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'Sensex to be range-bound till Budget'

June 01, 2004 19:39 IST

'The market is in a trading zone, perhaps till the budget. However, long-term investors should be buying,' says Ramesh S Damani.

chandani : hello sir, so now we are in trading zone?? is it safe to short when market has risen more and buy when fallen considerably?
Ramesh S Damani : Hello everyone. Thanks for joining. Lets start. market is in a trading zone, perhaps till the budget. However, long-term investors should be buying.

Kans : What is Technical analisys and Charts etc. relates to stock market. In my view they are nothing but generalising investor behaviour based on some past history rather than looking into the fundamentals of a stock / index? What is your view on this?
Ramesh S Damani : yes, but history may not repeat itself, though it does rhyme. Technicals allow you to size up the market. It is a helpful tool.

Kans : Will the downward revision of Rupee Vis-a-vis USD make tech firms more profitable?
Ramesh S Damani : it should, but many companies are hedged already, so no immediate impact.

a shah : Mr. Damani as market is keeping below 5000 level now and almost all brokers are advising to trim the exposures on every rise do you see entering into bear phase is becoming more and more real...or you still prefer to wait before confirming it
Ramesh S Damani : by strict technical indicators a bear market has started. However, my instinct tells me we need to give some latitude in emerging markets.

ajaymatt : thanks ramesh for suggesting Joe Granville. This guy is awesome regarding predicting top and bottom of bull cycles?thanks a ton
Ramesh S Damani : sure, enjoy his books a lot.

a shah : Mr. Damani, though we might be entering in to dull phase a good monsoon can do a lot of good to our economy. If one takes a call considering monsoon is good and I won't to buy some great value buys for a year horizon which ones you recommend strongly to buy at each instance of market plunge in next one - two month.
Ramesh S Damani : With profits growing, GDP will also grow. I remain optimistic on the outlook for equities. Oil remains a worry.

shaista : sir , I have sold all my stocks and now i do not want to invest in stocks as i hate the stocks for that monday fall which shows how much safe is your money in the stock market. can you tell me some other avenue for investing for one year?
Ramesh S Damani : we don't have too many alternatives to stocks in India. May be starting your own business. . .

Sharad : Sir, I want to learn Technical Analysis methods, where can I join a course on Technicals (in Mumbai)?
Ramesh S Damani : Try bseindia or deepak mohini, they hold courses on the same.

MALIK : sir the results of Kale Consultants are out. What is your view on the scrip. Whether it worth to buy at Rs 38 and hold? Are u bullish on the scrip?
Ramesh S Damani : yes, they should have a much better year this time around.

ahmedabadguys : Mr. Damani when is Mcdowell result? what kind of div. payout is likely?
Ramesh S Damani : generally Rs 2 , results have never been good, so don't hold your breath.

AnandBhatt : Hello Sir, do you think this budget will be a populist budget, leading to a fall in the markets post-budget. The Left has already started making noises about Airport privatization, etc. The only focus seems to be on agriculture.
Ramesh S Damani : Sure, so lets look at some agriculutural stock. we will have to wait for the budget to see the exact policy. If they raise taxes that would be a bad sign.

basantmaheshwari : Do you buy the argument that a bear market will substantially hit the viewership of TV-18. All major funds Reliance Templeton are very much invested in this. Would you take a look at this at about Rs 200 crore. Company is planning for a Hindi channel launch in Last quarter of this year and marketmen it appears would like to be sure about the profitability of the channel rather then see it go the Headlines today way. Please answer.
Ramesh S Damani : basant, i have answered this Q for you many times. Don't look at a quarter, look five years ahead, they have a good business franchiseless competition and ad spend is going to increase, Moneycontrol will be a huge asset. You must learn patience while investing. Great profits come from great conviction.

joael : mr.damani what other books other than granville, lynch are worth reading?
Ramesh S Damani : look up books on Warren Buffett.

AnandBhatt : Sir, can I get this Joe Granville book in Bombay at any bookstore?
Ramesh S Damani : no, it is not in print. You may find it with someone or at a library.

ahmedabadguys : Mr. Damani one of the prime reasons for the recent fall is due to FII pullout. Do you smell another few months of FII pull out or you see India escaping fii pull back?
Ramesh S Damani : they have sold only small amounts. They are not the cause for the fall.

AnandBhatt : Sir, I heard many agriculture stocks are unlisted. We have Jain Irrigation, but the management is a big question mark as of what I have heard.
Ramesh S Damani : here is a sampling of stocks i am looking at. KSB Pumps (water pumps); Sygenta (seeds), Swaraj Engines (tractors), VST Tiller (in AP). All are decent companies with good yields and should do well provided monsoon is good.

baracuda : vijay kelkar is going to play a major role in this years budjet is game plan of reducing the revenue defecit and thus controlling fiscal defecit seems very practicalincrease tax gdp ratio by1% broaden the service tax and excise collections will add another 2% reduce central govt int burden by 1111111% will add 1% and implement vat will add 1% i think the fm may just about make it and that should make investors a liitle happy
Ramesh S Damani : kelkar is wise man and if PC listens to him i would be happy.

HiDamani : what is happening to ur favourite stock - SBI sir? I have recently added more, have i taken right decision?
Ramesh S Damani : it has fallen with the rest of the banking stock. results are still in line.

sureshmakhija : In security analysis benjamin told that company's intrinsic value could be found by estimating the earnings of a company and multiplying those by an appropriate capitalization factor. Sir, what he mean by capitalization factor can u explain sir plz?
Ramesh S Damani : the p in p/e, i think. PE is the multiple which the market gives to a stock.

anilgupta : do you think that in coming budget exemption on capital gain tax will be removed as looks by the policy of new govt
Ramesh S Damani : it could, but the market could handle that at 10%, putting tax on dividend would be far worse.

Kiran : Hello Ramesh, I have been reading your scripts more than a year. So far I have never seen any of your recommendations (Mcdowel, Macmilan, Balaji telefilms, Godrej, Goldium, Logix, ShreeRaj syntax and many more) give good returns. I am wondering how you got such a good following even though your recommendations are not successful. I agree that no one can predict the market, but still most of your recommendations are total flop. Do you think that you need to look into it?
Ramesh S Damani : sometimes you need to look at markets in perspective. I have recommended PSU stocks which did well, and tech before that. It is hard to say when a sector or stock catches fire, you need to buy good companies and hold them as long as they are performing, trying to chase the market favourites in my opinion foolhardy. The logic is important, not what the market decides in a few trading days.

vikas6 : Man Ind : Don't you think its great stock . It touched 160 and now 70. It has 1000 cr. turnover expected in 05 from 500 this year. profits a re also very good
Ramesh S Damani : they have some capex so results will be flat for one year.

nitulb : Ramesh Bhai, what's your opinion on Tata Chemicals & Tata Investment Corp as long-term investments, considering the expected TCS IPO being positive in the short term.
Ramesh S Damani : it would help them. No question.

anilgupta : for the current govt the only option is to raise the fund for their populist measure is to raise the tax, so they will increase the tax
Ramesh S Damani : that would be bad news.

vvinay : sir, I was going through past transcript you had once mentioned KRBL as a buy now with focus on agriculture sector can one get in it at current level
Ramesh S Damani : i dont believe, i have recommended KRBL.

sanujkadavil : sir what about UB Holdings. last date delivery of 100%. do you think Winstar is accumulating Ub Holding. stock not loose ground in the meltdown
Ramesh S Damani : not heard from Marc Faber yet.

AnandBhatt :  Sir, what do you feel about Tech? People are calling it a defensive play. It's strange what is being called defensive was once called a growth sector. I bought some Tata Elxsi at 100.
Ramesh S Damani : it is ironical. i am comfortable with tech at this time.

narayan : sundaram fin net up 22% its also thinking to be a bank already paid 70% div. r u satisfied with the result can one add at current level
Ramesh S Damani : yes and the subsidiary is starting to make money look at the consoldiated results. it is a slow but steady compounder.

MALIK : Sir, Till March your were bullish on ONGC and adviced
that retail investor should invest in the public issue. Please advice now whether to hold this scrip or sell in the market as the price is falling every day
Ramesh S Damani : yes, i did. however with new govt in place clearly it does not look so attractive.

Giri : Balaji Telefilms hasn't given good results. Do you still think it would be a long-term bet? Is it having the growth potential?
Ramesh S Damani : it has too.

HiDamani : Sir , important question, u say that by tech. reasons , bear market has started , so should we wait for some time and then book losses? also please tell , are u planning to exit some stocks? because i am still willing to hold for 1-2 years
Ramesh S Damani : i reshuffle, but i am always fully invested in equities.

sureshmakhija : sir now divestment theory is over. but according to fundamentals HPCL looks good considering the PE of its peer . Ttell us u r views on this
Ramesh S Damani : i agree i was very happy with thedividend in hpcl. it is a value stock.

chanchal : Ramesh bhai, why should power stock fall so much?/ gov't can not intervene in the profit and prospects of the company...
Ramesh S Damani : if they subsidise power or give it free who will build power plants.

AnandBhatt : Sir,I personally dont think PC will impose a dividend tax again.I remember a post budget interview when he was upset with Yashwant Sinha for bringing it back when PC had removed it in 97.He had said its stupid to keep tinkering with these things again and again by exempting tax one year and reimposing it the next year.But you never know in coalation politics.
Ramesh S Damani : i think you are right, the problem is the left.

vvinay : sir,does your Argument for TV-18 also holds for TV-TODAY AAj Tak t is widely viewed Hindi Channnel and max population in India communicates in Hindi
Ramesh S Damani : yes, but aaj tak does havecompetition.

BASANTMAHESHWARI : AMmngst all agri stocks would you not buy Monsanto?
Ramesh S Damani : i own it but it is too "high priced" for most people.

mahaa : Sir, Godrej Ind. - terrific 4th quarter result (Rs. 35 cr.) surpassing the results of three quarters put together (Rs. 29 cr.), a clear multi-bagger in the making? Time to accumulate more? Pl. advise.
Ramesh S Damani : sure, yield still looks good.

anilgupta : sir when bull market changes to bear market do you completely go out of the stocks for some time and then reinvest at lower level or you switch to some other promising stocks simultaneously
Ramesh S Damani : if you believe we are in a new bear market you have to lighten up. however i am not yet convinced despite technical indicators.

AnandBhatt : Ramesh Damani may have been wrong on Godrej and Balaji.But he recommended Concor and BEL - both went up 3 times in 1 yr.Also Macmillan was recommended at 140 .Its almost doubled.Logix and Goldiam are at or above his recomended price so i don't understand the 'recommendations being flop'
Ramesh S Damani : thx for the defense. stock picking is a very hard business and you unerperform some times for a long time. I dont know how you can dispute the valuation of a mcdowell. over time what makes youmoney is conviction.

NRN-PM : Sir Damani,,,, please respond. Is sensex going to go up? If so, when sir? If not, what is the downside of it sir? Please sir?
Ramesh S Damani : range bound till the budget.

a sshah : Sir in your frank openion what was the main reason for recent down turn & panic in the market ( if not the fii pull out which started in other emrg. markets in last 3-4 months)
Ramesh S Damani : i think that may be betteranswered by the exchanges or sebi.

amit : amit says, Mazda : I read an article on Mazda , its unique co. with 13% equity stake by US co. They have done project for Relaince and as considered potential winner in long run . Your views
Ramesh S Damani : it is a good small cap stock.

fundoo : Ramesh, Since it looks like the start of a bear market do you agree that the bottom is around 4000 at a resonable PE?
Ramesh S Damani : lets wait before we call the .

HiDamani : i still dont believe ramesh damani is wrong on balaji ? i am sure i am not mistaken sir.
Ramesh S Damani : thx, i remain hopeful.

MALIK : sir, whther u got the chance to visit Nelco and meet the management. I am eagerly waiting for your comments
Ramesh S Damani : sorry, notyet.

mann : Sir, Godrej Ind. - terrific 4th quarter result (Rs. 35 cr.) surpassing the results of three quarters put together (Rs. 29 cr.), a clear multi-bagger in the making? Time to accumulate more? Pl. advise.
Ramesh S Damani : yes, looking good.

fundoo : what are the technical indicators that indicate it is start of bear market? Pls enlighten.
Ramesh S Damani : market falls 20% from peak but does not recover.

ValueInvestor : Buffett makes all his investments only during a bear phase when he smells lot of value stocks .He says 'When people are greedy I am afraid and when people are afraid then i become greedy' .Do u feel Bear phase are best for value investors ?
Ramesh S Damani : ofcourse it is.

jvj : Mr. Damani, what is your opinion about bluestar industries. Good dividend, good management, what are the growth prospects for the company.
Ramesh S Damani : yes, well run., however they maybe in a sell mode.

AnandBhatt : Sir,FIIs are a big worry.All the big brokearages have changed their rating on India in the last 2 weeks.Most people feel that even if FII's pull out a little say about 2 billion of what they have put in in the last 365 days,we just cannot absorb 2 billion dollars worth of selling.This may happen with talk of rising interst rates in the US.Do you feel we could be out of a bull market so fast and entering a bear phase.You have seen many bull and bear markets.Are bull markets so short lived[ we are in it for only 1 yr now] I thought they last a few yrs.
Ramesh S Damani : my instincts tell me that this isstill a detour in a long bull market. it has been painful butlets hold on and sense is that we would go and challenge6200 over the next 12 months.

a sshah : Well sir, in confirming that now surely it is a bull market and then exiting after complete confirmation of bear market does eat a lot of one's profit.. May be one should look at past history of new coalition govt. formation and leave first two year as a dull/bear stock market phase....your views??
Ramesh S Damani : geranlly i have found big pciture investing is spotty. buy stocks and hold them you will tend to dobetter then market timing.this is true except when va;uations are at another extreme.

amit : Tech : Besides tat elexi ( which is basically hardware ) where else do u see value
Ramesh S Damani : that is not correct.,generally tech looks good.

chanchal : sir it seems you are utterly optimistic and why not it is predicted by one astrologer that this gov't will not last beyond end of the year and next gov't will be BJP so either lighten at current level or hold till new go't.. am i right??
Ramesh S Damani : my experience tells me that marketis bullish.

SHUBHANKER :  i think that we should be realistic. We should admit that bull market is over and bear mart is in full charge. i think that good goverment is must for bull mkt. pls comment.
Ramesh S Damani : i don't see life in black and white like you do. while technically you are correct, somehow i feel we are still in a bull market and my tech indicators are not working.

xerxes : 3rd REQUEST - is it true that 90% of small investors always lose in the stock markets?
Ramesh S Damani : i don't know, but i have known a lot of small investors who'd bought Lever, Colgate and Infy (50-100) shares and retired very rich.

eserveshareholder : Sir, at what shareholding level can COIC delist e-serve 75% or 90%?
Ramesh S Damani : my sense is over 75%, but no firm answer.

a sshah : Confirming to the all readers here Mr. Damani has strongly recommended Max India as a long term bet( between 120 rs to down till 65 rs) and now we are getting open offer at 200 rs. I think a very decent call by him. Congratulations, Sir.
Ramesh S Damani : Thanks.

eserveshareholder : Sir, do u think COIC will accept Rs 1000 which is 20 times forward p/e?
Ramesh S Damani : i hope it will be higher than 800. 1000 may be a tad ambitious.

SHUBHANKER : sir if mkt will crash at 4000 or lower levels does it change your conviction or not. Did you calculate how much your portfoilio has lost due to this topped out market?
Ramesh S Damani : no, because it is quotational. you should not review your portfolio daily, it is a crazy idea. ups and downs are a part of market behaviour.

anilgupta :  what should be the trigger for the market to challenge 6200 as global factor oil price, interest rate.
Ramesh S Damani : it would have to be strong corporate performance..

a sshah : Sir have mcdowell published q4 results? what kind of div. we can expect?
Ramesh S Damani : i think Rs 2. I own the stocks mentioned. Thanks for joining. See you next week, bye.