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October 31, 2008 09:24 IST
The Sensex opened with a positive gap of 290 points at 9,298 on Wednesday. In extremely volatile trade, the Sensex was in the red by 1100, and with half an hour was up over 100 points. In the final trading session, the Sensex continued to swing between zone to close above 9,000. In such jittery times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on rediff.com on Wednesday, market expert Pranav Sanghavi replied to many such readers' queries. Here is the transcript:
PRANAV SANGHAVI says, Good afternoon everyone and welcome to the chat. Let's begin.
riyas asked, Hi Pranav, How do we know whether a particular stock is already bottom out, i meant the prices are already lowered. Is there any calculation to check these datails. Because i have 25 grasim shares, as its PE ratio is less than 5, the stock is getting battered in the market? Please advice. Thanks
PRANAV SANGHAVI answers, at 2008-10-29 15:40:22One can never predict on the exact price that a stock bottoms out at. Right now the bloodbath has been so vicious that no logic applies to the stockprices and no PE ratio or valuations make sense. This is a time of anamoly. Every time the market crashes by over 500 points from these levels you could look at acquiring very small quantities witha view to ol for 1 to 2 years. There are tons of qality stocks like Grasim [Get Quote] whic are trading well below a 5 PE and look extremely attractive.
kamya asked, Hi Pranav, I am holding all front line stocks like RIL [Get Quote], SBI [Get Quote], L&T, Infosys [Get Quote], TCS [Get Quote], ICICI [Get Quote], Grasim, Ultratech, DLF, unitec, ABB, Aban, Canara Bank [Get Quote], BHEL, REL Infra, RCOM, GMR, GE shipping, GUjNRE, GujMD, HDIL, ONGC [Get Quote], Pantaloon [Get Quote] Retail, Sesa goa [Get Quote], Tata chemical, Tech mahindra [Get Quote], TISCO [Get Quote], TELCO, IDFC [Get Quote], Jindal saw [Get Quote], Punjlloyd. What is the future of these companies?. Despite the market trend, shall i hold these shares for 2 years outlook. My losses are more exposed to ICICI, Grasim, REL energy, TELCO, TISCO, SBI, L&T, RCOM, Aban shares. what is your recommendation? Thanks for your help.
PRANAV SANGHAVI answers, Most of the companies you have mentioned should perform well in terms of their financial performance. If you do indeed hold these stocks for two or more years you should get a decent return from the current levels.
siron asked, Shall i buy Bharat airtel and RPL at cmp? or shall i wait for further correction? thanks
PRANAV SANGHAVI answers, I would still wait as the negativity is not over. We are still in the bearish phase and we may get bear market rallies which will be shorlived and you could see new lows again. I would wiat for a correction. barath asked, Hi, Is the sensex being bottomed at 7000? What is your advice when the sensex reaches at 7000 points. Do we need to be greedy to buy more stocks or sit on the sidelines to watch out the market? Thanks
PRANAV SANGHAVI answers, My advice would remain same. Buy 5% of what you intend buying and holding quality frontline stocks which you like and think will continue a 15 to 20% growth over the next few years. istorically those who have braved and bought when everyone else has been selling have always benefitted in th long term.
yogesh asked, please correct me if i am wrong. In the current market turmoil, the technical analysis information will not help us to predict the share prices as the market and other sentiment plays a major role these days. We can't rely on the technical analysis information to make any decision whether to buy or sell as long as the market sentiment is improved.
PRANAV SANGHAVI answers, I agree a lot of historical benchmarks, technical charts, and even fundamental valuations don't make sense. One should stay away from the markets if one intends to invest with a shor term outlook.
maran asked, I would like to invest in ETF funds and hold it for 10 years. How safe are these funds for investment? Can we expect more downside in the gold prices. Is ETF funds are MF or normal shares. On the ICICI direct demat, i dont see these ETF under the MF but it is available in the normal shares trading in NSE. What is the capital gain taxed for ETF? Please advice.
PRANAV SANGHAVI answers, I am presuming you want to invest in Gold ETF's ? If yes acquiring Gol through ETF's is a cleaner way without the hassles of Wealth gain tax etc. Exchange traded MF's are basically MF's which are tradded on the exchange. The Long trm and short term capital gains is treated simillar to an equity investment.
cheran asked, what is your take on Guj NRE and Guj Mineral development shares. I have both 50 shares and it is trading very low at these days. What is the future of these companies. shall i hold or sell?
PRANAV SANGHAVI answers, The companies will take some time to see higher levels. With the markets conditions as they are you will have to hold for 1 to 2 years to see decent returns.
punkaj asked, i have 50 GMR infra at 183. Shall i hold or buy more to average.?
PRANAV SANGHAVI answers, I would wait as the infra and realty sector look to correct even more. So I would look at the stock at lower levels.
imran asked, Can you recommend some best pharma, shipping stocks? Thanks alot.
PRANAV SANGHAVI answers, You could look at stocks like Glaxo, Dr. Reddy, Panacea, GE Shipping etc. But I would wait for lower levels to enter stocks.
elam asked, When the sensex will reach 21000 again. We witnessed a major fall in the sensex, when the sensex recover, can we see a big rally.
PRANAV SANGHAVI answers, You could very well see the 21,000 mark but it could be 2 to 3 years away. I don't think you could see that level in the next 6 to 12 months.
falam asked, Hi pranav, i am reading your answers every week. What are your best 10 picks at these scenarios, how long you would hole those 10 stocks.?
PRANAV SANGHAVI answers, I would look at stocks like RIL, SBI, L&T, Sesa, IDFC,HDFC Bank [Get Quote], Indian Hotels, NTPC, Voltas [Get Quote], Hindalco [Get Quote] etc. All these I would look on days of major corrections in small parts and with a view to hold for 2 to 3 years.
venusmail asked, what is your view on GMR infra, GVK power,GUJ NRE and Unitech
PRANAV SANGHAVI answers, I think barring Guj NRE all the other stocks will see some slowdown due to the perceived slowdown in the realty and infra sectors.
shefali asked, should i even think of investing in shares where else in ur opionion should i invest my money
PRANAV SANGHAVI answers, If you can invest with a 2 to 3 year outlook you could invest about 25% of your investible funds in the stock market. Balance could be split between, prperty, FD, Gold and Bonds.
Raghav asked, Can you plz comment on Blue Chip Stocks
PRANAV SANGHAVI answers, Blue Chip stocks are the ones that will perform better than the mid cap stocks in the bear market rally when it comes. Right now it would be a good idea to invest in smallparts ito the Blue CHip stocks which look to give a 15 to 20% growth over the next few years.
Manoj asked, can ispat industries rise up to 30 in two months?????
PRANAV SANGHAVI answers, That looks very difficult to me.
UKPANDEY asked, I HAVE ADLABS [Get Quote] AT 250/= AND SICAL LOGISTICS [Get Quote] AT 150/- WHAT TO DO, MAY I AGERAGE IT??
PRANAV SANGHAVI answers, Adlabs you could look at buying small parts to average on every major dip. Sical I don't follow so will not be able to comment.
indresh asked, sir when markets will stebilise ? wat is right time to enter ?
PRANAV SANGHAVI answers, I think we have another 6 to 9 months of rangebound weakness in the markets interspersed with short bear market rallies. THere is never a right time and the wrong time. You could buy in small parts on very major dip to average the stock.
Ram asked, I heard Satyam [Get Quote] TCS comps have grabbed huge projects in Middle east as usual.
PRANAV SANGHAVI answers, They have signed on new clients and bagged decent orders. The dollar is also trading very close to it's all time highs but yet because of the fear of recession in its customers markets like US and Europe is not allowing the stocks to rise higher.
rkkkota asked, Hello Sir. I have purchased SBI at 1533/-. Shall I hold it or sell it.
PRANAV SANGHAVI answers, I think you could hold on. If you can average then buy on days when markets are down over 500 to 800 points. It has given fantastic results with the company posting a growth in income by over 40% despite the higher interest rates etc. I would surely hold on and buy further to average and hold on for 1 to 2 years.
lalitbondre asked, i have 30 shares of TELCO @520. What is its future.
PRANAV SANGHAVI answers, I think in the short term the stock will be an underprformer. It has huge debt on its books for the acquisitions made. The negative outlook on the stock was evident with the response of its recent Rights Issue.
kaleem asked, I am planning to invest is this right time(New unvester)
PRANAV SANGHAVI answers, You should be ready to hold you investments for 1 to 2 year period. Also buy in small parts on every dip.
cpius asked, please tell me this the right time to time enter into rpl for long term
PRANAV SANGHAVI answers, I would wait for further corrections.
akmeher asked, Sir I have purchased sesa goa 250 share @130/-, RPL 125 share @ 195/-. What is their future in a year & what will be the best course of action for both the share.
PRANAV SANGHAVI answers, I quite like Sesa as a company. Despite the economic conditions and the state of the metal industry I would still look to buy more at lower levels to average the stock and hold fora period of 1 to 2 years.
lalitbondre asked, i have 150 shares of nevyli lignite at avg price of 80 what is its future.
PRANAV SANGHAVI answers, I think the stock will take a long time to see its previous highs. You would have to hold on for a very long time.
JAN asked, SHUD I BUY RCOM,RELCAP,RELINFRA,NTPC,LNT,BHEL,UNITECH,DLF,ITC,JAIIRR,BHARAT FORGE [Get Quote],GE SHIPPING N RELPET AT CURRENT LEVELS
PRANAV SANGHAVI answers, From the stocks that you have mentioned, I would look at stocks like Rcom, NTPC, L&T, BHEL, Unitech, ITC, Bharat Forge.
mohan asked, I am long on one lot of IDEA Nov Futures @44.25. Closing price today is 39.40. Shall I be able to book profit before 5th Nov?
PRANAV SANGHAVI answers, Its a short window that you have mentioned. You could get a chance to make an exit without losses ifwe see a short bear market rally.
Balaji asked, I have 1000 shares of RNRL @ 170 Rs and 300 shares of RPL @ 195 Rs. How long would i need to wait for breakeven AND is it really worth to hold these stocks?
PRANAV SANGHAVI answers, I would not lok at RNRL till the ongoing legal battle ends between RIL and RNRL. In terms of RPL I would wait for further lows in the company to get in and hold.
Anand asked, Hi, Do you think sensex will go beyond 21K again?
PRANAV SANGHAVI answers, You could see those level back on the markets but I don't think that will be before another 2 to 3 years.
ashok asked, Can you comment on Sesa GOA share
PRANAV SANGHAVI answers, Fundamentally it is a strong stock where it has a comparitively low capital and high earnings and huge reserves. It is in the business of mining and exporing coal. It is adding or in the process of adding other lines of businesses like Power generation etc. I would surely hold on to the stock. The stock has given a phenomenal return to investors over the last 1, 3 an 5 year periods.
neeti asked, I have 100 RIL at 2300. What should i do sell or hold . Approximately till when should i expect my money back?
PRANAV SANGHAVI answers, RIL looks to make new lows if the markets correct further. It is an index heavy stock nd and downturn on the index, RIL would reflect it. So in the short term it will berangebound with a negative bias. Also, it would take a very long time to see the levels that you mention. You could buy further to average out at lower levels.
vip asked, should i buy aban @ 630 acc @ 350 abb @ 450 bhel @ 950 ntpc Sail [Get Quote] UBI, PNB
PRANAV SANGHAVI answers, You could all the stocks that you have mentioned but in small parts on every dip on the exchange.
Biswadip asked, I have ICICI at 520 and SBI at 1120 what should i do?
PRANAV SANGHAVI answers, You could buy more to average out the prices. You will have to hold on with a long term outlook for handsome returns.
ppoongs asked, i have 350 shares of rpl at rs.152. can i average it around 70 or exit the stock( i am ready to hold it for 1-2 years)
PRANAV SANGHAVI answers, You could surely look at averaging the stock with a 2 year outlook.
VIKRAM asked, Hi Pranav How R U?Well I have Mercator Lines [Get Quote] at 32?I can hold for 2-3 years?What can I expect?Even the results were good?Please reply?Please.
PRANAV SANGHAVI answers, Shipping Industry is a cyclical sector and transport and shipping often reflect the health of the economy. If the global economies do slowdown so will the shipping and transport industries albiet marginally. I would hold on to the stock.
PRAVIN asked, IS THERE IS A CHANCE OF FURTHER DOWN FALL IN THE MARKET
PRANAV SANGHAVI answers, Right now we are simply following the global markets and there could be a further downfall if there is furhter downslides in the global markets. No valuations or charts would make any sense i the current market scenario as it is being ruled by panic and redemptions.
rabindra asked, hi I want to know that investor education is necessary or not for Trading in the market.
PRANAV SANGHAVI answers, It is not necessary but absolutely essential.
PRANAV SANGHAVI says, Well its time for me to leave. Bye for now. And wishing all of you a very Happy Diwali and hope all of you have a prosperous New Year!!
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