8 Month Update

A very happy Holi to all. As the markets were closed these last 2 days, I took the liberty of updating this page 2 days after the 9th. I am happy I delayed it as a swallow has been sighted and it may be the harbinger of spring and an end to the long and cold winter. The last 2 days the US markets are surging. Most markets across the world had fallen more than 60% from the top and it seemed the US would also follow suit. The US markets have much more depth than any of the emerging markets and chances are that it would not go below 6500 on the Dow. Yesterday that Dow was more than 6% up and today also it has opened positive. My guess is that the US market has bottomed out. The Sensex may or may not have bottomed out. But this is a great time to buy. The best of companies fall the last and are the first to recover. So watch out for the ones that will surge 5-7% in this month or the next. These blue chips should be good to buy for the long time. Good telecom companies are still going strong. 2 wheelers sales have picked up and 4 wheelers (retail) are also showing signs of coming to life. Inflation is down to 3%. Steel industry will benefit from the pick up in auto sales. Even banks like ICICI have grudgingly reduced rates. Even the layoffs in India are almost done with. I believe that 3 more things are yet to happen. One, the Interest rates are yet to come significantly down. Two, real estate yet to collapse and three, gold prices are yet to come down. People who have made a killing in gold will slowly sell and come back to equities which are very attractive levels. The money locked in FDs will also come to equities as with lower interest rates they will not be attractive for long.
With the elections just around the corner in India and things slowly turning around, the markets will not surge up in a hurry. But Tata Steel at around 150 and SBI at less that 900 might not be available by the time elections are over. If a single party get a majority then it is surely impossible to see such attractive prices in future.

My value picks are still out performing the nifty by 0.7% while the normal ones are underperforming by more than 15% !

Wishing you a Happy Holi once again and happy investing.