Stock market crash should be looked at as an opportunity not as a disaster. How many times in our life, do we get to buy something which is even below our imagination prices? Don't we take advantage when we see a SALE board displayed at Big Bazar or any near by mall, yes most of us do take advantage, then why we are afraid of buying when whole stock market is put on SALE with 80-90% off for most of the items:-)
Today I got a call from one of my friend from Pune (he is a techie who bought Hindalco in 2004-05 at around Rs 150-160 based on his uncle's reco who is a manager in Hindalco; as of now Hindalco is Rs80, loss of 50% in 3 years).
As usual you will find those people who are not related to stock investment or don't do more invest in stocks or does it based on Sharma Ji or Verma ji's reco; after reading news about recent crisis, they use to call us and ask if we are still alive & interested in stocks market? As if they want to remind those warnings given 5-6 years back in 2001-02, "I told you not to invest in stocks, see what happened now". It seems they forget the fact that stock market is gold mine and without risk one must not expect exceptional returns.
If your investment horizon is 5-10 years or in our case it is 30-40 years then do we really need to panic from today's crisis. Definitely not!!! My friend was talking something about "bottom fishing in the stock market", he might have got this term from these TV18 guys. He wanted to take advantage of this market fall by doing bottom fishing...hmm.
So, I thought let me see which stocks are at bottom and ready to get fished out by my friends & his community of people. I was just looking at the top 25 losers in this market crash and got the above list of stocks which has fallen 85-95%. Once upon a time these some of these stocks mentioned below were poster boy of indian stock market going up and up like crazy....
ASIAN ELECTR - Technology of making petrol from plastic waste flopped.
IOL NETCOM - Never believe in this company, promoters doesn't have good track record.
SOBHA DEVELOPERS - Story of construction companies are over.
RAJESH EXPORTS - Commodity play, depends on gold prices, Shubh-Laabh did not picked up.
INDIABULLS REAL EST - How much loan they have taken & will they really get estimated rent income, I don't think so.
DS KULKARNI - Another builder in high demand share price from 40 to 400 and now back to 40.
None of these stocks are worth investing inspite of falling 80-90%. One must not forget that when prices are low, all the stocks looks similar. Everything in this world has some price and most of the time price speaks about quality of stuff. But when all are tagged with same prices it becomes much more difficult to identify which is better and which is not?
So, don't go for "bottom fishing" you must should understand that "who is fishing whom", I mean
it is you who is buying next multibagger or it is the stock looking cheap is buying you & your money!!!
Believe in "10in3" stocks which are well researched and build a strong portfolio with these multibaggers!!!
Ask HBJ team, reason why not to buy these stocks again, in case if you are still holding any of these stocks?
-JK, Research Associate
HBJ Capital, India.