Caveat: I have a stake in all the shares mentioned here – either put or call. So read carefully.

Let us get somethings right. A bull market is something that everybody loves – but does not notice especially if it is over a long run. So the market which was 21000 in 2008, and fell to 9000 in 2008 was now at 42000. Eitherway it is a bull run – we can only question the rate of growth. I am not a CIO/CEO – so I will say “I have done it, so you should do it, if you have the same risk profile and ability to sit calm.

Now let me tell you what are the positives –

We are a big economy, and we are an internal economy. Our exports are not really a big thing -so it does not really impact us much. What we need from the outside world is cheap crude and low interest rates – now we have both. So world economy not growing much is not too much of a problem. The world needs a place to invest, so we could be a good opportune place.

Chinese costs are growing, Trump is flexing his muscle – this will mean many Global companies will seek to have a secondary  manufacturing base. Could be India (I accept it could be the poorer parts of Europe, or Vietnam, but the availabilty of a big market will push it in favor of India).

• Growth in India has hit a nadir, and there is very little room downward
• Auto production will be ahead of sales – they need to stock the pipeline
• Global manufacturers have a tax rate of 15% and wage rate 60% of China
• Crude prices have dramatically fallen – and even 40$ looks difficult to sustain
• Global yields are lower than 1% making India still attractive with 4% yield!!
• Yes Bank problem solved – even if you don’t like the solution
• Fantastic and dramatic reduction in NPA – again hits the bottom
• Vodafone / Bharti have settled the payment issue – so even Voda can’t go down!
• Valuations are cheap
• Some valuations are deep.

Now let us see what this means and what strategy you can use?

1. Buy shares which have fallen – say a Chola, Hdfc Ltd, Sundaram finance – simply believing that these have been battered, their NIM is in place and so it is not a bad share to hold in the long run. Of course same will hold true for Hdfc amc, Nippon amc, Hdfc life, Kotak – same logic. Have been beaten down, it is an annuity business, so buy and hold. Buy at the bottom, and if you get a chance to sell, do a trade. Well I trade in these shares regularly – could be a small quantity, but also have some of these in my portfolio.
2. Buy shares which have been beaten down so much, that there is a lot of juice left – lke Sun Pharma, Biocon, Lupin – some of these would have been beaten down say 70% from the top. Even though this is not the reason to buy it, if you are happy with the fundamentals, go and buy it. Remember pharma is a difficult business to understand, so you could even buy a pharma fund – I prefer the direct route.
3. Deep value shares – those which nobody wants to buy, because the world thinks that the market is going to be finished soon. Tata Power, Ntpc, Indian Oil, Sbi, Vedanta, JSW steel to name a few. These are all available at a pe of say 7 (or 9), a decent dividend yield – near or above the 10 year Gsec yield. Are these good buys? I could have argued for Vedanta at 130 (like I bought) , said great buy at 70 (like I bought) and a good sell at 89 (like I sold). So I have been an investor -AND A DELIVERY BASED trader. I could buy these shares – say 5000 IOC, trade in 3000 shares and hold on to 2000 for eternity hoping to get decent dividends over the next decade. No clue what will work – I have a broker who does all 3 with my portfolio – I am just an accomplice in my trade transaction! Please check what works for you – I have a few more scrips – just giving these examples. Please understand I am holding Tata Power since the 1970s – and traded dramatically. Currently I am neither bullish or bearish – just opportunish!! The problem with this strategy is I have no clue about your threshold for taking pain. I don’t mind buying Tata Power at 40 and seeing it go down to 20 (Mundhra taking its toll fully), or IOC going down to 77 (all time low) and bouncing back in 2025 instead of 2022. Do you have that level of pain taking ability? I have Vedanta bought at 122, as well as bought at 70…

What more I like about PSU shares – including LnT, Axis bank and ITC is that the govenment (assuming they are wise is of course wrong) will soon realize that strategic sale (like Maruti, Centaur Hotel, Santa cruz, Hindustan Copper) get better than ETF sale – like they have crashed the price of ITC and even Axis has a deadly over-hang.

Personally, I play the game allways! I go short on a share (which I can deliver if I want) – and buy it back in the afternoon. The Sell-buy trade has worked for me in many counters – and I am trying it today also. Remember I have been a broker, work on almost zero brokerage, have a full time trader who calls me for action – if you don’t have these, don’t try stunts. What works for Buffett will not work for Prashant Jain. What works for PJ will not work of Naren. What works for Naren will not work for ANY OF US!! Copying is dangerous.

What is my advice for you – my friends, clients, readers, students,…………is simple. Choose your funds, do your SIP, get a decent adviser who can control you. Simple.