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Update On Stock Markets

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Update on Indian Stock Markets

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Update On Stock Markets

  1. 1. How to become Bull among Bears ? A presentation by Rajesh Soni Investment Guru Blog – http://rajeshsoni.com
  2. 2. Current Scenario <ul><li>The Bear has taken the Bull by its horns </li></ul>
  3. 3. <ul><li>Humpty Dumpty had a great fall </li></ul>Sensex & Nifty down 28% since 8 th January
  4. 4. The 10 largest falls of the Sensex <ul><li>1. Jan 21, 2008 ---    - 1,408.35 points </li></ul><ul><li>2. Mar 17, 2008 ---    - 951.03 points </li></ul><ul><li>3. Mar 3, 2008 ----    - 900.84 </li></ul><ul><li>4. Jan 22, 2008 ---    - 875.41 points </li></ul><ul><li>5. Feb 11, 2008 ---    - 833.98 points </li></ul><ul><li>6. May 18, 2006 ---    - 826.38 points </li></ul><ul><li>7. Mar 13, 2008 ---    - 770.63 points </li></ul><ul><li>8. Dec 17, 2007 ---    - 769.48 points </li></ul><ul><li>9. Oct 17, 2007 ---    - 717.43 points </li></ul><ul><li>10. Jan 18, 2007 ---    - 687.82 points </li></ul>
  5. 5. Reasons for Fall <ul><li>Started with FII Sell off – Profit Booking </li></ul><ul><li>Negative Global clues </li></ul><ul><li>Domestic cues Ignored </li></ul>
  6. 6. Big Daddy is ILL <ul><li>Sub prime Crisis </li></ul><ul><li>Unemployment on rise </li></ul><ul><li>Housing Sector –Slowdown </li></ul><ul><li>US Economy in Recession phase </li></ul><ul><li>Fed Rate cut fails to reimpose confidence </li></ul>
  7. 7. Sub-prime Crisis <ul><li>Liquidity issue in Banking System (foreclosures) </li></ul><ul><li>Higher default rates on loans to high risk borrowers </li></ul><ul><li>Started with Housing sector – Bubble Bursts </li></ul><ul><li>Housing prices have fallen drastically </li></ul><ul><li>1.3 million properties subject to foreclosure </li></ul><ul><li>Subprimes losses estimated at $ 300 Billion !!! </li></ul>
  8. 8. Is US going through recession ? <ul><li>Higher Inflation </li></ul><ul><li>Slowdown in Industrial Production </li></ul><ul><li>Negative Job Growth </li></ul><ul><li>Housing Industry –Bubble bursts </li></ul><ul><li>GDP Growth 0.8% in FY08 (estimates) </li></ul>
  9. 9. Trends in US Housing prices
  10. 10. Damage Control FED’s Falling Interest Rates – Since 12 Months
  11. 11. The Indian Story <ul><li>Fear of Sub prime crisis in India </li></ul><ul><li>Housing Bubble ? </li></ul><ul><li>Taming Inflation </li></ul><ul><li>Domestic Consumption Story </li></ul><ul><li>GDP growth –Scenarios </li></ul><ul><li>IIP- 8.7% growth </li></ul>
  12. 12. Markets are Imperfect <ul><li>Fear Factor – Current levels look expensive </li></ul><ul><li>Near term sharp uptrend ruled out </li></ul><ul><li>Global cues would continue to haunt </li></ul><ul><li>Domestic cues ignored </li></ul><ul><li>Wait for Better prices </li></ul>
  13. 13. Getting the Bull out of Bear <ul><li>Ignore companies with higher US exposure </li></ul><ul><li>Identify fundamentally strong companies with focus on domestic consumption </li></ul><ul><li>Don’t get carried away by prices…look for value </li></ul><ul><li>Avoid Banking sector at current levels </li></ul><ul><li>Pharma & FMCG are good bets in current scenario </li></ul><ul><li>Avoid futuristic companies </li></ul><ul><li>Do staggered Buying </li></ul><ul><li>Avoid speculative positions </li></ul>
  14. 14. Words of Wisdom <ul><li>&quot;You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.&quot; Warren Buffett </li></ul>
  15. 15. Words of Wisdom <ul><li>“ The individual investor should act consistently as an investor and not as a speculator. This means.....that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.” Ben Graham </li></ul>
  16. 16. Thank You !

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