Cause of RECENT MARKET DOWNTREND.!!!

Hello everyone,

So its been a  BAD week for all the Investors holding LONG position. Many of the Investors have had a foot-back when they saw 2-3 days of bloodbath in Stock Markets. Everyone wants to know the reason, why sudden Fall in a BULL market?

The reasons as you know are obvious. 

Major being the Geopolitical Tensions globally. 

Other than that Earnings season of the companies. Most of the companies has suffered achieving the estimated Sales, reason being the Transition to GST. 

When this wasn't enough, SEBI barred 331 companies (out of which ban has been lifted from 8 companies) to be traded on giving them a tag of 'SHELL COMPANIES'. Yes, this is a great step indeed as many investors will be benefited from such steps as even at this age, they dont know where they are investing. But before taking this step, SEBI should have added few more filters. Sentiment turned more negative with this kind of move. There are some renowned companies which have been listed in this and its really unhealthy for any company's outlook to be considered as Shell company.

As I come from business oriented family, I know how the things were when GST was rolled out. He was more tensed regarding the GST thing and the focus shifted from Growing Business to GST. And these was applicable to all small or Big companies. For once, it was in the mind that lets clear all the backlog and then wait for further clarification on GST. Due to this, atleast 10% of the business was suffered negatively even in Large companies and much more when considered smaller companies. 

Now this wasn't enough and the IIP numbers are out, whcih definitely wont be looking good as again, the culprit: GST Rollout

"IIP Numbers verdict: Factory output fell to a four-year low and contracted by 0.1 per cent in June with poor performance of manufacturing and mining sectors.

This is the lowest growth since June 2013 when the Index of Industrial Production (IIP) contracted by one per cent.

In contrast, IIP grew by a healthy eight per cent in June 2016. For May, IIP growth has been revised upwards to 2.8 per cent.

Official data released on Friday showed that factory output grew by a mere two per cent in the first quarter of the fiscal as against 7.1 per cent growth last fiscal.

Ahead of the roll out of the Goods and Services Tax (GST) from July 1, manufacturing sector activity contracted by 0.4 per cent in June as against a 7.5 per cent growth last year."

So obviously, worst isn't over. Below is the screenshot of my Folio taken on Friday when most market struggled, it was holding on really great, much above my expectations; to tell the truth.

Similar way many portfolios were holding on strong. Thursday was a bad day I agree, but on Friday, the portfolio which was mildly in red zone in the morning managed to end into Green even in such 
laggard market. 

Reason: Solely the stocks which I have bought posted their earnings report and they were giving the strength to my total folio. This gives the confidence that yes, we do have many things left in the market which can be picked up. Sharing you the pic of my folio here to show its not always bad when markets crash. Its the stocks that you have chosen that matters. 

There are 3 types of Investors presently available in the market. 
Where do you stand in this market and what you should do is the next step? 

Go to https://shahstocks.blogspot.com/2017/08/types-of-investors-right-now.html

Market Correction..!!! An opportunity to BUY?

Everyone is optimistic about the Bull Run that we are seeing in Indian Markets, Sensex and Nifty.
So, the market managed to jump quite a bit in last 1 year just because of the hope that new MODI government brought. That was not the only case. The world economy even got better and the business outlook for India changed as well. As we know, there was a phase of Recession or 'Mandi' globally which affected even Indian markets due to slow decision making of the earlier government. So, is it really a BULL Run? Even if it is not, we finally are getting a great opportunity to buy the stocks that are really undervalued. after the new govt came, all the stocks surged and made the market little expensive and it was tough to find gem like stocks which was is my best hobby. When I started investing Big in market, it was before 3 years. I was so happy at that time because I could find the shares that were highly undervalued and I used to say, why cant this be bought at these levels? Some of the cases are Neo Corp. All I used to ask myself is why shouldn't I buy this? If I was unable to get any answer, I used to invest atleast some portion of my savings into it.

Then I kept buying shares that I felt were undervalued yet strong. Over 6-9 months year, my portfolio was not doing that great. There I could see that many people told me that I dont know how to choose the stocks. But then after 6 months, I saw one of my favorite stock Asian Granito shooted like rocket to make new HIGHs. I invested in Asian Granito at Rs 30.00. Everyone asked me what would be my target? I always used to say them that my target is not fixed. Reason? Because when I invested in Asian Granito at Rs 30.0, I felt that its true potential would be somewhere around Rs 150.00 but by the time the share reaches Rs 150.00 levels, the fundamentals will change further and then I will change my targets for even higher as the Industry P/E also changes with time. This is one stock I would buy even at levels of Rs 200.00 due to growth it has shown.

Similar was the case with IFB Industries. I knew its a pioneer company that has a great monopoly of washing machines all over the continent. I saw the company's strategy of capturing even the smaller markets. They also started with franchisee system and were very aggressive on it, because they had started IFB Points even in smaller cities (smaller cities because they opened in my city as well). One concept that I loved about IFB is their another marketing strategy of selling through website. They sold a whole appliances set to a new bride. Now, I know not everyone an afford it but surely many did. One of my friend got the same gift from his dad. I felt it was too undervalued at Rs 67.00. Also the monopoly could not be ignored. After some 6 months, it also surged and sky rocketed to levels I wanted. 

So, finally I realized let the people say their stuff. I have gave nice and enough inputs in my research before buying though I was always open for discussion. I invested in many other picks with strong Fundamentals. I also started looking into opportunities where there was risk involved but if that risk is overcomed, the stock would fly real High, increasing little of my exposure to risk.

Then the market went UP after election results and I was clueless as to what to BUY. I used to invest in most of the stocks that were undervalued. After the market surged, I couldn't get any stocks that were really undervalued. So, I invested in stocks which I picked earlier and were still undervalued.

Now I have got a chance to buy the stocks that are undervalued due to correction. So, if you have missed the rally and are looking to invest the stock market, start investing in tranches so that risk is diversified. 

Not a question whether its a BULL Run or not, we have stocks that are available cheap now after a long time.

Check my next post for the name of the stocks that are undervalued at the moment. Thank you for reading.

Happy Investing..!!!