First of all my apologies for keeping Stable Investor so un-updated for last one month. I know there should not be any excuses for something you are really passionate about, but this time around I was busy with preparations for the biggest investment of my life. No, I am neither buying a house nor a company. I am getting married this month. 🙂 So with so much preparations going into a typical Indian wedding, it’s the site that is paying the price with inactivity. But the silence has been broken and I intend to keep it that way.
(I even received an email asking me whether I had died because of some wrong stock pick) 😉
And it seems that just after the stocks in Dead Monk’s Portfolio were disclosed, markets as a whole decided to look at future through rosy glasses. Markets over the last one month have just been doing one thing, i.e. going up. And in that process, they have actually managed to hit new life time highs. And to be frank, markets are not looking cheap at all. With indices commanding multiples in excess of 18.3, this may not be a very good time to think about entering the markets. (Disclosure: I don’t believe in timing the markets much. Read why here). But as it always happens, when markets start moving upwards, retail interest in markets starts rising. And this once again happening now. People all around us have started asking for a hot tip or two to make a quick buck here or there. And this is how the process of losing money in the long term begins. But let’s keep that discussion for another day.
|Markets Making New Highs. Reasons? Unknown.|
I have been a little off-track for last one month and am yet to understand as to what exactly changed in the Indian economy that is forcing stock markets to run away like this. Is it because of new RBI Governor? Or is it the US’s delay in stopping the fund flow? Or is the economy really moving towards a better-than-yesterday scenario? Or is it that market expects some decent outcome from the coming general elections? Sadly, I don’t have answers to any of these. I am not a pro on answering any of these. But I would do what I am capable of doing. I would continue focusing on my long term plan of wealth creation. I would try my best to do things which I believe I am not-bad (if not good) at. I would continue to keep a hawkish eye on developments linked to stable, solid companies that form the core and satellite of my portfolio.
And since I am busy with my personal life, I would continue funding my SIPs as they having been going on for last few years. I would also continue accumulating funds in RDs which would help me make bulk purchases of stocks when markets crash in near (or far) future.
So, for the time being, that’s the update from Stable Investor’s side. Regular posts with more financial content would commence soon. Till then, have a safe, happy and a noiseless Diwali.
And do share details of what you plan doing when markets are making new highs.
CAN WE EXPECT A PE MULTIPLE OF INDEX BELOW 15 WITHIN ONE YEAR..?
Wish you a very happy married life 🙂
Thanks a ton Swami 🙂
That is a tough one Harichand. I don't think I am got at predicting the outcomes in general. But its better that we stay prepared in case your wish does come true. 🙂 It might be a good idea to hold cash for a while now.
Thanks a lot 🙂
Congratulations and Wish you a very Happy married life!
And thanks a lot for coming back from break.
Balmer Lawrie is still at cheap valuations, so thinking of accumulating more shares. Any change/update in fundamentals?
For Balmer Lawrie, the price does seem tempting for long term investors and those looking for yields. But recent announcement by govt asking its own departments to avoid booking tickets through govt agents like Balmer Lawrie etc has raised some concerns. This agent fee is one of the important if not the largest revenue drivers. But it remains to be seen as to how this would eventually effect company's profitability. Company has also decided to shutdown it loss making tea business and is also looking to buy a ticketing company. This may effectively negate the ill effects of govt's advise. But it remains to be seen and its better to wait for while before taking a position in this stock.
Thanks a lot Srikanth 🙂
Congratulations and wish you and your spouse a very happy and prosperous married life!
Thanks for your wishes Eswar 🙂