Let us start with a review of performance of stocks reviewed/recommended in this blog.
A total of 34 stocks have been reviewed in the blog. Hypothetically anyone who invested 10,000/- in each recommended stock (at the recommended price) would have invested 3,40,000/- and on Oct 20,2017 the market value of the stocks would be 14,11,393/- giving you an absolute value of 315% increase in your investment... including dividend it would be 330%.
If invested in only recommended best buy stocks (GAEL,NHPC, Tata Communications, Tata Power) would have resulted in an absolute value of 359% increase
If invested in only dividend paying stocks the absolute value return is: 406.85%..
Nifty and Sensex over the same period have given absolute return of 134% and 127% (approximately 15% per annum) our returns have been around 315% (approximately 37.5% per annum)
of course these are not strictly comparable.. as NIFTY does adjust the stocks that make up the index... while ours is a constant list.. with only additions and no subtractions...
The markets are doing well and will continue to do well.. the underlying reason is the rush of liquidity..
At an international level a large part of the bank funds (Quantitative Easing money ) was parked with the FED earning some 0.25% and importantly outside the financial market hands....With increase in FED rates.. This QE fund has moved out of the FED books into the financial market increasing liquidity..
In India the sudden interest of indian public to invest in financial assets instead of gold and real estate has increased the amount of domestic capital available.. pushing FII money to the "back bencher" state
also with govt interest in identifying the true owners of assets by linking them with Aadhar numbers (biometric identity) it is removing duplicate PAN number holders..
HNI investors who were hiding their wealth using multiple/fictitious PAN account numbers are now feeling the heat and so we are seeing that everyone is coming clean with their assets..
Banks under strict Basel-III guidelines are giving loans to financially sound companies.. forcing management to report strong cash flows and healthy bottomlines..
with India entering into the golden age with highest population of working age indians..(also known as Demographic Dividend) we can expect demand for goods to be steadily increasing for the next 10 years..
All things are pointing to a steady increase in market value of stocks.. we will see corrections but should be small corrections..
There are possible bottlenecks.. One thing that could be a black swan event is "peak oil" i.e. oil price rising to economically unsustainable levels..(which could manifest in global escalation in conflict) BASEL-III though is sapping out liquidity by reducing the turnover rates of money.. it could result in demand contraction world wide and have -ve side effect on indian growth story..
Conclusion: India should see steady increase in demand due to good demographic data.. growth in India is given.. so its positive for companies. most stocks are priced to perfection but there are stocks discussed which are still fairly priced. remain invested is the suggestion.. as corrections will be short lived.. (Not counting Peak oil Black swan event..)
=happy investing
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