Airline Stocks

Why they may once again become the darling of investors …

Most of us had virtually written off airline stocks a few years ago. High fuel prices, hostile operating environment, tough competition and poor airport infrastructure was taking its toll. That seems to be changing. It is not about oil prices alone, but a lot more… Continue reading “Airline Stocks”

Is it the time to shift from defensives to cyclical stocks?

For the last couple of years, it is the defensive stocks that have outperformed the market. Be it IT, pharma or even FMCG; they have vastly bettered the markets. On the one hand, these companies enjoyed sustained growth and high levels of ROI. A sellers market ensured that margins were also quite exciting. A lot of that seems to be changing gradually. The question that arises is whether investment strategy must shift from pure defensive plays to a more aggressive play on cyclical sectors. While the shift may not be immediate, the first signs are there for the shift. Let us understand the reasons…

Continue reading “Is it the time to shift from defensives to cyclical stocks?”

Create your own trading rule book

What does a trading rule book mean?

It is a set of rules and discipline points you will not transgress at any cost. You will not deplete more than 20% of your initial capital. As a 50-year old person you will not have more than 40% of your money in equities. You will make it a point to book profits if returns on a stock cross 30% in a quarter. And you will be out of equities at a market p/e of over 25. So on. Continue reading “Create your own trading rule book”

How to buy penny stocks profitably

Penny stocks have a broad range of definitions. In the US, penny stocks are the ones quoting below $20. In India, stocks quoting below Rs.20 are normally classified as penny stocks. There are some amazing penny stock success stories in India. Eicher, Crompton Greaves, SAIL were all penny stocks before they became multi-baggers. But the key question is how to identify them and trade them?

Penny stocks can be a tricky game…

Back in 2001, at the peak of the 9/11 equity paranoia, I remember a couple of large steel traders aggressively accumulating SAIL at Rs.3/-. Although, I was never a great fan of penny stocks, I was quite intrigued by their sudden interest in SAIL. More so because, as steel traders, they understood steel much better than most others. Not surprisingly, they made a real killing! Continue reading “How to buy penny stocks profitably”

Technology Churn

The good news is that Indian IT is prepared and adapting…

It was a disappointing quarter for technology stocks. Most IT stocks announced results that were either below expectations or indicative of larger problems. Despite the sharp correction in most IT stocks (10-15%); investors refuse to be convinced by the IT story. Should they buy at lower levels or avoid the IT space for some time? For that, one needs to understand the shifting epicenter of Indian IT. Continue reading “Technology Churn”