Last week I bought some auto, and telecom stock. In case of Infra I am seriously looking but cannot decide what to buy. Have met a few promoters and know a couple of big companies too well – so touching becomes MORE difficult.

The toughest part of investing seems to be to change gears. Last 3-4 years I have invested in bonds – and touch wood they have given me good returns. Have also done some trades, and got reasonable returns.

The market is at a p/e ratio of 15 (I hate macro concepts like market p/e, but have to live with that, sorry). This actually means that the market is at a p/e of say 11-12 for 2013-4 earnings, and that to me is the NADIR.

Having said that go back to 2002 – the bond markets were giving super returns in mid double digits – 12 to 19% was easy, equities were bleeding, and super bleeding. Any body suggesting equities over bonds was seen as insane. However in 2004 and 2005, the guy suggesting equities in 2003 was God.

Similarly with US Gilt bonds at 1.5% yield (horrid negative real returns), the equity markets there are giving about 6% returns. In Indian conditions, interest rates may not come down so quickly, HOWEVER, the interest rates will NOT GO UP from here (oops such Subra arrogance never before).

Surely a happy buyer of the consumption story – telecom, banking (you know how choosy I am, right?), power equipment, power (i like only one power major), …to me look like good buys.

I AM A BUYER…and have been buying.

Decide what you need to do depending on YOUR risk appetite. If  a company is available at a p/e of 10, it HAS to be the nadir in a country where interest rates (for the crowded out private sector) is about 18% p.a.

To me, I may be wrong, but I am convinced that being in the market 6 months BEFORE The market goes up is a LESSER CRIME than coming after the party is 6 months old – you would have missed the steepest part 🙂