How to become Bull among Bears ?

A presentation by Rajesh Soni

Investment Guru Blog – http://rajeshsoni.com

Current Scenario

The Bear has taken the Bull by its horns

Humpty Dumpty had a great fall

Sensex & Nifty down 28% since 8th January

The 10 largest falls of the Sensex

1. Jan 21, 2008 ---    - 1,408.35 points2. Mar 17, 2008 ---    - 951.03 points3. Mar 3, 2008 ----    - 900.844. Jan 22, 2008 ---    - 875.41 points5. Feb 11, 2008 ---    - 833.98 points6. May 18, 2006 ---    - 826.38 points7. Mar 13, 2008 ---    - 770.63 points8. Dec 17, 2007 ---    - 769.48 points9. Oct 17, 2007 ---    - 717.43 points10. Jan 18, 2007 ---    - 687.82 points

Reasons for Fall

Started with FII Sell off – Profit Booking Negative Global clues Domestic cues Ignored

Big Daddy is ILL

Sub prime Crisis Unemployment on rise Housing Sector –Slowdown US Economy in Recession phase Fed Rate cut fails to reimpose confidence

Sub-prime Crisis

Liquidity issue in Banking System (foreclosures)

Higher default rates on loans to high risk borrowers

Started with Housing sector – Bubble Bursts Housing prices have fallen drastically 1.3 million properties subject to foreclosure Subprimes losses estimated at $ 300 Billion !!!

Is US going through recession ?

Higher Inflation Slowdown in Industrial Production Negative Job Growth Housing Industry –Bubble bursts GDP Growth 0.8% in FY08 (estimates)

Trends in US Housing prices

Damage Control

FED’s Falling Interest Rates – Since 12 Months

The Indian Story Fear of Sub prime crisis in India Housing Bubble ? Taming Inflation Domestic Consumption Story GDP growth –Scenarios IIP- 8.7% growth

Markets are Imperfect Fear Factor – Current levels look expensive Near term sharp uptrend ruled out Global cues would continue to haunt Domestic cues ignored Wait for Better prices

Getting the Bull out of Bear Ignore companies with higher US exposure Identify fundamentally strong companies with focus

on domestic consumption Don’t get carried away by prices…look for value Avoid Banking sector at current levels Pharma & FMCG are good bets in current scenario Avoid futuristic companies Do staggered Buying Avoid speculative positions

Words of Wisdom

"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it." Warren Buffett

Words of Wisdom

“The individual investor should act consistently as an investor and not as a speculator. This means.....that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.” Ben Graham

Thank You !