i Develop Stocks Advisory

Worst getting factored Every day I start with only one punch line “ buy B gr stocks “ where FII are not present. The most respected community FII are the most damaging one when correction sets in. Though I regard FII with great investment philosophy I have a strong feeling that all HNI’s which have come on street only because they either followed FII or did some front running. Instead these HNI had carved a niche space for them by investing ideas of their choice without any FII backing they could have made tons of money and could not have been in such a dire state. Asian Oil which was recommended by us at Rs 104 just less than 3 weeks before is now quoting Rs 188 a smart rise of 80% in 3 weeks. So also RDB, Network, Stelco, SS Duncan, Minda and so on. Instead those who have invested in A gr shares which are more fluid and in over owned state would still find it struggling. Why did HLL rose faster than market when nothing has changed materially…? All stocks such as IDBI, IFCI, and Bombay Dyeing are in the same boat and with every bad news surfacing the ownership will become thinner and thinner. Once the selling pressure gets over these will become replica of Orchid, HLL, Ranbaxy and Hindustan Oil. This is the precise reason RIL, SBI, REL all are languishing. Get tired sell or switch to other promising stock these stocks will start moving. Today after a dull start market recovered smarty because traders went short after China collapsed by over 5% on inflation concerns. Short covering took markets up. Inflation has now become a global headache since the prices of commodities have gone through the roof and Asia was the largest exporter of commodity. Developed countries are now at receiving end on this front and therefore global investors will have no excuse to desert India only on inflation concerns. In fact, the fall in prices suggest that this week inflation will be close to 6.25% or below which should be a good trigger for market. In any case, my call is still in favour of buying small cap which is tomorrow’s mid cap and without which there is no life. There is another reason why I am saying this. When I spoke to lots of promoters to find out who are sellers I was surprised to hear the most trusted investors such as FII and domestic institutions were sellers in huge quantity even though they had bought the shares after meeting management and knowing the co very well. This has created fear for management that these investors could come forward for further selling and therefore they would not ask even operators to their activity. It is most of the times management and operators go hands in glow though on record nothing is written. In view o this fact also it is advisable not to increase the exposure in A gr till the time the dust is fully settled. This can be made out scrip wise though as a whole still long way to go. All the bad news are factored in and if the downside has to come it will come from very harsh bad news such as inflation at 7 or 7.5% or international bad news. Heard from sources that NSE is again expanding the list of F & O list to increase the ever dying volumes. With short sell allowed, stock borrowing mechanism in place and further expansion of F & O I think it is sooner than better to forget F & O forever and leave it for institutions. For small investors only B gr is the answer on the earth. There are people who, instead of listening to what is being said to them, are already listening to what they are going to say themselves.