Dead End for Poor Quality Stocks, Speculators may be wiped out ,Hide behind Quality for Recovery

World over Equity markets were booming on cheap and borrowed money.It seems that process of contraction is knocking on door.Unfortunately many of small investers has been draged in unknown poor quality micro,small and mid cap stocks by manupulatrs and speculators .Such has been froth that speculators in chiefs have been made new Stock Market Heros and Quality Pickers has been reduced as jokers .But now I am afraid ,Sun is finally setting for speculators. Small investers who are busy speculating in name of investing under motivations from speculators in chiefs, may face rough time if they did not change their gear towards quality even now.But those who are investing in strong quality blue chips or fundamentaly strong stocks even down the order may further buy on down trend if they have still some cash, for a sure recovery in long run ,which always happens.But for speculators and their blind followers ,I am afraid ,dead end is in sight.This thread is just for discussion.Happy investing,Stay with QUALITY.Sun never set for Quality .

 

Dear kharb,
You are right in some sense, actually the secular party in Mid and Small cap stocks have come to an end, but the stock specific story is still intact. So only BLUE chips are not the solution of a balanced portfolio.

Look at the stocks in Mid/Small caps which are based on Indian internal consumption theme. I am bullish on PVR, Godrej Cons, SRS Ltd, Tata Global Bev, Emami, Castrol, Pincon Spirits.........and the list goes on.

Share price is a function of the underlying company's profit; in these stocks there is nothing to do with China. Pay commission and a good monsoon can lift these stocks.

I am also looking to some stocks which are in pressure now -

Tata Motor
SBI
Axis bank
United Spirits
DCB Bank

Today I have bought Tata Motor(D), Axis Bank, Dish TV, SRS ltd in small volume.


Except Metals and Oil exploration stocks, Financials, Auto, Consumer, Paints, Retail sector may do well in coming ONE year.

Regards.

 

Totaly agreed ,as Thread Headline itself indicates focuss is on Quality.QUALITY even if mantained with mid or small cap stocks is a good idea ,if you have ability to analysis.But for speculators it is easy to fool public with small and Unkown names presented with cooked stories as future growth story.More over known and proven fundamentaly good stocks are available at reasonable price,so why not to do slow bargain hunting there by avoiding speculative stories.

 

Quality always wins is my belief since long time that is why I always advice against junk stocks. New investor get attracted to junk stock and burn fingers badly in crises situation like present one where there are no buyers for junk stocks. I also learned lesson hard way

 

Some good quality midcap stocks which can be good bets to buy at current levels are-

Pantaloon Fashion and Retail Ltd
Heritage Foods
Repro India
Tata Global Beverages
Dish TV India
Sudarshan Chemicals
Capital First
Praj Industries
NIIT Ltd
Shemaroo Entertainment
Wonderla Holidays

The current dip in the market can be used to accumulate good quality stocks at bargain prices. I think these stocks can do well in the next couple of years.

 

Why there are no Pharma stocks even though they are best performers since long time. I think stocks like JB Chem, Ajanta, Shilpa can be added as basket (FDA risk). Stocks like Heritage, Repro, CAPF are also 100% safe stock in long term. There are many blue chip midcaps stocks that should be bought in current crises situation IMHO by way of SIP.

 

Yes sir you are right. But the FDA risk is increasing with many companies given warning letters. I personally like JB Chem, Cadila, Torrent Pharma, Shilpa, Biocon from the pharma and research pack.

 

Good thread. Death knell is sounding for companies with dubious fundamentals touted as next big story and recommended by online forums. If you observe, many small caps doubled, tripled in the last 2-3 months just because of some recommendations. Quality small/mid caps will survive.

Many small caps are available at very high valuations and even quality mid caps and large caps are trading below those valuations. Time for a switch is what I believe strongly.

For example, why would I buy an illiquid small cap company at 20 times FY17 PE when I can get say a Repco home finance with visible 30% growth for the next few years and high management pedigree at 25 times FY17 PE?

Disclosure: I hold Repco home finance and it was just an example I quoted.

 

This is very good point.

 

How about Lupin.Since march it has not given good returns but it has no FDA issues as of now,strong pipeline. Most of the approvals are pending since 2013 and will have to be cleared soon by US FDA because they also have a deadline.Its acquisitions (because of which the stock took some beating) are also supposed to start contributing to EPS from next quarter onwards.
I personally have Lupin,Torrent, Natco, Aurobindo in my portfolio

 

Not very bullish on Lupin. Not too sure how much and when its acquisitions will start contributing. Also not too sure about what will be the exact fate of its pending approvals. But that's just my personal thinking. May be wrong.

 

Sucker's Rally Under Progress in poor quality small and mid cap unknown illiquid stocks.Sucker's Rally is A Big Rally Minus Fundamentals .,Only basis Money Pumped ,Stock Jumped.After that money supply dries,stock dies.Operators will now try to come out silently and poor small investers will be left with duds in their portfolio, never to recover and they blaming stock market as Satta Bazar ,never to return back.Hide Behind Quality,time is running out.Fundamentaly strong quality stocks are available at reasonable price.After End of Sucker's Rally,who knows HEROS and King of Speculative Times may turns into VILLAINS .History Repeats but unfortunately in stock market only few learns .

 

When a share goes up jackpot kings shout money rain but are silent when the same share gets a beating the next day. Also there are some ace manipulators very active in the market. But they have taken so much precautions that they will never get caught. Only retailers will suffer. Just read the MMB forums. People who invested in duds have lost huge amounts while the Father and Mother of Duds have disappeared.

 

Dear Sirs,
What is your opinions on Granules, Lincoln, SMS Pharma - whether we could add on the above lists?
Regards
Krishnan

 

Sir who you are referring to? All my good quality stocks are also deep down like TCI, Gati, JB, Granules, TV Today, Pokarna etc. I am in big loss sir even in good quality stocks It is very ugly and sad situation for me because there is also no money for buying stocks now to average cost.

 

Speculator shares have lost more. See performance of morepen and saksoft in last 5 days. These stocks were favorite of ace manipulators and MMB platinum and gold boarders. At least quality shares will recover. What about poor quality stocks?

 

"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

- Sir John Templeton

 

knowing where they are (lapping in luxury) will only add to the pain felt by their many followers.

In this, small investors ( where greed is a hallmark) should share the blame too

 

I just heard Porinju saying on tv that mid cap stocks pain to remain, as many stocks has multiplied many times without any change in fundamentals.Great analysis and words of wisdom by Porinju .....But I am confused.Now big question is ,Who was Recommeding these duds till two weeks ago and guiding small investers to Unkown, poor quality ,illiquid stocks.?Can members help me....to find out ????

 

Quality stocks like DHFL, L&T Finance in midcaps, ITC, Britannia, HDFC, HDFC Bank in large caps will not get affected and will recover. I just named a few. There is whole lot of quality bunch available. Like Graphite India, Bhansali Engg in Small caps are unaffected in this fall.