Nifty makes history, surges past 12,000
Sonia Shenoy could barely control her joy today.
“Nifty hits 12000,” she said while grinning from ear to ear.
She was mobbed by her massive army of 1.51 lakh followers, all of whom were delirious with joy at the massive gains which were efforlessly gushing into their portfolios.
Nifty hits 12000 ?
— Sonia Shenoy (@_soniashenoy) November 6, 2019
A careful study of the data reveals that the gains are evenly spread amongst the PSUs and the Privates.
BPCL, the Blue-chip OMC behemoth, led from the front with a massive gain of 35%.
It is worth recalling that Ramesh Damani has advised us to tuck into the PSU stocks, with the assurance that we cannot go wrong given their rock-bottom valuations and high dividend yields.
He has predicted that if the PSUs get their act in order, we can effortlessly make up to 300% gain (see There Are Astonishing Bargains In PSU Stocks. They Can Give 3x Multibagger Gains: Ramesh Damani).
Nestle, Asian Paints and HUL, the trusted Blue-Chip war horses, also delivered massive gains ranging from 18% to 29%.
Saurabh Mukherjea has already counselled us to grab these stocks irrespective of their nose-bleed valuations.
His point is that these stocks have an impregnable moat which allows them to decimate the competition and rake in massive gains, year after year (see Saurabh Mukherjea Recommends “Tremendous Wealth Creator” Stocks With 6x Gain Potential For Us To Buy Now).
Bajaj Finance, which was recommended to us by Basant Maheshwari, also thrilled with a hefty gain of 17% (see Get Ready For Mega Gains Says Basant Maheshwari While His Portfolio Stocks Surge Like Rockets).
Bajaj Finance has given incalculable gains over the past few years and is presently coasting at its life-time highs.
NIFTY HITS 12000
Nifty Last hit 12000 on Jun 11, 2019
Big Gainers Since Then
Asian Paints +25%
Bajaj Fin +17%
ICICI Bank +12%
Reliance +10%@NSEIndia #NiftyHits12000#StockMarket
— Mangalam Maloo (@blitzkreigm) November 6, 2019
However, there were also disappointments.
Yes Bank led the rogues’ gallery of losers with a massive loss of 50%.
Other junk stocks like Infratel, Coal India, etc also caused massive disappointment to their beleaguered investors.
— Mangalam Maloo (@blitzkreigm) November 6, 2019
Always buy fear
Presently, the novices of Dalal Street are strutting around like Millionaires, their pockets bulging with gains.
However, it is difficult to believe that just a few months ago, the same novices were cowering in fright and cringing at the thought of buying stocks.
Sanjiv Bhasin was one of the lone voices at that time, urging us to take advantage of the situation and buy stocks.
“I was one of the few who was telling buy the fear and these 12 weeks will see a huge upside over a period of time. I am being proved correct. Sensex has hit a new high and it is just a matter of time that Nifty goes to a new high. But that is not the key. The key is participation and buying the fear,” the veteran investor stated, with a big smile on his face.
He explained that during the downturn, the Government, led by NAMO and Nirmala Sitharaman, did what they could to prevent the stock prices from being decimated.
Obviously, their Herculean efforts have borne fruit.
“I still think the midcaps are extremely attractive. If you have a longer term view, then there is no holds barred,” he advised.
FIIs are like novices. They sell low and buy high
Sanjiv Bhasin made it clear that he does not have much respect for the escapades of the mighty FIIs.
“It is a perfect storm. The largest selling was by the foreign institutions at 10,700,” he observed.
“We are at new highs and now they have turned buyers,” he added.
“FIIs generally sell low and buy high. That is the nature of the beast” he smirked.
“Take out the data and you will see FII selling is maximum at a time when the markets have bottomed and generally at a high they are buying. I am not challenging their consistency,” he added.
“The real money is that you have to bell the cat when fear is at its highest,” the veteran advised.
Five Bank stocks that are a must-buy
Few are aware that Banking stocks have been an incredible out-performer.
In the period from 2000, the Bank Nifty (which comprises of the choicest private and PSU bank stocks) has given a mind-boggling gain of 2581.47%.
This outperforms the Nifty, which has given 638.68%, by an impressive 4x times.
— Milan Vaishnav, CMT, MSTA (@Milan_Vaishnav) November 5, 2019
Naturally, Sanjiv Bhasin has come out with all guns blazing in favour of banking stocks.
“If I could stick my neck out, five banks where I think a lot of money will be made in the next one year would be DCB, Federal Bank, IDFC First and two of the PSUs – PNB and Bank of Baroda,” he opined, his eyes sparkling.
He pointed out that the Banks will come out with relatively steady numbers will also enjoy credit expansion because of the fiasco in the NBFCs.
It is worth recalling that Sanjiv Bhasin has already boldly declared that IDFC First Bank (which is led by the dynamic Vaidyanathan) is the “Next HDFC Bank” (see Sell HDFC Bank & Buy “Next HDFC Bank” Stock To Make Multibagger Gains).
"Turning into profitability is a good moment for us, but as a bank we are focused on building a solid foundation for long-term growth", Mr. V Vaidyanathan, MD & CEO, in conversation with Economic Times, 6th November, 2019https://t.co/7c8x3fCKSt pic.twitter.com/EcSyyOgTNd
— IDFC FIRST Bank (@IDFCFIRSTBank) November 6, 2019
Why not just buy Bank Bees ETF?
Taking a cue from Sanjiv Bhasin, we can consider tucking into the Bank Bees, an ETF of the best bank stocks, instead of messing around with individual stocks.
The performance of the ETF over the past few years is quite impressive and is likely to continue given that all the stocks in it are powerhouses.
The latest composition of the NIPPON INDIA ETF BANK BEES is as follows:
|Name of the Instrument||% to NAV|
|HDFC Bank Limited||33.26%|
|ICICI Bank Limited||18.13%|
|Kotak Mahindra Bank Limited||12.78%|
|Axis Bank Limited||11.69%|
|State Bank of India||9.06%|
|IndusInd Bank Limited||6.42%|
|Yes Bank Limited||2.43%|
|RBL Bank Limited||2.19%|
|The Federal Bank Limited||1.44%|
|Bank of Baroda||1.09%|
|IDFC First Bank Limited||0.73%|
|Punjab National Bank||0.70%|
PSU stocks are available for a song, Buy the CPSE ETF
Sanjiv Bhasin advised that PSU stocks offer the perfect match between risk and reward.
“PSU stocks are available for a song and if you really do get this strategic disinvestment in Concor and BPCL, it will set the cat amongst the pigeons,” he stated.
“I would definitely recommend to investors, keep your SIP in CPSE ETF. As an instrument, it will do wonders,” he added.
“The whole basket is looking extremely value accretive given dividend yields and given the decimation of market cap,” he opined.
The composition of the CPSE ETF is as follows:
|Indian Oil Corporation Ltd.||Petroleum Products||20.25%|
|Coal India Ltd.||Minerals/Mining||19.89%|
|Power Finance Corp. Ltd.||Finance||7.85%|
|Bharat Electronics Ltd.||Industrial Capital goods||5.96%|
|Oil India Ltd.||Oil||3.15%|
|NBCC (India) Ltd.||Construction||1.80%|
|NLC India Ltd.||Power||0.79%|
We get a nicely diversified portfolio with top-notch PSU stocks from different sectors.
The worst performing sector, autos, will see the most gains
It is no secret that the auto sector has been the worst performer and are available at throwaway valuations, though they have also seen impressive gains in the past few weeks.
Sanjiv Bhasin advised that we should tuck into stocks like Tata Motors, Ashok Leyland, Maruti, Eicher Motors, Hero and Bajaj Auto without further delay.
He also singled out M&M, which is presently in the dog-house owing to the recall of the XUV300 units to fix faulty suspension components.
“I would trust the management, one of the oldest automakers which has kept its identity right from the original Sensex. In M&M, all declines are buying opportunity,” he advised.
“This small recall will give you an opportunity to buy the stock. I think it is just an aberration. We are very optimistic on M&M and select autos now,” he added.
“The best thing is that the worst performing sector in the last two months has seen the best gains,” he pointed out.
“Let the diehard pessimists wait for declines. We still think autos will see a huge uptick in 2020 and we are not investing with a three-month view. I have a buy on Tata Motors, Ashok Leyland, Maruti, Eicher Motors and among the two-wheelers it is Hero and Bajaj Auto,” he declared with a flourish!