As per my last month’s posting, the scenario 1 is being played out with the sensex moving around in a small band. The result season is here and its best to wait for they to get over before taking a call. If the average bottom line don’t show a 30% YOY increase , then we are in for a decent correction. Most of the blue chips are trading above a 26-27 P/E and business is not actually roaring at the moment. People are just making up for the depleted inventory and human resources. Once they are up to decent levels not much upside can be seen in the short term.
This does not mean opportunities exist. Airtel is a classic example of what Buffet would term as “stock beaten down by an irrational market”. It’s biz is best in the vertical, great management and available at a very cheap price. There are others also but not many blue chips. At these levels you might want to exit any bad eggs in your basket. If at these levels also they are at a major loss ( say 40-50%), its best to exit these.
My value picks below continue to beat the nifty by 58% !
No comments:
Post a Comment