Monday, February 21, 2011

RESULTS SEASON ENDING = INVESTMENT STRATEGIES NOW =BANKING = IT = PHARMA = FMCG etc = LIKELY TO DO WELL IN FUTURE ALSO = ARTICLES SO FAR


INVESTMENT STRATEGIES NOW

THIS BLOG – A LITTLE HISTORY : The first article on this Blog was published on 9th, January, 2010 on the theme “MONEY FASCINATES’. 

There were 267 articles in 2010, which was the first year of the Blog. There are 94 articles so far in 2011.

During this period, 20,303 readers have visited the Blog.

Right now, the daily visitors rush is around 200 daily.

THE INFO CONTENT ON THE BLOG : The information presented in all the articles in this Blog is usually holistic summaries bringing before you various aspects of the results.

Wherever necessary, consolidated results are presented and analyzed. In other cases, stand alone results are analyzed.

Key and authentic information which companies intimate to NSE are also briefly mentioned in most cases – so that these authentic info and News from the company can supplement the results – in assessing the company’s present performance and future prospects. Readers may kindly go through them also without fail.

In some cases, where the companies themselves are giving out  good info  on various aspects of their working, the same is  taken up and presented in brief.

FUTURE IN THIS BLOG : Now that the results season is slowly tapering off, this Blog will cover the results of more premier companies which have presented heart warming results in this season and simultaneously, present before you many INVESTOR EDUCATION SERIES articles.

Also, Industry-wise analysis will also be taken up – so that readers will have more guidance to go by, in selecting good companies for investment.

There will also be significant qualitative shifts – to enable readers to make better judgments.

While all this information is useful to all types of investors, it is more useful to the medium / long term investors

I am a strong follower of Warren Buffet’s Investing Principles. If we go by these Principles, we are almost sure to succeed in our stock market Investments.

Reason is –

Ø  India is Growing at a Fantastic rate of Growth.
Ø  Many sectors are Growing Faster than India’s average growth Rate.
Ø  Some companies are growing very consistently at a very Good Rate.
Ø  When, such companies are available in plenty – there is no need for any Investor to look outside of them.
Ø  With such companies, we will not fail in the medium to long term.

INVESTMENT STRATEGIES FOR THE FUTURE :

This Blog suggests the following:

Do not go for sectors which are underperforming and are under some big problems now and for some time in future. Telecom is one such, right now. We do hope, Government and all others will ensure that they do not kill this golden goose, in their Political Battles.
As Individual Investor, Go for good growth sectors, which are not in such problems.
Banking, IT, Pharma, FMCG sectors are reasonably free of most of these problems. These have very little gestation periods and are constantly growing. They contain some excellent companies, which are constantly growing

BANKING SECTOR : Both Public and Private sector Banks in India are growing at great rates. There are very few failures in this sector and the scope for any failure is very less in this sector – as Banking is a well regulated sector in India. In my view, RBI Policies are unlikely to affect Banks in any way even in the medium term, since interest rate changes will take place both in deposits and loans and margins will be maintained. With growing automation, product diversification and branch expansion, all Banks in India still have a huge room to grow. There is no saturation point in sight right now. Some of the Banks are growing at over 20% rate consistently for several quarters now. There are many present and future stars in banking sector. I do expect some of the stars to grow much beyond Indian Frontiers.

IT SECTOR : IT sector has some very good candidates. TCS and INFY are the stars. There are also others, which are coming up well in the IT sector. As Africa, Asia, South America and other continents develop, our IT sector is spreading in all these places. There is good room for good, innovative companies – which consistently develop their human resources.

PHARMA SECTOR: In Pharma sector, there are many present stars and also many very good dark horses – which are likely to become tomorrow’s stars. Some of them are growing consistently.

INFRASTRUCTURE SECTOR : Infrastructure sector is good but dependent heavily on Government spending. We need to watch for the Budget allocation for this sector. Both central and State Governments, in my opinion, are frittering away huge funds on schemes like NREGA  in a non-productive way. Many state Governments are frittering away funds in more populist and unproductive ways. If these are diverted to more productive sectors like road building etc, employment generation will go hand in hand with asset generation on a long term basis. This can be done in rural sector also to generate rural employment.

ELECTRICTY GENERATION: This an EXCELLENT SECTOR – but one has to wait for 2-3 years till the capacities come up.  There are many FUTURE STARS in this sector. Those with that much time horizon can surely go for these companies, at current low prices. In my view, profits are assured in this sector.

In Banking, IT, FMCG, Pharma sectors, Look for companies producing an average growth in sales of over 10% every quarter, for at least the last 5 quarters.

In electricity generation, you can only look at their project execution skills and the capacities they are building in the coming months/years.
Look for consistent Growth in operating profits as well as Net Profits in the last 5 quarters.

Look at the Basic EPS – and be sure it is growing at a consistent rate.

Look at the current Price earnings Ratio.

Select those which are not preferably exceeding 20 PE.

Some companies with higher PE (Like TCS) are the darling of FIIs, DIIs etc for all time. This rule therefore does not apply to them.

Look at the Future Growth Plans. Those which are likely commission any huge additional capacity in the next 9 months will grow faster and reward faster.

Seize them before others do. Markets wake up in the last 3 months usually. 
Long term investors must wake up much earlier.

Most Banks are adding 100-150 Branches each year.
In coming days – efforts will be made to present a few of such metrics – for the readers to identify the stars and future stars from amongst them.

Readers may kindly watch out for future articles.

Readers are also requested to kindly give their suggestions, additions, corrections etc – all of which will be gratefully received. Coverage of other companies of their choice will also be attempted, to the extent feasible.

The following list contains articles already posted in this Blog during January and February,2011 in Alphabetical order.

Readers can press control key and click on the title given here to access the article in the blog straight away.

Upto sl.89, you will find articles on various companies which declared their results in this Results season. Thereafter, you will find other interesting articles.


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