost revisited its January lows of 4,450 before bouncing back a wee bit. The index slumped to a low of 4,469, recovered to a high of 4,718 and eventually ended with a loss of 172 points at 4,574.

The index broke its yearly S3 (support 3) level of 4,500 on an intra-day basis twice in the week, but somehow managed to close above it. Going by the current trend, the chances of the index testing lower levels of 4,100 and 3,500 remain high.

The charts are indicating an oversold zone. Hence, a significant pullback cannot be ruled out. However, the rally would just be a relief rally and the markets may drop again.

The significant indicator is the Stochastic Slow, which is in a highly oversold zone. The per cent D value is 9 and the per cent K is at 7.4. There will be a buy confirmation once the per cent K crosses the per cent D level.

RK