Investment Strategy - The other way - Expert View

I wish to share my views on portfolio building with the readers. It is expected that a minimum of 6 months are still ahead of us to build a strong and worthy Portfolio. The election menace may bring some more downfalls in the market but there is some favorable aspects also developing around which may help a gradual recovery by the end of 2009.

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The research before investing in a scrip includes a number of factors like companies’ assets, liabilities, earnings, managers, competitors, the nature of business, the amount of debt etc. You can find many of this information in the balance sheets. If you have done your homework and closely studied all the aspects of a company, you should be rewarded with a high returns.

I would like to share a raw investment strategy which I am planning to apply with this extreme volatile and uncertain bear market. It is not much the conventional or intellectual way of investing. But I believe in this system and it is proved as the best strategy in any long running bear markets.

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I also would like to mention a list of selected some seventy stocks by which I am planning to play this fixture. Most of them are Mid and Small caps, as I am simply wish to grow up small and healthy plants.

I have categorized them on consecutive sectors in which their significance I noticed. I have also mentioned the best buy range with an assumption of the on going highly volatile market sessions. The following factors are considered while selecting these stocks and I hope, if anything found wrong with any of the scrip, please don’t hesitate to exclude them.

Full or partial of the following factors are considered while selecting each of the stocks listed below.

(a) The fundamentals
(b) A bit of Technicals
(c) The product trend and applicability issues
(d) The future scope of products/Services
(e) The Management
(f) Assets/Infrastructure of the Company
(g) Certifications and Awards
(h) Market Response
(j) Previous Products/Projects
(k) Investor relations
(l) Dividend History

I will not assert, all the above measures are ok with every scrips I selected, but I tried to maintain fairness with the mainstream. Some of the scrips included in the list only cause of their expected future potentials.

I am planning to accumulate these stocks with a long term vision of 3 -15 years. Gradually wish to filter them down and would like to keep the best 2 to 3 in every sector. I am basically not concur with the logic, that one should not maintain a portfolio of more than 15-20 stocks. I prefer the most proved and worthy practice (in other areas) of filtering down to reach your specified numbers of stocks that as much you can monitor.

Managing Your Portfolio

For example, its some way similar to selection of a Football team. You are the coach of this team. Suppose, you have a 25 member team of best players from which you will select the first 11. Remember that they are the best in their respective play positions and you have an unambiguous trust on their abilities. You have selected this 25 people after stiff and exhaustive selection process. You should have more than one choice to play in every position, like good Stopper Backs, good Goal Keepers and good forwards.

You will not hesitate to skip any player at any time if he creates a burden for you. You will also not allow to play an injured player in the first eleven. You will replace the position with other best player who is sitting in the pavilion. Don’t keep any emotional attachment to any of the players and the performance should be the only criteria to keep them with you. Closely watch their performance and rotate them which best suits your team.

Buy in dips & Averaging

You can buy as little batches of 100, 500 or 1000 at every falls depending on your cash reserve. It is also possible to accumulate below the 9000 level of Sensex. Sort your portfolio frequently in ascending order on “Overall Gain” or “Net Profit figure”. Keep averaging from the bottommost scrip which shows the lowest overall gain percentage. Do these practices until some steadiness come to the market.

Please go thru the list below where I mentioned the SECTOR, SCRIP NAME & PROPOSED BUY RANGE of my selected seventy scrips.

AGRICULTURE - AGRO TECH - 70-90

AGRICULTURE-USHER AGRO-20-25

ANIMATION -COMPACT DISC INDIA -25-35

AUTO -FORCE MOTORS -50 - 60

AUTO-(BIO/ELECTRIC/HYBRID) -MAH & MAH-250 - 300

AUTO/ELECTRIC VEH -TVS MOTORS- 20 - 25

BANKING -AXIS BANK -250 - 350

BANKING -BANK OF RAJASTAN -30 - 40

BANKING- SOUTH INDIAN BANK -50 - 60

BANKING -SYNDICATE BANK -45 - 55

BANKING- YES BANK -45 - 60

BATTERIES- AMAR RAJA BATTERY -30 - 40

BIO-FUEL -SOUTHERN BIO-TECH -07 - 10

BIO-FUEL MECHIENARY -PRAJ INDUSTRIES -50 - 60

CABLES -CORDS CABLE INDUSTRIES- 30 - 35

COKE/COAL -GUJARAT NRE COKE- 18 - 25

CRAMS/BIO-MEDICINE -SHARON BIO-MEDICINE -25 - 35

DISTILLERIES -BALAJI DISTILLERIES- 15 - 25

ELECTRIC VEHICLES- ELECTROTHERM -60 - 90

ELECTRIC VEHICLES/CAR DR FRAMES -TUBE INVESTMENTS -20 - 30

ELECTRONIC SECURITY -ZICOM ELECTRONIC SEC -50 - 70

ENERGY DEVELOPMENT- ENERGY DEV CORPORATION -35 - 45

ENGINEERING -KOLTE PATIL -15 - 20

EXPORTS/JEWELLERY- RAJESH EXPORTS -20 - 25

FERTILIZERS- CHAMBAL FERTILIZERS -30 - 40

FERTILIZERS- FERTILIZERS & CHEMICALS -18 - 25

FERTILIZERS -GUJ STATE FERT CORP -70 - 85

FLORICULTURE -KARUTURI GLOBAL -05 - 08

GPS/WIRELESS -MICRO TECHNOLOGIES -60 - 75

HI-TECH MACHINES- LOKESH MACHIENS -20 - 25

HOME APLLIANCES -VALUE INDUSTRIES -08 - 12

INDUSTRIAL FINANCE -IDFC -45 - 60

INFRA- SUPREME INFRA -20 - 25

INTERNET/VAS -GEODESIC- 50 - 60

LASER CUTTING- RISHI LASER -20 - 25

LCD PANELS- MIC ELECTRONICS -15 - 25

LOGISTICS -AEGIS LOGISTICS- 50 - 60

LOGISTICS -ARSHIYA INTL -40 - 60

LOGISTICS -GLOBAL VECTRA -15 - 25

LOGISTICS -SICAL LOGISTICS -20 - 25

MEDICAL DIAGONOSTICS/CRAMS- OPTO CIRCUITS -70 - 90

MINING -ASHAPURA MINECHEM -15 - 25

MINING (IORN ORE) -SESA GOA -60 - 90

MOBILE VAS -RSYSTEMS -40 - 50

MOBILE VAS -TANLA SOLUTIONS -20 - 35

OIL EXPLORATION -HIND OIL EXPLORATION -55 - 70

PHOTOGRAPHIC PRODUCTS- JINDAL PHOTO -70 - 80

PLASTIC -TIME TECHNOPLAST -20 - 30

POWER -POWERGRID CORPORATION- 75 - 90

POWER INFRASTRUCTURE- GVK PIL- 15 - 20

POWER SOLUTIONS -KLG SYSTEL -60 - 75

POWER SOLUTIONS -PTC INDIA -50 - 70

SEISMIC TESTS- ALPHAGEO -70 - 90

SEMICONDUCTOR -SPEL SEMICONDUCTOR -08 - 11

SHIPPING -ABG SHIPYARD -70 - 80

SHIPPING- BHARTI SHIPYARD -50 - 60

SHIPPING- ESSAR SHIPPING -25 - 35

SHIPYARD -WESTERN INDIA SHIPYARD -04 - 06

SMART CARDS -BARTRONICS -50 - 70

SOLAR ENERGY- WEBEL SL ENERGY -50 - 60

SOLAR/BANKING PROD- ENSO SECU TRACK -15 - 20

SPV/IT STORGAE MEDIA -MOSERBAER- 40 - 60

STEEL- SAIL -90 - 100

TEA & OIL EXPLORATION -ASSAM COMPANY -05 - 08

TELECOM/SPV -KAVERI TELECOM -20 - 35

TELECOM/SPV -XL TELECOME & ENERGY- 25 - 40

VACCINES -BIOCON -80 - 120

WASTE MGT- INFOTREK SYSCOM- 10 - 13

WATER MGT -HIND DORR-OLIVER -25 - 35

WATER MGT -ION EXCHANGE -50 - 70

WATER/WASTE MGT/INFRA -SUBHASH PROJECTS -30 - 50

WIND ENERGY- INDO WIND ENERGY -15 - 25

WIND ENERGY -SUZLON ENERGY- 40 - 50

We cannot predict the exact sector which is going to be emerge in coming days. And its harder to find the best too. Even if we found one …what’s the matter? Satyam was one of them.

I wish to propose that,

Select 3 to 4 companies best in each sectors and do filter down on the basis of frequent performance review. The time has to show us the best. And for the non-performers, leave them simply on the way.

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