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Monday, May 26, 2008

Game of modesty...

Market down simply because global clues were bad. This is for traders. For view you must see the depth in cash markets. The volumes in cash markets clearly suggest that we are heading for never before rally in coming 3 months. This will take us to Sensex 24 K.

Coming back to overall market sentiments, the bears are clueless and continuing their short positions whereas almost across the board analysts have echoed that US market is heading for new high as the worst is over. Again Cni was way ahead of market in predicting this. Now the human psychology will play major role in market recovery and liquidity.

If U S market goes into overdrive, the fund managers will start multiplying their wealth and with increase in the size of wealth the major issue of liquidity gets resolved by default. Have you ever seen how money evaporates in a bear market though the key players individually do not own cash..? Similarly when Bull Market starts the credit in the size allows to over leverage as well as affords to have some cash on hand.

I have seen this situation n no of time. You can’t ignore one fact that the fund manager is also an individual like you and me.

Therefore be prepared for a straight rise in mid cap and small caps. The major sharp recovery in A gr will start only after 5400 which will deal with lot of concerns investors have about their A gr stock. Some concerns like how long Punj will take to see Rs 600 again …? Will IFCI ever see Rs 120 ….? Will IDBI be a darling again…?

These things will be dealt with after 5400 and then probably you may be able to see a rise of 40 to 60 % prices in just less than 30 days and this will be trigger based. Like when I read B Dyeing news in one of the print media that it is spinning off its realty biz into a separate co I had the last laugh. How many investors still know the intrinsic value of B Dyeing….? Why only funds are buying the report on this co and HNI shying from it…? The share price has jumped from Rs 590 to Rs 1000 in just 30 days and yet is under priced..? Every individual investor too has a need to educate himself in a company in which he is investing if the size is really material. If you are investing 500 to 1000 shares then you can still rely on somebody else’s judgment. But when it comes to size you need to know what you are doing…?

Sometimes it seems investors knowingly do not want to apply their mind. eg Gremach Infratech was brought to your notice on Friday when the stock was at Rs 143 and co had announced board meeting. We repeated even today. The most common sense is that there was a golden opportunity to make money and yet you are not trying to make it. Gremach had gone on record to convert its FCCB into equity at Rs 376 which is possible only if the share price has to cross Rs 376. Secondly the 183 DMA for Gremach is close Rs 250 whereas the cmp is Rs 150 which means the SEBI formulae price has to be Rs 250 or around and at cmp it is offering a decent return of over 67% which is stunning by any stretch of imagination.

Do you require extra ordinary skills to make money in stock market…? Proper application of mind can give you this kind of returns. When we spoke to few Institutions they realised and sensed the opportunity. I think there are lots of such classical cases happening in stock market.

Again in A gr R power will rise to Rs 600 very fast cum bonus. It is just Rs 16 away from its peak price which I think could hit tomorrow. This will exit to all those who had stuck in IPO and bought post bonus announcement. Usually I have seen ADAG gr stock rising on huge buying after the event is over. I expect R Power to quote again at Rs 400 ex bonus which is equivalent to Rs 600 cum bonus. Then the story unfolding will start and stock price will eventually cross Rs 1000.

You cut and paste. Those who have not seen value in this co will issue buy report in R Power at Rs 1000 with target price of Rs 2500.

I am sufficiently proud of my knowing something to be modest about my not knowing everything.

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