Wait and Watch Large Cap Stocks for Next Rally,Time to Forget Unknown Poor Quality Small & Mid Cap

Retail investers has been swept in Sunami going in Stock market specialy in Unknown Small and Mid Cap Poor Quality Universe.This carnage was on expected lines and repeat of past history from which unfortunately small investers will never learn.But Sunami will also pass , after that it will take some time to absorb the shock.That will be time to Keep Large Cap Blue Chip on wait and watch list.They will certainly recover after this severe beating which is going on due to crisis in other parts of world.There are many large cap stocks which may lead the rally . HDFC bank,Infosys, RIL,Maruti,Asian paints,HUL,L&T ,Ultratech Cement ,Lupin ,LIC housing may be some large cap stocks to watch in addition to many more from a long list of large cap blue chips to chose from for long term stable Portfolio. I never recommend any stock,and all my posts are just for discussion and my personal views.

 

@kharb i think the bottom is made and upward momentum will be starting in short time and move will be slow.

 

100% agreed. But instead of large cap blue chips better to look at blue chip Midcap stocks with same management quality, moat, strong brand, low debt etc. I think blue chip mod cap stocks are worthy of investment now.

 

Agreed that blue chip mid cap universe is attractive due to growth but unfortunately only highly expert can play that and small investers are dragged to poor Qualty unknowingly by speculators by misinformation and artifical hype. I recommend this space to be left to experts and better played through small and mid cap mutual funds. Definitly my post is not targeted to experts ,but for small investers who might have been hit badly and may be thinking to leave the market place looking it a dangerous unsafe place.

 

I don't think that the bottom is made. Offcourse there will be a upward momentum but that would be a "Pre Budget Rally". The real course / track/ direction of the market will be decided on Budget day.

 

How about Colgate? Colgate has so far been a market leader in Oral Hygiene space but some experts say that Patanjali may soon displace Colgate from its leadership position. How about Gillette, Bata, Relaxo footwear, Britania ?

 

Sector leaders are always good play because of size of 1.3 billion consumers .So any sector leader which you think can mantain leadership atleast for some time are always good buy in correction or at lower prices.There are many to chose from.Without naming ,I would like to say that FMCG is a very serious business needs lot of quality consistency and innovations .You have seen how a small failure results in controversy seen in Cola Cadbury and Nestle. I don't believe in some temporary hypes in friendly political environment as these all are reversible and no more than big type deshi unbranded namkeen type manufaturer.

 

@kharb which small cap mutual funds are you invested? what returns did you got?

 

In my opinion, instead of looking for largecaps, try and locate midcaps which have the traits to become largecaps.

As they say, ''kyuki saas bhi kabhi bahu thi''... similarly ''Largecaps bhi kabhi midcaps they''...

All our largecaps Infy, Wipro, Sun Pharma, RIL etc were midcaps at some point of time. And the people who invested at that time are basking in unimaginable riches. But now the returns from these companies have moderated significantly.

I always try to locate such midcaps which have the ability to become largecaps in the next 10 years or so. instead of betting on largecaps where saturation has more or less set in. A company cannot keep growing for 30-40 years at the same pace. After becoming largecap it loses steam at one point of time and starts delivering nominal returns of 10-15% yoy.

I agree that one should not invest in junk midcaps but I also strongly recommend that instead of investing in largecaps, one must invest in quality midcaps only. Thats where the real returns are to be made in the future.

 

I am too agree with @Parin Gala I am still 25 and looking for such midcap which can me millionaire after 10 years Those large cap has already run up too much.

 

I fully agree that there is no better investment than finding some small cap which can become future large cap.But you need to remember there are thousands of listed compnies trying to become Large cap.Manyof them just vanish without trace.99% of midcap remains either midcap or even become small and microcap.Less than 1% gradute to become Large cap.It is like few become Rakesh Jhunjhunwala vs thousands of small investers who has lost .As per my experience it is much more difficult to make money then it looksGeneraly winning bets are glorified and losers remain confidential..I don't deny few Great Investers may find hidden gems among many who will remain rag pickers in poor quality Unkown small caps .But to a chicken hearted like me it is safe to bet on known leaders as probably 75% may be able to mantain leadership for next 10 years than to be brave in unknown. But still fully agree that there will be few more RJ who will find hidden gems and naturaly my this post is of no use to them and best of luck to all those braves.

 

@w4wealth - my targeted returns from equity are only 15 to 20% and more then sensex CAGR ,which will disappointed many readers,but only they can answer whether they are actualy doing better then this Any body doing better then this for 10 years or longer are genious to me and is like respectable market Guru .I have great respect to these Gurus for doing it for decades.

 

which mfs ? what were the returns?

 

There are many good large small or microcap mutual funds in market.But I am investing in Franklin smaller Compnies fund,Relince small cap,DSP microcap and Mirae Emerging Blue Chip,hdfcmid cap.I have also my old investment in birla and ICICI mid cap. I have also my very old investment in HFDC equity, Relince growth,ICICI dynamic when they were young.But further investment are going in small cap funds since last two three years.

 

@Parin Gala this Top 100 Companies by Market Capitalization report by BSE can help us to find the potential midcap which can be large cap in long run.

 

There could be more pain at global level which will haunt India to a certain extent.

 

It seems QUALITY large cap have bottomed out or are very near to bottom.Another sharp fall in poor quality is still big possibility .

 

Yes bank seems a good bet amongst private banks.

 

Numbers are good but some experts saying numbers too good to be true. Is it window dressing is the Q.

 

Large caps are firing